COVID and the Upcoming Expansion Draft have the Buffalo Sabres Playing Chess

Source: Twitter/@buffalosabres

Taylor Hall shocked the hockey world by signing a one-year, $8 million contract with the Buffalo Sabres. This news came as a surprise to many, for both Sabres fans and the league.

Hall, the Hart Memorial Trophy winner for the player most valuable to his team in 2018, reunites with former head coach Ralph Krueger, who coached Hall in Edmonton in 2012-13.

Additionally, Hall’s signing comes weeks after a TSN report stated that the Sabres were considering an internal salary cap in the “low $70 million range.” The Sabres’ projected cap hit is currently $67,854,167, according to Capfriendly.com. The blue and gold have $13,645,833 left in cap space, with restricted free agents Sam Reinhart, Victor Olofsson, Lawrence Pilut, Casey Mittlestadt, and goaltender Linus Ullmark unsigned.

Salary caps in the NHL are tied to hockey-related revenue (“HHR”). Ticket sales, merchandising, sponsorships, and broadcasts are the main elements of HRR, which is then split 50-50 between the owners and players. To assure an equitable split, a percentage of players’ salaries are held in escrow — a financial account managed by a third-party. The NHL was expecting a salary cap increase due to increased revenues and the expiration of the United States television deal with NBC. Teams such as Toronto spent to the cap with inflexible deals under the assumption that revenues would increase.

Then COVID happened.

Instead of the salary cap increasing, it will remain at $81.5 million, as in 2019-2020. The NHL, and other professional sports, took massive financial hits due to the loss of ticket, concession, and parking revenue. In response to the anticipated financial shortfall, 20% of NHL players’ salaries will be held in escrow. Additionally, 10% of a player’s salary and signing bonus is deferred. Players will receive their deferred salaries on October 15 during the 2022-23, 2023-24, and 2024-25 seasons in equal payments.

Taylor Hall’s compensation decreased from his agreed-upon $8 million to $6.4 million from escrow deductions, with $640,000 deferred, highlighted by The Athletic Canada Editor-in-chief James Mirtle.

Additionally, the Sabres and Hall may circumvent the 2021 NHL Expansion Draft. The NHL will have its second expansion draft in four seasons, as the Seattle Kraken joins NHL play during the 2021-22 season. Seattle will select players from 30 of 31 NHL teams — with the Vegas Golden Knights exempt. However, teams can protect some of their best players from draft eligibility. Teams can either protect seven forwards, three defensemen, and one goalie; or eight skaters (forwards and defensemen combined), and one goalie.

Taylor Hall will become an unrestricted free agent after the 2020-21 season. The Sabres have a choice — they can protect him or leave him eligible for the draft. Protecting Taylor Hall will allow the Sabres to keep its exclusive negotiating rights until free agency begins. Leaving Hall unprotected will allow the Kraken to negotiate with Hall before free agency officially opens, a caveat given to expansion teams.

Both the Sabres and Hall have expressed willingness to extend their partnership beyond this one-year contract. The Sabres could leave Hall unprotected, which allows them more flexibility in protecting players.

Buffalo Sabres Expansion Draft eligible players. Source: Capfriendly.com

As seen above, Jack Eichel, Sam Reinhart, and Rasmus Dahlin are draft eligible for the upcoming expansion draft. Additionally, Jeff Skinner has a no-movement clause (“NMC”), forcing the Sabres to protect him unless he waives his NMC right. Additionally, Rasmus Dahlin is in the last year of his entry-level contract and is due for a significant pay raise from his current $925,000. Leaving Hall unprotected would allow the Sabres to keep its young core protected and leave high-priced players unprotected to clear out cap space. Currently, the Sabres have $39,783,333 in cap space for the 2021-22 season, more than enough to extend Hall and Dahlin to long-term contracts.

This would not be the first time the Sabres have used this tactic. The Sabres traded for Matt Moulson in 2013-14, only to trade him to Minnesota at that season’s trade deadline for two second-round picks and a player. Moulson reunited with the Sabres during free agency, signing a five-year, $25 million contract. The savvy move by then Sabres GM Tim Murray allowed the Sabres to keep the player and gain other assets that would help the team. The Sabres could, in theory, move on from Hall by leaving him unprotected for the expansion draft and re-sign him in free agency.

While this idea seems outlandish, it should be noted that NHL GMs were embarrassed after the last Expansion Draft. The Columbus Blue Jackets traded their 2017 first-round pick and 2019 second-round pick contingent on the Golden Knights taking William Karlsson in the 2017 Expansion Draft. The Blue Jackets made this deal to keep Josh Anderson and Joonas Korpisalo. William Karlsson went on to score 43 goals that season, third-most in the NHL, while Josh Anderson is no longer a member of the Columbus Blue Jackets. With similar moves like the Karlsson trade, the Golden Knights played in the Stanley Cup Final months after their expansion draft, won two division championships, and have made the playoffs every season since joining the NHL in the 2017-18 season.

As the saying goes, “fool me once, shame on you. Fool me twice, shame on me.” There is no doubt that teams will act differently during this upcoming expansion draft — look no further than the Buffalo Sabres’s contract with Taylor Hall.

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'21 J.D. Candidate at the University at Buffalo School of Law.​

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