Maybe it didn’t pay off in the back-up-the-Brinks-truck way it could have, but William Karlsson’s decision to bet on himself last season has him on the cusp of an eight-year pact that will keep him a Vegas Golden Knights for the foreseeable future.
Last summer, following a breakout 43-goal, 78-point campaign that no one – and we mean no one, not even Karlsson’s biggest supporters – could have seen coming, the Vegas pivot signed a one-year, $5.25-million deal that set the stage for him to renegotiate a new deal this summer. The gamble was fairly clear: if Karlsson had another monster year, he was set to command a payday that would have allowed him to execute a Scrooge McDuck swan dive into a pool full of cash. Unfortunately, another 40-goal output wasn’t in the cards for Karlsson, but what the 26-year-old managed was a 26-goal, 56-point season that saw him prove his worth as a legitimate top-six center, and one whose offense is an added bonus given his defensive responsibility. The result? A reported eight-year pact worth in the neighborhood of $5.9-million per season, according to The Athletic’s Jesse Granger.
That Golden Knights GM Kelly McCrimmon has managed to wrap up Karlsson to a deal that pays less than $6-million per season is significant given the eye-popping money that has been handed out in recent weeks, particularly to the likes of Jeff Skinner and Kevin Hayes. In this market, few would have bristled at the suggestion a 25-goal pivot with proven 30-goal, 70-point upside could have been paid upwards of $7-million per season, which is exactly the price range Hayes fell into despite being one year older and never having reached the same offensive heights as Karlsson. That said, Hayes’ unrestricted free agent status made his situation slightly different. Karlsson was an RFA with arbitration rights, though, and one-year from UFA status, he definitely had some bargaining power here.
What needs consideration, of course, is the role state tax played in Karlsson's cap hit. The Golden Knights benefit from the same perk which the Tampa Bay Lightning have utilized: no state or city tax that impacts a player’s bottom line. As Granger pointed out, CapFriendly’s post-tax earnings calculator estimates Karlsson’s take-home salary is in the $3.75-million range before agent fees and the like. That’s commensurate with what he would have taken home on a contract that carried a $7-million cap hit in roughly half of the league’s other cities, including every Canadian market, New York State and California. In that sense, Karlsson’s signing isn’t all that different from Hayes’ deal with the Flyers. In fact, despite the discrepancy betwee n the two cap hits, the newest Philadelphia pivot only comes out about $300,000 ahead.
Now that Karlsson is (unofficially) locked up, though, the Golden Knights' attention has to turn to what has quickly become one of the stickiest cap situations in the NHL. When salary cap projections had the salary cap set at $83 million, Vegas looked as though they were going to be in a pinch. That the cap has fallen $1.5 million short of those expectations means the Golden Knights are going to have to make some tough decisions in the weeks to come.
At present, Vegas is projected to have upwards of $83.1 million committed to next season’s salary cap, including $5.25-million for the final season of David Clarkson’s contract and $500,000 to Tomas Tatar as part of a retained salary transaction. What makes the Golden Knights’ situation difficult, though, is that it’s not as easy as paying up to make Clarkson’s contract disappear. In fact, even if Vegas were to do just that, sweetening the pot with picks or a prospect, Karlsson’s contract still puts the Golden Knights more than $2 million over the spending limit. This is to say nothing, either, of the consideration that needs to be given to re-signing Nikita Gusev, Tomas Nosek and backup goaltender Malcolm Subban, all of whom are RFAs with arbitration rights. If Vegas wants to keep all three, Clarkson’s deal almost certainly has to be moved along, but so does that of another player of significant value.
Most often speculated to be on the move is 26-year-old defenseman Colin Miller. Though he has significant offensive upside, he was fourth in average ice time among defensemen to play at least 60 games last season. At a $3.875-million cap hit for the next three seasons, he has a cost-controlled contract, too. That will be attractive to several teams. Even assuming Clarkson’s deal is shed, though, making Miller the second cap casualty doesn’t clear up the issue. Yes, it gets Vegas under the cap, but offers about a thimble’s worth of breathing room.
So, what’s the secondary move? Some have speculated Cody Eakin could get the axe. The 28-year-old has one year at $3.85 million remaining on his contract and played third-line minutes last season. Given the cap situation, Vegas would likely be amenable to a cheaper bottom-six option. Or maybe a goodbye with Ryan Reaves or Erik Haula is in the cards. The former carries a $2.775-million cap hit, the latter counting against the cap for $2.75 million. Moving Reaves, who averaged less than 11 minutes, might make more sense than shipping out a capable middle-six hand such as Haula, but who knows what the market will be for either.
One route the Golden Knights could also consider is finding a suitor for Max Pacioretty, who had modest success after his acquisition last summer, scoring 22 goals and 40 points in 66 games. His $7-million cap hit is set to become Vegas' second-highest despite a rate of per-game production that ranked seventh. He carries a modified no-trade clause, and maybe that limits Vegas’ options, but shedding one high-priced contract might be more worthwhile for the Golden Knights than ridding themselves of a few mid-range deals.
Regardless of the combination of players Vegas moves out, though, Karlsson’s impending deal makes cap clearing a necessity. It’s a price the Golden Knights are no doubt willing to pay to keep Karlsson around, too, but it’s going to make McCrimmon one GM worth watching over the next few weeks as Vegas looks to lock in their roster for next season.
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