You know when the “buckle up” light comes on in a plane? That’s what this post is. We’re about to hit some turbulence.

Folks, we’re 36 hours away from Free Agency, capital FA. I don’t have time to explain things as well as I should, so you’re getting pure, unadulterated Earl brain. Here’s what I know; when the 2020 MOU was signed, high escrow in the first two seasons incentivized players to take shorter term contracts. The flat cap doubled down on that, as teams didn’t have the cap space to sign players to long term extensions. Well, 2022-23 is the third season of the MOU. Escrow is (relatively) low, those short term contracts are coming due, and the cap has still barely budged, just $1m in 4 seasons.

Teams didn’t stop giving elite players raises. In the past 5 seasons, the average of the top 100 cap hits jumped from 9% to 10% of the upper limit. There is already more players making $7.5m+ than ever before, and there are still some big names on the market. Like, massive names. Gaudreau, Kadri, Giroux, Burakovsky, Malkin, and Klingberg could all join that group. Some of that can be attributed to Seattle joining the NHL, but there is no doubt more of the cap has been dedicated to elite players than ever before. That puts a squeeze on middle of the lineup players, an there is more of them hitting UFA than there has been at any point under this CBA.

On top of that, we have more players than ever before who would traditionally be RFA, becoming UFAs. The cap squeeze is pricing teams out of the Qualifying Offers for RFAs that signed 2 years ago. Since escrow was so high in the first two seasons of the MOU, RFAs were incentivized to take backloaded deals that guaranteed them more money when escrow hit 10%. Such was the case with Dylan Strome, Sonny Milano, Dominik Kubalik, Brendan Lemieux, all totaled 11 RFAs with a QO over $1m were not qualified. There was also more players reaching UFA through Group 6 UFA, where a player aged 25-26 plays too few NHL games and becomes UFA instead of RFA.

All things considered, this is an oversaturated UFA market, where there is not of available money to be spent. Teams have committed roughly $300m less than last season to players, I use that as a proxy for the money left to be spent. If you have the top 10 UFAs signing for an average of $8m, and the top 10 RFAs signing for an average of $7m, that is quickly cut in half. The 80 best remaining players on the market will have an average of $2m to sign for. This is using some approximations, but it is difficult to otherwise demonstrate how a market of this size is impacted by the dynamics of CBA/MOU changes.

Luckily for you, I have some charts. I’ve been updating these up to the minute, so you can have a good idea of how constrained teams are compared to past seasons as of the moment this goes out. I have mentioned three ways this year stands out; more free agents, less cap space, and more money spent on elite players. Another way is the amount of money tied up in dead cap space, before the first buyout window has even closed we have over 2.5% of the total available cap tied up in one form of dead space or another.

First chart represents more free agents. There is simply more expiring contracts, as I mentioned before. Since some players who would normally become RFA instead become UFA through G6 or not getting a QO, there are 3 red lines for UFAs, and 3 green lines for RFAs. It begins with more RFAs, then around 50 players become G6 UFA and there is a sort of equilibrium between the two. Then you factor in 100 or so players not given QOs, and we see the two diverge with far more UFAs. The forces I described earlier has driven the total number of UFAs dramatically up in the past two seasons:

Second is less cap space. I don’t have data for 36 hours prior to free agency in the past few seasons, but I do know the distribution of NHL contracts in $500k bins. Between the 21-22 and 22-23 lines, there is about $300m in free cap space, and 98 fewer contracts. As you can see, there has already been more money spent on $7.5m+ contracts. You can also see the 3 year trend of fewer players making $3.5m, and more in the $2-3m range. This is the suppression of 3rd line salaries as a result of the flat cap. Per Alexander MacLean’s work here, the projected contracts for the top 98 FAs (both restricted and unrestricted) combine for over $340m. There simply isn’t enough cap space for the value of the players on the market. Theoretically there may be, but not every team spends to the cap.

Third is the amount of money allocated to elite players, which I use the top 100 cap hits as a proxy for. The current lowest cap hit in that group is $6.25m, which would fall in the $6.5m bin above. That’s where there is a significant drop in the frequency of contracts, which lends to the idea that the top 100 cap hits is a fine descriptor for top players. This was ticking up before the flat cap kicked in, and there was no stopping it at that point:

Finally, dead cap space. I’m surprised there hasn’t already been more buyouts, and teams can still place a player on unconditional waivers at noon tomorrow in order to buy them out during the first window. Then another window opens up for teams that have arbitration cases, but it is not super common for buyouts to occur then. Some of the teams who struck out on trading their bad deals will begrudgingly surrender a portion of their precious cap space to the void in the form of a buyout tomorrow. Duncan Keith’s recapture took a big chunk out of Chicago’s cap space, then there’s the 14 teams with bonus overages, it adds up quick:

Just the buyouts, for reference:

That’s a lot of information, but it all points to one thing. There is less money available than the value of the players on the market. That means there are deals to be had, which hasn’t always been the case in Unrestricted Free Agency. Teams who are patient, and spend their money on the players who fall into that $2-3m range maximize their chances at finding players who can contribute more than their cap hit.

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