Friday, October 19, 2012

What's Luongo Worth To The Toronto Maple Leafs?

Roberto Luongo is back to being the topic-du-jour among Leafs fans.  Sportsnet's John Shannon suggested that the foundations of a deal that would see Luongo become a Maple Leaf are already in place and that it's likely that once a CBA is agreed to by the League and the PA, the final details would be hammered out.

The Leafs Nation ran a piece suggesting that the Leafs should probably be comfortable giving up Bozak, Frattin, Gardiner, and a 1st for the star netminder.  Excuse me, what?

Pension Plan Puppets responded with a piece that suggested a more reasonable price would be Bozak, Franson, and a 2nd.

What I've spent the past little while wondering is whether the Leafs will need to give up anything at all.

Bob McKenzie tweeted the other day that the latest League proposal in the CBA negotiations included a provision under which a player with a contract greater than 5-years in length who retires prior to the end of his contract would see his cap hit continue to count against the cap of the team who signed him to that deal.  Now that's a game-changer.

Consensus seems to be that of the 10-years remaining on Luongo's deal, he's likely to play out 6 of them.  For Vancouver, this would mean that after having dealt Luongo for what's expected to be a reasonably modest return (and certainly nothing approaching Gardiner, a 1st, Bozak, and Frattin) they would face a cap hit of $5.33M for four years on a player who's half a decade removed from being a part of their roster.  Yikes.

Florida has already told Gillis "no" when he asked for Nick Bjugstad and I expect that Burke would do the same if he were to ask for Jake Gardiner.  Since those teams are the two primary suitors for Luongo's services, we can assume that the return will be something less than either of those two.  

Given the probable return and what looks like a fairly sharp wrist-slap levied by the NHL, I wonder if it might be in Vancouver's best interest to just buy Luongo out.

With the cap set to decrease and the players likely to maintain the integrity of their existing deals in some manner or another, it seems fairly likely to me that the league will implement some form of buyout amnesty where players currently under contract could be bought out without the team incurring any penalty against their cap.  This is Vancouver's chance to get out of the Roberto Luongo business permanently, without having to worry about the possible repercussions in 2018-19 and beyond.

Should the Canucks decide to pursue this route, Luongo becomes an Unrestricted Free Agent and we're asking ourselves what is Luongo worth in terms of dollars rather than in terms of assets.  With a 5-year term limit and Luongo admittedly being one of the best goalies in the NHL at the age of 33, the number of suitors for his services likely increases.

What Luongo would be paid on the open market with a reduced salary cap but a 5-year fixed term is anybody's guess at this stage.  It's probably safe to say that the cap hit would be greater than the $5.33 number that he's currently carrying but when you consider that you don't have to surrender any player-assets to acquire him, that number becomes a lot more palatable.

The factor that we aren't considering here is not hockey-related but is certainly relevant: Would Vancouver ownership be willing to eat the dollar cost to buyout Luongo for the good of the on-ice product in the medium-term?  It's anybody's guess at this point but it would be tough to fault ownership for not wanting to simply swallow tens of millions of dollars in the hopes of reaping rewards 6-years from now.

Suffice to say, when Leafs fans ask themselves what they would give up for Luongo, it might be more pertinent to start thinking in terms of dollars rather than players.


TML__fan said...

The Canucks would have to wait until next summer to buy out Luongo. Unless the lockout lasts a full season, Vancouver is unlikely to carry Luongo that long.

IF, they opted to wait and buy him out next summer, he still would carry a hefty cap hit for the years 2018-2022. Since the old CBA has expired, any new buyout would have to be subject to the rules of the new CBA. There will be no amnesty in his case.

Now, assuming Luongo retires in 2019 at age 40, his cap hit for the following 3 years (2019-2022) is basically the same as it is now (buyout or not). Check CapGeek if you doubt the math. The only way Vancouver avoids the large cap hit in those years is if he plays till he is 43 with another team. There is a small chance he does that in sunny Florida.

Assuming Vancouver wants to go with Schneider as their #1, the Canucks best option is to trade Luongo and get as much as they can in return. Unfortunately they will have to settle for less than market value since his contract is so long and there are only a couple of places he is willing to accept a trade.

Curt S said...

If the cap drops and player salaries remain constant, there will likely be a buyout period added prior to the start of the season (otherwise teams will be over the cap and in the new system, burying guys in the AHL isn't an option anymore).

An amnesty buyout, as I alluded to, is different than your typical buyout and doesn't carry with it any punitive measure vis-a-vis the cap.