How The Leafs Have Shifted Asset Allocation for 2013-14

As you may have heard ad nausem throughout the offseason, the Toronto Maple Leafs have made some interesting decisions with respect to salary cap management for the 2013-14 season. With many of their best value deals coming up for raises by way of the restricted free agency process, the Leafs now find themselves short on bargain deals that helped them find success without just out-spending other teams.

This summer, though, Dave Nonis hasn’t been tight with the purse strings – he bought out Mikhail Grabovski and Mike Komisarek, he opened up the cheque book for Tyler Bozak and David Clarkson, and he’s had RFAs receive more than the anticipated amount.

All of that adds up to leave the Leafs in a precarious cap situation, with just under $5M left to sign both Nazem Kadri and Cody Franson (spoiler: not happening). So, with a different cap situation and a few changes to the roster, I wanted to look at how the Leafs have shifted their allocation of assets.

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Before the changes are examined, it’s worth looking at how the Leafs maximized cap space last year. The graph below shows the amount of available minutes a player played versus the amount of cap space he took up. In an economic equilibrium (with proper player deployment from the coaching staff), these would line up in a clear pattern whereby salary is commensurate of minutes (and minutes would be indicative of overall performance). Given the realities of the league – namely, the bargains that are most entry level contracts – that’s not the case.

As you can see, the Leafs had a few outliers at a high cost without many minutes played (Komisarek being the most obvious and Joffrey Lupul standing out due to injuries). There are also some extreme bargains, players who played major roles at a low cost (Bozak, Franson and Mark Fraser). 

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What sticks out as interesting when comparing salary structure between this year and last year is that the Leafs are actually increasing spending on useful players despite the cap going down. The Leafs paid $7.87M in cap space to buyouts, retained salary and buried salary in 2012-13. At the start of this year, that number is "just" $2.5M. The Leafs were also about $6M under the cap last season. Basically, while the cap went down by about $6M, the Leafs still had about $5M more to spend on actual contributors. And they used it.  

The Leafs have essentially spent all of that additional money to upgrade their second line and second pairing. The salaries of their top centre, wing pair, defense pair and goalie has only risen from $27.3M to $28.1M, while the cost of their third and fourth lines, final pairing, back up goalie and reserves has dropped from $17.1M to $16.8M. It’s the second line and second pair where the jump is noticeable, as those five players have risen in cost from $11.5M to $17.3M. (And again, these line designations are based on salary alone, not the expected depth chart.)

Despite the Leafs paying the same in "salary" this year, their cap space and flexibility is much smaller thanks to the decline in the salary cap.

I should note that for the purposes of displaying a "full" roster, I have assigned Kadri and Franson a $2.5M value each, a number that is probably far too low but pushes the team to the cap. Obviously, if both are to be signed other moves are required, but this works for our purposes here.

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From the graph above, it’s clear the Leafs are spending more across the board. However, as mentioned, there is almost zero room for flexibility. The "depth" figure refers to salary paid beyond 12 forwards and seven defensemen. The Leafs are banking on either not needing much depth from the AHL or being able to find cheap depth – players only come off the cap if they are injured for a long period – as they have little wiggle room to add, say,  Morgan Reilly ($1.74M cap hit including deferred bonuses) in the event a defenseman is banged up.

I’ll throw one more graph up that tells us even less but is still interesting. The graph below is the same as the previous one, just broken down by specific role. This is based on salary, not actual deployment, so, for example, Jake Gardiner is not a D1 or D2 (instead, Phaneuf and John-Michael Liles are).

Particularly looking at the centres, it’s clear that Grabovski is gone and Bozak is a cheaper "first line center" (in name only) while the team is now paying more for a "second line center" (Dave Bolland), although Kadri’s eventual price tag will change how this looks. On defense, the Leafs are paying more across the board once you get past Phaneuf and Liles, as every defense spot has gotten a raise. Both goalie positions have also spiked.

Again, none of this is new. The cap crunch the Leafs face has been discussed plenty, and the discussion is far from over. The Leafs have several moves left to make, whether they be trades or signings of their RFAs or both. This will look different by the start of the season.

But the fact remains that all of the changes this offseason have brough have put the Leafs right up against the cap with no easy way out. This whole exercise also speaks to the value of having a steady pipeline of young, controllable talent to fill spots when players get too expensive, something the Leafs are lacking a bit this year compared to last.

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  • millzy09

    Not sure if it was implied, but Rielly’s cap hit with the big club will only be 925k. The rest will go to the bonus cushion where the Leafs have tons of room. Somewhat moot, I guess, since he will only get the usual tryout.

    What scares me most is that the Leafs have so many players becoming free agents after next season and needing raises (similar to this year). I hope they make some noise this season, because a year from now this team will be in shambles and there will be a lot of disappointed fans.

    Gardiner comes out of EL meaning his 825k cap hit is a thing of the past with no bonus option. He’ll demand good money. Franson, assuming he resigns on a 2 or 3 year is going to cost double what he did last year, Phaneuf will likely look for the same money. Kessel will likely get 1.5+ more. Then there is Reimer who has essentially been given his walking papers due to all this. Forget retaining him at this point.

  • Back in Black

    I think the Leafs are banking on a rising cap ceiling into the next off-season, which would explain some of their signings and willingness to put themselves between a rock and a hard place.

    But that’s incredibly risky as stated above about their pending UFAs for 2014.

  • Jeremy Ian

    Here’s another way to frame the challenge, Blake. Why not treat what you deem flexibility as “unused capacity?” Any manager who does not optimize his or her capacity, especially in a market (like ours) that is crying out for a competitive team, is not doing their job. What Nonis is doing is rational. We might query some of the tactics, esp about Grabbo’s contract. But the strategy of soaking up excess capacity under the cap is exactly the same one being pursued by successful managers around the league (Pittsburgh, Boston, Detroit….), with the main exception of Ottawa.

    There’s a much broader problem at work. If every manager pursues the same strategy, they collectively handicap each other because they drive up the price of the very assets they are managing — which is what (1) created the need for the cap in the first place and (2) leads to structurally-induced lockouts, which has become the addictive model of “market correction” in professional hockey.

    So, Blake, the cap will go up — it has to, because so many managers are pursuing the same strategy as Nonis. This will mean that the strategy works in the medium run. But predicts another lockout when the CBA expires.

    If Nonis were tofollow your preferential strategy, the Leafs would bathe in excess capacity, aka flexibility. But so what, if the rest of the teams in the league play by different rules? We’ll wind up with another wimpy team, loads of cash, and no way to forestall another market correction.

    If you are going to fault anything, it’s the way that managers solve their collective action problems.

    • millzy09

      Agreed. To my point above though, I think when spending to the cap, strong consideration should be given to the current standing and maturity of the team with a “what comes next” mentality. If you’re not looking beyond the season at hand and you aren’t a top 4 contender with a great shot at a cup, you could really be putting yourself in a hole.

      I see this happening right now with the Leafs. They are about a year early on hemorrhaging their money. This is noting that their top scorer, best defenceman, #2 defenceman and best young defenceman need more money next year (perhaps Phaneuf will stand pat). I think Clarkson will be great, but I worry that his indirect 5.25m cost is already a problem and will only look worse next offseason.

      Timing is everything.