August 16, 2024 by Ryan Lotsberg

The St. Louis Blues made the offers that they made to Dylan Hollway and Philip Broberg in part because they knew that the Oilers were in cap trouble. The numbers offered to Holloway and Broberg have put the Oilers in a difficult spot in regards to the salary cap.

Pour yourself a cup of coffee or a stiff glass of whiskey because you’re in for a long read involving lots of numbers here.

Prior to the offer sheets, the Oilers were $354,167 over the league’s $88 million salary cap. That number is based on an active roster of 21 players. The breakdown is below:

Nugent-Hopkins ($5.125M)	McDavid ($12.5M)	Hyman ($5.5M)
Skinner ($3M)	Draisaitl ($8.5M)	Arvidsson ($5.5M)
Kane ($5.125M)	Henrique ($3M)	Brown ($1M)
Janmark ($1.45M)	Ryan ($900k)	*Perry ($1.15M)

Ekholm ($6M)	Bouchard ($3.9M)
Nurse ($9.25M)	Ceci ($3.25M)
Kulak ($2.75M)	Brown ($1M)
	Stecher ($787,500)

Skinner ($2.6M)

Pickard ($1M)

All signs are pointing to Evander Kane at least starting the season on LTIR because it is expected that he will have surgery. Putting Kane on LTIR would bring this active roster down to twenty players.

The way that LTIR works is that the value of the injured player is added to the value of the team’s cap hit at the time when the player is placed on LTIR. The Oilers are over the cap. If Kane was to be placed on LTIR on opening day with the same roster the Oilers have now, Kane’s $5.125 million would be added to the $88 million salary cap, leaving the Oilers with a new upper limit of $93,125,000.

It’s actually to the Oilers’ advantage to have a roster that is over the $88 million cap when Kane is placed on LTIR because if the team is below $88 million on that day, then their new upper limit would be lower.

Related: Blues sign Broberg and Holloway to offer sheets

There’s a little known rule regarding performance bonuses when a team is operating in LTIR as the Oilers will be this season. The Oilers have two players that could see time on the NHL roster this season that have potential performance bonuses: Corey Perry and Matthew Savoie.

When a team places a player on LTIR, there are two “pools” created. One is for salary cap relief, which as noted above is dictated by the cap hit of the injured player minus the amount of cap space the team had before placing the player on LTIR.

The other “pool” is for performance bonuses. The values of the potential performance bonuses for players on the active roster at the time that the injured player is placed on LTIR are placed in a separate “pool”. 

If a team operating in LTIR has players on the roster whose performance bonuses cause the team to exceed the amount in the performance bonus “pool”, then the difference counts against the salary cap. In other words, the player’s performance bonus gets tacked onto his cap hit.

Perry can make up to $250,000 in performance bonuses, and Savoie can make up to $1 million in performance bonuses. Having them on the active roster when the Oilers put Kane on LTIR would result in a performance bonus “pool” of $1.25 million. That would allow Savoie to move up and down between the NHL and the AHL freely at his regular cap hit.

If Savoie was to not be on the active roster when Kane gets placed on LTIR, then his $1 million would not go into the performance bonus pool. His $1 million in potential performance bonuses would get tacked onto his $886,666 salary cap hit if he was to get called up at any point in that scenario, making his cap hit $1,886,666.

That’s my long winded way of saying that Perry and Savoie will be on the active roster for at least the first day of the regular season assuming that Kane gets placed on LTIR, so whatever decisions get made before then need to account for Perry and Savoie being on the roster. Savoie’s addition to the roster listed above would put the Oilers at $89,240,834, which is $1,240,834 over the salary cap.

Let’s imagine that Kane will spend the entire season on LTIR. That would give the Oilers $4,770,833 in usable cap space throughout the season after sending Savoie down to the minors on the second day of the season. They could basically do whatever they wanted with that cap space, including carrying a full 23-man active roster and adding at the trade deadline. They would be able to get under the $88 million salary cap if Kane was to be reactivated at any point throughout the season with no issues, assuming that no major additions are made throughout the season.

Remember that scenario is without Holloway or Broberg.

2024-25

Holloway

Adding Holloway’s $2,290,457 would bring the total cap spending to $90,644,624 with a 21-man active roster (excluding Savoie). That would put the Oilers $2,480,376 under the $93,125,000 upper limit after putting Kane on LTIR. Savoie would easily fit under the cap on day one of the regular season, so no problem there. Holloway fits without a problem.

Could they get back under the $88 million cap if Kane was to be activated during the season though? Waiving and burying Josh Brown’s $1 million would be a no brainer in that instance. That would leave $1,480,376 needing to be removed from a 20-man active roster. Twenty is the minimum that you need for a full NHL game night roster. They would have to trade money out to activate Kane in this scenario. They would need to make a trade to get a player to play a role for at least $1,480,376 less than a current player. Cody Ceci, Brett Kulak, Jeff Skinner, or Adam Henrique could theoretically be replaced by cheaper options in that scenario.

Broberg

Broberg’s new cap hit will be $4,580,917. If the Oilers were to keep Broberg and not Holloway, then the Oilers would be at $92,945,084 (excluding Savoie). That would be $179,916 under the $93,125,000 upper limit after placing Kane on LTIR with a 21-man active roster.

That 21-man active roster would only have eleven forwards on it. Savoie needs to be on the roster for the first day of the season, so I’ll find a way to get him on the roster here. Brown would have to be waived and buried to make room for Savoie. That transaction would save the Oilers $113,334 against the cap, leaving them with $293,250 in cap space with twelve forwards and seven defencemen on the roster.

If the Oilers would be unable to get under the $88 million salary cap to activate Kane without making a trade with Holloway on the roster, then they certainly wouldn’t be able to do so with Broberg on the roster. The question is how much money would the Oilers have to clear in order to activate Kane with Broberg on the roster?

Related: The Blues see something in Broberg

That 21-man roster would have a value of $92,831,750, which would leave them with $4,831,750 of cap space needing to be removed to activate Kane. Troy Stecher could be waived and buried because he would be the seventh defenceman on this roster, which would bring it down to $4,044,250 with a 20-man active roster. It would require a lot of roster reconstruction to activate Kane if the Oilers were to keep Broberg. The only way to do it in one move would be to trade a player making $4.82 million or more and replace that player with a player making the league minimum.

Both

The Oilers would be at $95,225,541 with both Holloway and Broberg on the roster, which is $7,225,541 over the cap. Let’s see if there’s a way to keep them both without trading someone away. Kane would obviously have to go on LTIR, which would leave them with a 22-man active roster. 

Remember that Perry and Savoie need to be on the roster for day one, so there needs to be a way to have Savoie on the roster here as well. I’ll use a roster where Derek Ryan is waived for Savoie here. That would leave the Oilers at $95,212,207, leaving the Oilers needing to remove $2,087,207.

Brown and Stecher would have to be waived and buried, which would leave the Oilers $299,707 over the $93,125,000 upper limit with Kane on LTIR. That would leave the team with a 20-man active roster. 

The only way to get under the $93,125,000 upper limit without making a trade in that scenario would be to waive and bury Perry and have a player with a cap hit of $775,000 on the roster. Perry needs to be on the active roster for day one because of his potential performance bonus, so this plan wouldn’t work. 

The Oilers would definitely have to trade someone away to keep both Holloway and Broberg. Activating Kane while keeping them both would essentially be impossible without blowing up the team. Regardless of the decisions that they make on Holloway and Broberg, the Oilers will be losing at least one player as a result of this situation.

2025-26

The Oilers have 2025-26 to think about here as well. The Oilers currently have $62,387,500 committed to 2025-26 already with an active roster of fourteen players. PuckPedia has that figure at $69,258,874 and sixteen players with Holloway and Broberg factored into the equation. The contracts of Ceci, Skinner, Perry, Ryan, and Connor Brown will have expired. The numbers committed for 2025-26 if Holloway and/or Broberg were to be kept now are below:

I know what you’re thinking. Yes, both Leon Draisaitl and Evan Bouchard will need new contracts next summer. The Oilers will also need to have a solution to replace Ceci in the top four in addition to rounding out the forward roster.

The good news is that the salary cap is expected to rise by a significant margin again for 2025-26. There’s a rule in the league’s CBA that dictates that the salary cap can only rise by a maximum of 5% in a given year; but the league and the NHLPA can agree to veto that rule and agree to a larger number if they deem it fit to do so. We saw that with the salary cap rising to $88 million for the 2024-25 season. The salary cap was at $83.5 million for the 2023-24 season. $83.5 million plus five percent is only $87,675,000.

Just to make this exercise easier, I’ll use the five percent rule to arrive at a number for the 2025-26 salary cap. $88 million plus five percent equals $92.4 million. However, the final number could be higher or lower than that.

Here are the amounts of cap space the Oilers would have in the four possible situations after deciding on the offer sheets with a theoretical $92.4 million salary cap for 2025-26:

The number that has been floating around online for Draisaitl’s contract is $13.5 million per year. I have no concrete information to suggest that will be the number at this time, but I’m going to run with it for this exercise. Bouchard’s negotiations aren’t going to happen until next summer, but given what he did last season and in the playoffs, it’s going to be a steal if the Oilers can get Bouchard signed for less than $10 million per year regardless of the term. Let’s run with those two numbers and subtract $23.5 million from the above numbers to see how much the Oilers would have left to round out the 2025-26 roster:

It would be great for the Oilers to be able to get Bouchard signed to a long-term deal not only to prevent a mega deal for Bouchard a few years from now, but to give the Oilers cost certainty well into Connor McDavid’s next contract. 

Related: What we know about the Oilers’ thoughts about the offer sheets

Keeping Broberg, whether Holloway is kept as well or not, would make that a challenge; but it would be possible to navigate. Moving Kulak would give the Oilers a little bit more flexibility, and that would be manageable on the ice if Broberg was around. Kane is a big X-factor here. He has to submit a list of sixteen teams that he would accept a trade to on March 1, 2025. Kane could be traded or bought out in the summer of 2025 to create more cap space. A buyout would cost the Oilers $1,333,333 against the cap in 2025-26 and 2026-27.

Wrap

Ultimately, there are ways around any potential cap problem the Oilers could face from keeping Holloway or Broberg. Those solutions become more and more difficult for the 2025-26 season if Broberg is around with or without Holloway. The Oilers would have to REALLY like Broberg to justify taking the gamble on him knowing the cap trouble that keeping him will cause.