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New York Rangers Place Sean Avery On Waivers; Dallas Stars Salary Cap Issues Ahead?

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Over three years after he was signed by the Dallas Stars to a four-year, $16 million contract, Sean Avery continues to haunt the nightmares of the Dallas Stars franchise. When the Stars placed Avery on waivers in the middle of the 2008-09 season, he was assigned to the Hartford Wolfpack with a gentleman's agreement that the New York Rangers could be interested in eventually claiming him on re-entry waivers. That's exactly what happened, and the Stars were obligated to pay half of his annual salary for the remainder of the contract.

Since then, the $1.9 million the Stars owe Avery each season has sat on the salary cap charts and been a thorn in the side of the Stars, especially considering the payroll restrictions the Stars have been under the past few seasons. That salary, counting on the payroll just like any other player, was desperately needed to help shore up a shaky defense or adding depth at forward. As time progressed, however, the Stars adjusted and moved on and were heading into the final season of this painful obligation.

With Sean Avery continuing to make more noise off the ice than on it, however, he became expendable on an improving New York Rangers roster and yesterday he was placed on waivers by the one team that appeared able to get the most out of him. With word from around the NHL that Avery likely won't be claimed by another team, there's a good possibility that he is assigned to the AHL or even heads to Europe. The $1.9 million obligation to Avery would then no longer count against the NHL salary cap.

If that happens, then the Stars could suddenly be facing a salary cap issue. That $1.9 million was vital to keeping the Dallas Stars above the salary cap floor...

[Update] Some clarification on some of the points made below: Scott Glennie's AHL salary is going to apply to the cap while on IR, not his NHL salary. This is a significant difference ($1.9 million compared to $65k). Also, Brad Lukowich would apparently not need to pass through waivers to come to the NHL. [End Update]

This past summer, the NHL salary cap floor jumped up to $48.3 million and the Dallas Stars were nearly $8 million under that lower limit after Brad Richards departed via free agency. The Stars also let a number of other free agents, including Brandon Segal and Brian Sutherby, depart the team and then set forth in free agency to not only fill the roster -- but to get back above that cap floor.

The Stars signed six free agents and filled that void in the cap to get above the floor, while addressing the various needs of the team. 

As it stands right now, the Dallas Stars have a salary cap of about $49.9 million. With the cap floor set at $48.3 million this season, losing that $1.9 million would appear to place them about $300,000 below the cap floor -- something the Dallas Stars cannot afford to happen. While the penalties for not adhering to the salary cap restrictions vary, there's a possibility that lost draft picks and fines to the team would result from not being compliant.

Now the question becomes about what the Dallas Stars can do to get above the cap if Avery isn't claimed and that obligation to his salary no longer applies. 

It's only $300k, relatively little in NHL salary standards, but it's a bit of a tricky situation with the Stars. The Stars are already at the 50-contract limit, so signing a player just to get above the floor won't exactly work -- unless the team lets a player go.

When trying to determine what route the Stars will take in solving this puzzle, it's important to remember the complicated nature in which the salary cap operates. The Cap changes on a day to day basis, determined by the cap hits of the players currently at the NHL level. The longer a player stays at the NHL level, the more his salary boosts the cap hit of the team. Most figures you'll see are based on year-end totals, figured as if that player had played for the entire season at the NHL level.

So how will this affect the Dallas Stars?

One option would be to send Tomas Vincour and Philip Larsen to the AHL and bring Brad Lukowich up to the NHL to serve as the team's 8th defenseman. Lukowich's salary jumps to $1 million at the NHL level and about six weeks or so with Dallas should be enough to get that year-end total above the cap floor. Complicated this plan, however, is the fact that Lukowich would have to pass through waivers in such a transaction.

Another, more logical option, is to "take advantage" of Scott Glennie's concussion. That's certainly a very crude way of putting it, but there's a good possibility that this is what the Stars end up doing. 

By placing Scott Glennie on injured reserve to start the season, his NHL salary of $1.6 million will count against the cap -- yet he won't be taking up a roster spot on the Stars. This allows the team to continue to play with Tomas Vincour and use Glennie's contract to keep the cap numbers above the floor.

Now, by our very crude calculations, Glennie would have to stay at the NHL level until the first week of November in order to eat up the $300k shortfall the Stars are facing. At that point, the Stars would be assured of staying above the cap after he's assigned back to the AHL. Unfortunately, there's a good chance that Glennie would be healthy and ready to play before then. The Stars can't keep him off the ice, stunting his development, just to solve salary cap issues.

What is likely to happen is the Stars enter the season like they are now: with Glennie on the IR and Vincour playing with the NHL roster. The Stars are likely going to be dealing with injuries and call ups just like every season in the NHL and it's important to remember that as the Stars make these moves throughout the season their overall salary cap hit is adjusted. This is why, even though the Stars might be facing a short term issue, this likely won't be a problem just a few months into the season.

Of course, there's always other scenarios to consider. The Stars could make a trade, using this financial issues to facilitate a trade that might have already been under consideration. There's the more drastic option of placing an expendable player on release waivers and then using that roster spot to make another free agent signing.

In the end, $300k or so shouldn't be too hard for the Stars to overcome. The team is apparently confident that they're in good shape moving forward and right now there are no signs of any drastic action that could be taken by the team to get above the floor. For now, I'm not expecting anything crazy to be done and for the Stars to find the simplest way to solve this puzzle.