A Carolina Hurricanes blog with occasional news about the rest of the NHL.

Saturday, July 08, 2006

The arbitration issue in Buffalo

A few days ago, I wrote that Buffalo has 12 players filing for arbitration, that they have five regular players signed for next year, that Ryan Miller isn't one of them, and that these three factors would have me worried if my team were in this situation. I think my position wasn't stated clearly, so I'll get further into it.

The Sabres have roughly $12M in salary commitments to five players for next season. Nothing wrong with that. The salary cap has been raised to $44M for 2006-07, meaning they still have $32M to spend on 17 more players. At an average of $1.88M per player, this isn't impossible. Buffalo did a fantastic job of putting together a very good team while coming nowhere near the $39M cap in 2005-06. There is certainly no reason to believe that they won't be able to fill their roster under the cap. That isn't the issue.

The key issue here is the arbitration. The players have filed for arbitration because they weren't happy with the offers that were tendered to them. We have to assume that every one of them was offered a raise, and in some cases, a substantial one. I don't think there's any way all 12 guys actually have hearings, but the fact that they filed at all indicates that it won't be easy for Tom Golisano and Darcy Reiger.

Last summer, when there were oodles of free agents available, a grand total of 11 players filed for arbitration in the whole League. All but one of them was settled before the hearing. Dick Tarnstrom, of the Penguins was awarded a 45% raise, which was "well above" what the Penguins offered but less than what the player wanted. This is almost always the case.

When a player has an arbitration hearing, it's more likely that the team will be hurt than the player. The player can "win" the hearing by getting a little less than what he's asking for, but well above what the club is prepared to pay him. The player can "lose" the hearing, getting far less than what he wants. In such a case (we see this all the time in other sports), the player who loses arbitration is a very unhappy camper and might be a bear for the coaches and other players to deal with. When the arbitration is initiated by the player, the club can refuse the outcome of the hearing, and the player becomes an unrestricted free agent. The player cannot walk away from the hearing whether it is initiated by him or by the club. Last summer was the first time arbitration could be called by the club, and it was only used once. The Panthers took Roberto Luongo to arbitration, and they won, getting him for actually less than their initial offer. One year later, he signed a long term contract with Vancouver. In my opinion, the 'Nucks are paying him WAY too much ($6M), but that's just me.

Anyway, they can continue to negotiate until the scheduled hearings, which will begin on July 20. However, any successful avoidance of arbitration usually involves the player getting his way.

While most of the players wouldn't end up with huge salaries either way, it's still a lot to go through. And the prospect of not being able to maintain a core group from such a good team is scary.

  • July 20 Danny Briere (2006 salary - $1.93M) -- likely to get something like $2.75M
  • July 26 Toni Lydman (2006 salary - $1.9M) -- likely to get $2.5M
  • July 31 JP Dumont (2006 salary - $1.596M) -- likely to get $2.5M
  • August 3 Maxim Afenogenov (2006 salary - $1.086M) -- likely to get $2.75M
  • August 1 Tim Connolly (2006 salary - $1.036M) -- likely to get 0 $2.25M
  • July 25 Ales Kotalik (2006 salary - $837,900) -- likely to get $2M
  • Henrik Tallinder (2006 salary - $591,000) - likely to get $900,000 -- undisclosed "multi-year" contract
  • August 2Paul Gaustad (2006 salary - $501,600) - likely to get $900,000
  • Brian "Soupy" Campbell (2006 salary - $459,800) - likely to get $1.66M. Signed for 2 years ($1.25M / $1.75M)
  • August 4Adam Mair (2006 salary - $450,000) - likely to get $450,000
  • Andrew "Golfy" Peters (2006 salary - $450,000) - likely to get $450,000Signed for $460,000
  • July 28 Jason Pominville (2006 salary - $450,000) - likely to get $900,000

These are guesses, and I realize that some of them may be a bit high. If my guesses are right, this is $28.11M for 12 players, leaving them with $3.89M to sign an additional 5 players. Please note that Ryan Miller is not signed and is due a huge raise. He played for $501,600 last season, and should get at least $1M as the #1 goaltender. They will need to sign one more goaltender, and will probably have to let Biron ($2.128M) go. After signing Miller, another goaltender and a few depth guys, they won't have much wiggle room.

Frankly, I think some of these guys, if they go all the way to arbitration, might get even more. For example, Maxim Afenogenov, might point to a contract given to Carolina's Justin Williams as bargaining leverage. They put up similar numbers last season, and have almost identical career numbers. Viva just signed a deal which will keep him in Carolina for five years at $3.5M per year. Arbitration-settled contracts are only for one season, so they're not shooting for length, but $$.

One problem is that if the players actually go to arbitration, you've got a slew of guys who are under single-season contracts. Then you've gotta do it again next summer. If they "win", it might be that you have to let them walk. If they "lose", they might (MIGHT) become pouty and difficult. You hope that they all get settled in a fashion that suits both sides, but out of the 12, probably 4 have a chance to be ugly for the Sabres.

Whereas last summer, the free agent pool was very deep, it isn't so much this summer. If the players actually go to arbitration, and things don't work out for the Sabres, and they have to "walk away" from arbitration results, it could be dangerous.

To make matters even more complex, the qualifying offers tendered to RFAs Dmitri Kalinin, Ryan Miller, Taylor Pyatt, and Derek Roy will expire if the players aren't signed by July 15. At that point, they become UFAs, and anyone can take them without compensating the Sabres.

What it all boils down to is that the Sabres front office has a ton of work to do and not a whole lot of time to do it. This isn't a judgement about the Sabres. It's just a fact.


Chris said...

I think you're absolutely correct. The Sabres, along with several other teams, may be in serious trouble with player salaries. It all depends on how many actually make it to arbitration and what kind of home town discounts are available.

Amanda said...

I think everyone knows what difficulties having 12 guys in arbitration brings to a team. Quite frankly I'm getting tired of it being blogged about and written about all over the internet as if to say we're screwed. I think it's safe to say, as a Sabres fan myself, that we've shown our ability to overcome adversity in the past. It always seems to go unmentioned that Lindy Ruff was coach of the year to a team that no one thought would do ANYTHING. We made it to the Eastern Conference Finals with a team that has repeatedly been referred to as one witout any "standout", "big-name" players. I have a little more confidence in the organization than to think they are going to just sit back and let us go from a team that produced one of our best seasons in years to one that isn't going to produce anything at all because of money. If anyone thinks otherwise, then I'd be happy if they talked about it next season when we indeed "go to crap" because of this. We've never had a large bank to pull from, and were almost bankrupt not just a few years ago if anyone remembers. I think we can handle our money situation. Besides the fact that with whatever we do end up with, Lindy has taken unknowns and made them series clinchers. I agree... there are guys we need to hang on to, and I'm sure we'll find a way to do that. Sorry David, but from my last comment, I didn't need a ten page explanation of what salary arbitration means for our team. I would just like for everyone to realize that they aren't a part of the Sabres organization, have NO idea what's going on behind closed doors, and should move on.

Anonymous said...

first off, Lindy ruf shouldnt hae been coach of the year. Second, the fact that the Sabres were bankrput a few years ago shows that they CAN'T handle their money situation.

Meg said...

"Second, the fact that the Sabres were bankrput a few years ago shows that they CAN'T handle their money situation."

You clearly have no understanding of the events that led to the bankruptcy. The Sabres went bankrupt because their owners were criminals who drove their company (Adelphia) and themselves into bankruptcy. It hurt the franchise but was certainly not because of the franchise. Think of it as Buffalo's own mini-Enron. It had nothing to do with an inability to handle money on the part of Regier, et al. They have a different owner now and are in absolutely no danger of going bankrupt again.

Certainly they have other problems but that isn't one of them.

It's funny that, as doom-and-gloom as Sabres fans usually are during the off-season, the fans of other teams seem to think this is a much bigger disaster than we do (for the most part).

KevinP said...

D-Lee, Those four players won't become UFA's after their qualifiers expire. The Sabres would still hold their rights.

And the Sabres have their BIG one out of the way now. Andrew Peters signed!


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