Burying $$ in Rochester

[LastPommerFan]

So one big tool that the Sabres used this year was making cap room (Morriissoonn) and making trades more enticing (Kotalik) by burying contracts of the roster (AHL/Europe).

 

Was this a one-time deal, or something the Sabres will/should continue to employ?

 

Who might get the call? Remember, they'll have to pass waivers, and some might be more valuable in a trade.

 

Do you expect the players/owners to address this process in the next CBA? how?

 

I think the Sabres will continue to do this if they can, and it will be used by taking bad contracts off the hands of teams we're trying to trade with. I do expect some method for contracts to be released in the next CBA, though it will have to balance guaranteed money and the integrity of the roster cap.

[Eleven]

I like your mutual release idea. If someone wants to take $2.5M to play in the AHL, rather than $800K to play on the roster of another NHL team that wants him, he is entitled to the benefits of his original deal. If he chooses to let the team out of the obligation because he sees a brighter future somewhere else, he can do that, too.

 

If the team wants to keep someone expensive down in the AHL for whatever reason, it can, because the release would have to be mutual.

[Weave]

I don't expect that the practice of taking on bad contracts to make a deal is going to be typical going forward. I think it was done to jumpstart the process of making this Peg's team. I suspect that future deals will be more about doing things contract-wise that other teams cannot afford to do, rather than burying players in the minors/Europe.

 

And I also expect that the practice of burying salaries elsewhere will be addressed in the next CBA.

[Taro T]

I don't expect that the practice of taking on bad contracts to make a deal is going to be typical going forward. I think it was done to jumpstart the process of making this Peg's team. I suspect that future deals will be more about doing things contract-wise that other teams cannot afford to do, rather than burying players in the minors/Europe.

 

And I also expect that the practice of burying salaries elsewhere will be addressed in the next CBA.

Right after what the player %age ends up, that will be the big issue. How to keep the integrity of the hard salary cap (boy, I will NOT be pleased if the Burkes of the league get their way and the cap becomes an NBA style cap) in place while not forcing a player that has the skill to play in the NHL (obviously, by light of the fact the guy had been playing there and was given a large amount of money to play there) and an agent that can land him top $, but not enough skill to live up to his contract's expectations to be the too big fish in the small pond.

[LastPommerFan]

Right after what the player %age ends up, that will be the big issue. How to keep the integrity of the hard salary cap (boy, I will NOT be pleased if the Burkes of the league get their way and the cap becomes an NBA style cap) in place while not forcing a player that has the skill to play in the NHL (obviously, by light of the fact the guy had been playing there and was given a large amount of money to play there) and an agent that can land him top $, but not enough skill to live up to his contract's expectations to be the too big fish in the small pond.

 

I would be stoked if there was a soft cap. Pegula $ could go a long way to really make this hockey heaven if that were the case.

[Trettioåtta]

I like the cap, it keeps things interesting and poorer teams have shown that with it they can still be competitive (Nashville being a good example). However, i would be surprised if TP keeps burying money unless it is necessary. If you bury too many players no-one will sign here, as they would rather earn 500 less and play in the NHL. Therefore, i think it would be moronic to bury anyones contract. Darcy has the ability for a get out of jail card for a bad signing, but it can't be used every year.

 

Leino and Stafford are not bad signings YET, likewise, despite his poor year, Roy's contract is still a good one.

 

I voted for the mutual release thing, but i am not sure if it should be allowed, as otherwise almost every bad contract will be mutually released, with management saying they will bury the player unless they agree. Maybe a system of one mutual release/buy out that does not count against the cap per year or every years or somethng?

[RazielSabre]

Excellent thread. I've always liked the idea of a mutual release of contracts (I'm sure Drury, Luongo, Redden to name a few over the last few years) and I think this was a one time only deal for Pegula, he won't bury any more serious money in the Minors/Europe, if he does I would think it would push Regier much closer towards being sacked.

[shrader]

I don't expect that the practice of taking on bad contracts to make a deal is going to be typical going forward. I think it was done to jumpstart the process of making this Peg's team. I suspect that future deals will be more about doing things contract-wise that other teams cannot afford to do, rather than burying players in the minors/Europe.

 

And I also expect that the practice of burying salaries elsewhere will be addressed in the next CBA.

 

There are already some limits in place, like the maxium number of contracts and how x number of vets are allowed on an AHL roster. So it's not as if the Sabres can just take on bad contract after bad contract in return for a high draft pick. They'll hit a wall at some point if they want to go that route.

 

Quite honestly, I expect very little to change in the next CBA. There will be some minor cosmetic changes, but it will have little effect on the conversations we have here.

[LastPommerFan]

There are already some limits in place, like the maxium number of contracts and how x number of vets are allowed on an AHL roster. So it's not as if the Sabres can just take on bad contract after bad contract in return for a high draft pick. They'll hit a wall at some point if they want to go that route.

 

Quite honestly, I expect very little to change in the next CBA. There will be some minor cosmetic changes, but it will have little effect on the conversations we have here.

 

Good Point, If they're going to discuss the single biggest piece of the CBA (Player % of revenue), it's unlikely that many ancillary items will be taken up. And the will be discussing Player %.

[Taro T]

I would be stoked if there was a soft cap. Pegula $ could go a long way to really make this hockey heaven if that were the case.

TP has enough money to give the Sabres the best scouting, equipment, facilities, and the rest over ANY other team.

 

If that doesn't end up good enough to figure out who should be in the hockey department (on both ends), then something is seriously wrong.

 

I don't want to see the NHL go back to the days of having true haves and have nots, I like that there is a reasonably level playing field and would prefer to see them get to an even more level playing field. I like that the NFL has all teams on equal footing although the Jones and Snyders are trying to kill the golden goose. I don't like the NY Yankees and I don't want to cheer for the NHL version of them. If my favorite team has the best and brightest figuring it out, they should be able to parlay that into success at a rate better than those around them. While I really want to see the home team carry that big silver chalice around in the Mmarena, I want even more so to believe they earned it and didn't just buy it. I want them to win it every year, but I'm not sure I want them to buy it any year. To me, it just isn't the same.

 

Sorry for getting on the soapbox, the post vents more than intended and the rant is not directed at you. I just see how much the league had to give up (an entire season) to set up a system where all the teams can thrive, and I saw the team I cheered for being a have not for far too long, for me to be onboard with going backwards (even a little) towards that broken system. Even though right now, going backwards theoritically should benefit that team.

[LastPommerFan]

TP has enough money to give the Sabres the best scouting, equipment, facilities, and the rest over ANY other team.

 

If that doesn't end up good enough to figure out who should be in the hockey department (on both ends), then something is seriously wrong.

 

I don't want to see the NHL go back to the days of having true haves and have nots, I like that there is a reasonably level playing field and would prefer to see them get to an even more level playing field. I like that the NFL has all teams on equal footing although the Jones and Snyders are trying to kill the golden goose. I don't like the NY Yankees and I don't want to cheer for the NHL version of them. If my favorite team has the best and brightest figuring it out, they should be able to parlay that into success at a rate better than those around them. While I really want to see the home team carry that big silver chalice around in the Mmarena, I want even more so to believe they earned it and didn't just buy it. I want them to win it every year, but I'm not sure I want them to buy it any year. To me, it just isn't the same.

 

Sorry for getting on the soapbox, the post vents more than intended and the rant is not directed at you. I just see how much the league had to give up (an entire season) to set up a system where all the teams can thrive, and I saw the team I cheered for being a have not for far too long, for me to be onboard with going backwards (even a little) towards that broken system. Even though right now, going backwards theoritically should benefit that team.

 

I'd be ok with a purchased cup or five

 

The lockout had nothing to do with parity and everything to do with the % of revenues the owners got to keep. If they got the roll-back and nothing else, I believe they would have still signed the CBA. The Owners wrote contracts to players that they could not afford, and needed a way out. The Cap was that way out. What parity the NFL has is because of profit sharing, not the cap. The NHL could use more profit sharing. The % difference between the top and bottom payrolls in the NFL is larger than the NHL. They actually have less payroll parity than hockey.

[Taro T]

I'd be ok with a purchased cup or five

 

The lockout had nothing to do with parity and everything to do with the % of revenues the owners got to keep. If they got the roll-back and nothing else, I believe they would have still signed the CBA. The Owners wrote contracts to players that they could not afford, and needed a way out. The Cap was that way out. What parity the NFL has is because of profit sharing, not the cap. The NHL could use more profit sharing. The % difference between the top and bottom payrolls in the NFL is larger than the NHL. They actually have less payroll parity than hockey.

Absolutely not true. Goodenow offered the rollback early on, expecting exactly what you stated. It didn't happen because the owners knew that without the cap, salaries would be right back to where they'd just been w/in 3 years and then the rocketship would just keep going up.

 

This is a very interesting discussion, unfortunately I must run.

[inkman]

If Pegula is going to stand by his word, then burying contracts should be a viable option.

 

Morrisson and Kotalik both come off the books this year. I wouldn't expect Leino to get buried anytime soon but 2013-2014 should be a possibility if his production doesn't increase. Why would Roy, Vanek or Sekera even get consideration at this point? These guys will never play minor league hockey again, no matter the pay.

[spndnchz]

Good Point, If they're going to discuss the single biggest piece of the CBA (Player % of revenue), it's unlikely that many ancillary items will be taken up. And the will be discussing Player %.

 

As well as enhanced revenue sharing (the sharing between teams). NYI get screwed on this and want it changed.

[Trettioåtta]

If Pegula is going to stand by his word, then burying contracts should be a viable option.

 

Morrisson and Kotalik both come off the books this year. I wouldn't expect Leino to get buried anytime soon but 2013-2014 should be a possibility if his production doesn't increase. Why would Roy, Vanek or Sekera even get consideration at this point? These guys will never play minor league hockey again, no matter the pay.

 

I don't think so, he is already committing $70 million to the team, who knows how much to the building/front office. If it comes to having to bury contracts, he might do it begrudgingly, but if he does, that GM loses their job

[LastPommerFan]

If Pegula is going to stand by his word, then burying contracts should be a viable option.

 

Morrisson and Kotalik both come off the books this year. I wouldn't expect Leino to get buried anytime soon but 2013-2014 should be a possibility if his production doesn't increase. Why would Roy, Vanek or Sekera even get consideration at this point? These guys will never play minor league hockey again, no matter the pay.

 

I think Leino is the only current roster player with any potential to get the thruway treatment. He has proven nothing, and has a big contract. The three you mentioned could all be traded for something of at least some small value (3rd-4th rnd picks at worst) And I agree with the first statement. Imagine Darcy came and said, "I have a trade for Getzlaf and I can sign Parise, but we're gonna have to take on a bad $3M contract and bury that and Leino in Rochester to make the cap." Pegula would go to the John, grab nine of the million-dollar-bills he uses as toilet paper and hand them to Regier with a high-five.

[Trettioåtta]

I think Leino is the only current roster player with any potential to get the thruway treatment. He has proven nothing, and has a big contract. The three you mentioned could all be traded for something of at least some small value (3rd-4th rnd picks at worst) And I agree with the first statement. Imagine Darcy came and said, "I have a trade for Getzlaf and I can sign Parise, but we're gonna have to take on a bad $3M contract and bury that and Leino in Rochester to make the cap." Pegula would go to the John, grab nine of the million-dollar-bills he uses as toilet paper and hand them to Regier with a high-five.

 

Slightly different scenario there, i think he will bury contracts if it makes the team a hell of a lot better, i doubt he would bury money just to free cap space up for FA (unless we thought we could get a star). Not to mention, i stand by my point that if you bury too much, players won't want to sign here. Which, whilst it might not effect the top end FA star players, as they won't get buried, it will make a difference when you are trying to build a team overall

[spndnchz]

I think Leino is the only current roster player with any potential to get the thruway treatment. He has proven nothing, and has a big contract. The three you mentioned could all be traded for something of at least some small value (3rd-4th rnd picks at worst) And I agree with the first statement. Imagine Darcy came and said, "I have a trade for Getzlaf and I can sign Parise, but we're gonna have to take on a bad $3M contract and bury that and Leino in Rochester to make the cap." Pegula would go to the John, grab nine of the million-dollar-bills he uses as toilet paper and hand them to Regier with a high-five.

 

We so need a gif for this!

[Weave]

I seem to recall reading/hearing somewhere that Pegs has spent about 10% of his net worth on the Sabres so far. I know he made bold statements about drilling a gas well and all that but I cannot imagine him letting the team trickle his wealth away. I expect that he'll be smarter going forward about making sure his investment doesn't bleed him dry. I think there has to be non-cap related financial considerations in place in the future. He is too good a businessman to keep millions buried in the minor leagues and not say "no" at some point. As taro alluded to (in a different context) team mgt will need to prove they can win without financial trickery.

[LastPommerFan]

I seem to recall reading/hearing somewhere that Pegs has spent about 10% of his net worth on the Sabres so far. I know he made bold statements about drilling a gas well and all that but I cannot imagine him letting the team trickle his wealth away. I expect that he'll be smarter going forward about making sure his investment doesn't bleed him dry. I think there has to be non-cap related financial considerations in place in the future. He is too good a businessman to keep millions buried in the minor leagues and not say "no" at some point. As taro alluded to (in a different context) team mgt will need to prove they can win without financial trickery.

 

Source? He spent $189M on the team, but that counts as an asset, so even with a lowball evaluation he may have lost $40M on it. Assuming the team made no revenue this year, he's spent about $80M on salaries. Total renovations and other "fan expirience" spending might be another $40M. That's $160M on $3.2B (from Forbes), so like 5%. Of course the team is worth more than $150M, the fan expirience and renovations probably closer to $20M and they probably had about $60M in revenue this year, so his net loss so far is probably closer to $60M (2%) or about 4 months interest on his net worth assuming reasonable returns around 6%.

[Weave]

Source? He spent $189M on the team, but that counts as an asset, so even with a lowball evaluation he may have lost $40M on it. Assuming the team made no revenue this year, he's spent about $80M on salaries. Total renovations and other "fan expirience" spending might be another $40M. That's $160M on $3.2B (from Forbes), so like 5%. Of course the team is worth more than $150M, the fan expirience and renovations probably closer to $20M and they probably had about $60M in revenue this year, so his net loss so far is probably closer to $60M (2%) or about 4 months interest on his net worth assuming reasonable returns around 6%.

 

I don't recall the source. I took it to be simply "Pegs spent 10% of his net worth on the Sabres so far". It may be unreliable so take it for what it's worth.

[TrueBlueGED]

Source? He spent $189M on the team, but that counts as an asset, so even with a lowball evaluation he may have lost $40M on it. Assuming the team made no revenue this year, he's spent about $80M on salaries. Total renovations and other "fan expirience" spending might be another $40M. That's $160M on $3.2B (from Forbes), so like 5%. Of course the team is worth more than $150M, the fan expirience and renovations probably closer to $20M and they probably had about $60M in revenue this year, so his net loss so far is probably closer to $60M (2%) or about 4 months interest on his net worth assuming reasonable returns around 6%.

 

The source, I believe, was my napkin math :flirt: . I wasn't referring to it in balance sheet terms, it was simply a cursory calculation of how much cash he spent (or agreed to spend in the form of new guaranteed contracts) as a percentage of his overall wealth. Presumably, yes, he could recover the vast majority of his expenditures if he decided to sell. I was simply trying to make the point that even though he's not going to be happy with an under-performing product he spent 10% of his net worth on, and changes are likely in the long-run if the problems continue simply due to the size of the initial investment.

 

Edit: Put another way, I don't view his purchase of the team as a traditional business investment, because he has no intent (that we know of anyway) to maximize the value and sell at a profit or to minimize his losses by selling if things go south on the ice. I believe he bought the team because he wants to win, and the size of the purchase (and subsequent expenses) relative to his total net worth is simply a monetized proxy of how much he cares--a lot. Given this, he's not going to accept perpetual mediocrity. He'll happily spend a bunch of money to win, but I don't think he'll happily spend a bunch of money to lose.

[Weave]

The source, I believe, was my napkin math :flirt: . I wasn't referring to it in balance sheet terms, it was simply a cursory calculation of how much cash he spent (or agreed to spend in the form of new guaranteed contracts) as a percentage of his overall wealth. Presumably, yes, he could recover the vast majority of his expenditures if he decided to sell. I was simply trying to make the point that even though he's not going to be happy with an under-performing product he spent 10% of his net worth on, and changes are likely in the long-run if the problems continue simply due to the size of the initial investment.

 

And here I thought it was a credible source. :P

[spndnchz]

Don't think he's too worried right now. He just up'd his donation to Penn State by 14 mill.

[TrueBlueGED]

And here I thought it was a credible source. :P

 

That was your mistake, you assumed a credible source when what you really had was an incredible source :angel: