

Image via wikimedia commons.

In the immortal, tasteful words of the popular early oughts band Staind: "Its been a while."

Distracted by Vancouver’s seven week coaching search and a variety of American Hockey League gymnastics of late, we haven’t spilled any digital ink on the topic of trading Roberto Luongo in what seems like forever. What’s clear is that the best goaltender in franchise history, one way or another, won’t be in training camp next fall. What’s less clear is precisely how the gold medalist and former Hart Trophy nominee will punch his ticket out of Vancouver.

Let’s handicap the possibilities after the jump.

Compliance Buyout

At 8PM pacific standard time on Wednesday evening the leagues "first buyout window" (and the only one applicable for buyouts of the compliance variety) will open. It will close just over a week later, at 2 PM pacific standard time on July 4th. So July 4th is Roberto Luongo’s last possible independence day, if his independence is to come by way of a "compliance buyout."

There have been reports, albeit reports that have been repudiated, that ownership is reluctant to go the buyout route with Keith Ballard’s contract (buyout value: 5.6 million dollars over four league years). Let’s just say that buying out Roberto Luongo’s problem deal is a significantly meatier proposition (a touch over 27 million dollars over seventeen years).

A week ago on the Team 1040’s Canucks Lunch program, reliable reporter and ESPN and TSN analyst Piere Lebrun addressed this possibility directly. Here’s Lebrun’s take (transcription my own):

"I spoke to a GM today who said he has a lot of interest in Roberto Luogno. What he wants is for the Canucks to buy him out to he can just sign him… This gives you the pulse – this is a team that really wants Roberto, but they just figure, "hey, y’know, we don’t want that contract, hopefully Vancouver buys him out." So we’ll see I don’t think the Canucks plan on doing that right now, I think they want to trade him instead."

Obviously the Canucks would rather trade Roberto Luongo than spend twenty-seven million dollars getting out from under a contract that, while onerous, is attached to a player that teams around the league would immediately trip over themselves rushing to call…

Unlike Ilya Bryzgalov, who will be bought out by the Philadelphia Flyers this week to the tune of 23 million over fourteen years, Roberto Luongo is admired by his teammates and the numbers suggest he’s still a super elite National Hockey League ‘keeper.

Still, as the Globe and Mail’s David Shoalts explained this week, "the Bryzgalov buyout just made it harder for Gillis to avoid his own compliance buyout on Luongo instead of finally dumping his contract in a trade." This is in part because the Flyers just made another quality veteran goaltender an unrestricted free-agent (further expanding the goaltender market), and also because the very fact of the buyout of Bryzgalov’s somewhat similar deal increased the percieved likelihood of the Canucks buying out Luongo.

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Ultimately, I think the prospect of the Canucks excercising a compliance buyout on the Roberto Luongo contract is remote. As we’ll see as we proceed further down this rabbit hole, there are other cheaper options availble to the Canucks.

Classic Trade

Of the teams who fell within the bottom-10 in the NHL in terms of even-strength save percentage a season ago, there are only a few teams that I’d qualify as "fits" for a Roberto Luongo trade. For some teams it’s about personnel, like how Carolina and Winnipeg, for example, are busy overpaying Ondrej Pavelec and Cam Ward respectively. For other clubs it’s all about the Benjamins, like how the Blues and Avalanche are owned by Tom Stillman and the Kroenke’s respectively, while the New Jersey Devils have Johan Hedberg and Marty Brodeur under contract for next season, and anyway are in a state of financial rigamortis. Calgary is rebuiliding and Tampa Bay has been a motivated buyer on the goaltending market for the past year, and haven’t seriously kicked the tires on Luongo.

So that leaves three oft-rumoured and realistic Luongo destinations for a trade, as I see it: the Florida Panthers, the Philadelphia Flyers, and the New York Islanders.

Flyers General Manager Paul Holmgren was asked directly about the prospect of acquiring Luongo to replace Ilya Bryzgalov earlier this week, and he responded with "I don’t see how that would work." Of course this is the same Paul Holmgren who told Bryzgalov’s agent (our old friend Ritch Winter) that he had no plans to buyout Bryzgalov according to Rich Winter at least. He’s also the same Paul Holmgren who has told the likes of James Van Riemsdyk, Jeff Carter and Mike Richards that they were part of his long-term core in contract negotiations, only to subsequently and promptly deal each player. So yeah Philly remains, as ever, a complete wild card.

TSN’s Darren Dreger elaborated on why Philly isn’t a realistic Luongo destination on TSN Radio 1050 in Toronto earlier this week:

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"Roberto Luongo isn’t a fit because you just can’t get that done, you just can’t make it work, Vancouver isn’t going to take enough money back to make that package work."

Dreger mentioned Evgeni Nabokov and Ray Emery as possibilities for the Flyers, and the Emery fit was further fleshed out by Elliotte Friedman this week.

On the other hand, in the radio interview we linked to above, Dreger dropped a quote about Paul Holmgren’s job security in the wake of the Bryzgalov buyout, pointing out that Flyers ownership pushed for Holmgren to spend big and stabilize the teams situation between the pipes. "(As a General Manager), do you survive that signing and ultimate buyout if your owner isn’t pushing the buttons?" Dreger asked. (Why does that quote seem somehow applicable to Mike Gillis’s situation in Vancouver?).

Here’s what I can’t quite figure out about the Flyers. If Ed Snider and Flyers ownership were so desperate to stabilize Philadelphia’s goaltending and so deeply involved in Holmgren’s scorched earth pursuit of Byzgaloz only two summers ago, are they really going to turn around and roll with a Ray Emery and Steve Mason platoon in net next season? That beggars belief. Not that Philadelphia is a likely Luongo trade destination or anything, but I’d be more surprised to see the Flyers swing for a conservative single in addressing their persistent goaltending need this summer than I would be if Paul "wild card" Holmgren looked to be more aggressive…

The New York Islanders fit was always tenuous, and the Islanders/Luongo rumours that floated around on an off day earlier this summer were contingent on the Canucks acquiring the worst contract in National Hockey League history (DiPietro’s deal) and buying it out compliance style. This would be a total shocker if it became reality.

Finally we get to the Florida Panthers, and really, the Panthers have always been the most likely destination for a Luongo trade. Luongo’s a fit there because he sells tickets, and Florida’s goaltending was putrid a season ago. Dale Tallon also has a history of looking at veterans on overpriced deals as undervalued trade assets and pulling the trigger on acquiring them (see: Campbell, Brian). Finally the best reason the Canucks and the Panthers make the most sense as Roberto Luongo trading partners? The Panthers have a whole bevy, a veritable turd buffet if you will, of bad contracts on the books.

In fairness to Panthers General Manager Dale Tallon, at least some of his woeful contract work is structural. The cap floor rose too quickly under the previous NHL CBA for small market clubs like the Panthers, and Tallon was forced to meet the lower limit by signing guys like Ed Jovanovski and Scott Upshall to weighty contracts. But the point remains that in Fleischman (4.5 M), Jovanovski (4.15 M), Upshall (3.5 M), Kopecky (3 M) and Bergenheim (2.75 M), the Panthers have a whole swath of relatively big deals to send Vancouver’s way in a pure hockey trade.

If we assume that Dreger’s assessment that, "Vancouver isn’t going to take enough money back" to make a Luongo trade work with Philadelphia applies more generally to the clubs Luongo trade posture, I tend to think a pure hockey trade is an unlikely prospect. Certainly it’ll be a non-starter unless Vancouver is willing to take on salary in a deal, and that’s salary that the club almost certainly will have to turn around and promptly use a compliance buyout on…

Retained Salary Transaction

In his conversation with Jeff Paterson and Matt Sekeres on the Team 1040 a week ago, Pierre Lebrun characterized a "retained salary transaction" including Roberto Luongo as "the absolute best case scenario" for the Canucks. Added Lebrun, "I don’t think anyone is picking up 100% of Roberto’s contract in a trade, that’s the sense I get."

We looked into the retained salary transaction mechnaism a few weeks ago in regards to Keith Ballard:

"Retained Salary Transactions," as they’re called in the CBA, are a long time Brian Burke hobby-horse and a new wrinkle in the 2013 agreement. The rules governing retained salary transactions can be found under article 50.5 (e)(iii). The rules governing retained salary transactions are actually pretty simple, though there are a number of restrictions. Teams are able to retain up to 50% of a player’s salary and cap-hit in a trade, and you have to retain an equal proportion of the player’s cap-hit and salary. The percentage of the cap-hit/salary that a club retains must remain consistent from year to year for the duration of the standard player contract traded in a retained salary transaction."

Okay so brace yourself and bear with my hamfisted analysis of the collective bargaining agreement…

If the Canucks were to trade Roberto Luongo by way of a "retained salary transaction" they’d be able to retain a maximum of 2.66 million of Luongo’s annual cap-hit. If the Canucks retained 50% of Luongo’s deal – a hypothetical which I’d describe as a total non-starter – they’d also be on the hook for a tick over 20 million of his remaining salary through 2022. They’d then be forbidden from reacquiring his contract for a duration of one year, and would annoyingly be limited to retaining only two partial salaries in retained salary transactions until Roberto Luongo’s retirement.

Here’s where this gets a bit complicated. According to article 50.5 (e)(D) "all Retained Salary obligations created by a Retained Salary Transaction… shall apply to any Cap Advantage Recapture Amounts applicable to a Retained Salary." You may remember the Cap Advantage Recapture mechanism in the new CBA as the "Luongo rule" which it was dubbed when news of the provision leaked out in the wake of completed labour negotiations.

Let’s try to illustrate this with a practical example. Say the Canucks were to retain 25% of Roberto Luongo’s salary and cap-hit in a retained salary transaction with the Florida Panthers at this years upcoming draft. In such a situation the Canucks would essentially be retaining 1.33 M in cap-hit obligations through 2022, in addition to roughly 10 million in gross salary over nine seasons. That stinks, of course, but the way it would be spun is that it’s also four million dollars in immediate cap-relief which is not insiginificant. Even still, the extent of Vancouver’s retained salary cap commitment to Roberto Luongo wouldn’t quite be set in stone since they’d also have to "retain" 25% of Florida’s ultimate "cap advantage recapture" penalty, the amount of which would be set by the date that Roberto Luongo retires.

As it stands at the moment, the Canucks have had Roberto Luongo’s current deal on the books for three seasons at a 5.33 million dollar cap-hit. During that time they’ve paid him twenty-three million, four-hundred and thirty thousand dollars in actual salary. So while Roberto Luongo’s contract took up a total of 16 million in cap-space over the past three seasons (minus one dollar, technically), the Canucks managed to pay him $7,430,000 more than 16 M in actual salary. That $7,430,000 represents the "cap benefit" the Canucks have accrued from the Roberto Luongo deal up to this point, and they’ll be obligated to have that count against their salary cap upon Luongo’s retirement (if he retires before the expiration of his contract following the 2022 league year).

But in addition to that, in our hypothetical situation, the Canucks would also be on the hook for 25% of the cap benefit recapture cost that the Panthers would accrue between the day they acquired Luongo, and Roberto Luongo’s retirement. If Roberto Luongo retires at the age of 40, that means the Canucks would be obligated to take on 25% of a $4,952,000 cap benefit recapture cost over three seasons. Essentially that would leave the Canucks with $2,889,334 in lost cap-space per year for three seasons, a figure which represents the sum total of the extra $412,667 in cap benefit recapture that they’d retain in the Panthers trade, on top of the $2,476,667 annual cap-hit from the cap benefit they’ve already accrued through the first three seasons of Roberto Luongo’s death star contract.

If Roberto Luongo were to retire following his age 41 season instead, then the cap benefit recapture hit would balloon to $3,869,583 annually over two seasons.

By the way, something along these lines (albeit probably less dramatic) is what Pierre LeBrun described as the "absolute best case scenario" for Mike Gillis and the Canucks on the Luongo trade front this summer…

I couldn’t have put this section together without capgeek‘s handy "cap benefit recapture calculator."

Waivers

If a classic trade can’t be worked out, if a retained salary transaction proves to be too much of a head-ache, and if Vancouver isn’t willing to stomach dropping nearly thirty million on a compliance buyout, then the Canucks could eventually put Roberto Luongo on waivers.

Elite talent is rarely avaialable for free in the National Hockey League, and I think Luongo would be claimed if he were to be exposed on the waiver wire, but the Canucks would get zip in exchange. On the other hand, they wouldn’t have to pay out any additional money either…

Voiding the Contract

This is a prospect that was broached by Darren Dreger this offseason, and by Iain Macintyre following the 2013 NHL Trade Deadline. Essentially if Roberto Luongo doesn’t report to training camp this upcoming fall then the Canucks can terminate the contract on the grounds that Luongo is withholding services. This is similar to what happened with Tim Thomas, except that Tim Thomas’s cap-hit remained on the books for Boston (and eventually the New York Islanders) because his contract was of the 35+ variety.

It’s way to soon to assume that this is any type of realistic option. Of course it would also involve the Luongo-trade drama dragging on through another summer, which is certainly suboptimal for both the goaler and the Canucks.

Conclusion

Trading Roberto Luongo is effing complicated. Compounding that issue is that, despite Luongo’s status as an elite netminder, there appears to be a limited market for his services while he’s attached to his current life time deal. Perhaps Mike Gillis can pull a rabbit out of his hat this summer, but I wouldn’t count on it.

Frankly it seems legitimately possible that Roberto Luongo’s contract is simply the exception to the "Scott Gomez corollary" a vague rule I made up last season which contends that "if Scott Gomez could be traded, then no player is truly immovable."





