The NHL's first buyout period of the season officially opens on Friday.
Beginning at 2 p.m., teams have the option to put players on unconditional waivers for purposes of a buyout. For players with no-movement clauses, teams can immediately proceed with a buyout.
The Penguins have used a buyout just three in their history, first buying out Sebastien Caron and Shane Endicott in 2006, then buying out the remainder of Jack Johnson's contract in 2020. The Penguins will be paying that Johnson buyout off through 2026, with the buyout cost rising to $1,916,667 for next season, and then dropping to $916,667 for the final three years.
How is that math calculated?
If a player is older than 26, the team is still responsible for two-thirds of the remaining salary. If a player is younger than 26, the team is only responsible for one-third. Full signing bonuses are still paid out in any case.
To be clear: That is salary. Straight cash. Not the salary cap hit. That's calculated differently.
The amount of time a team has to pay out the remaining salary is equal to double the amount of time remaining on the contract at the time of the buyout.
The actual cap hit is calculated the following way, per CapFriendly:
1. Multiply the remaining base salary by the buyout amount (as determined by age) to obtain the total buyout cost
2. Spread the total buyout cost evenly over twice the remaining contract years
3. Determine the savings by subtracting the annual buyout cost from Step 2 by the player's base salary
4. Determine the remaining cap hit by subtracting the savings from Step 3 by the player's average annual base salary.
The Penguins are looking to shed some salary this offseason. Would it make sense for the Penguins to buy out any players? Let's break it down.
JASON ZUCKER
Zucker makes the most sense of any of the Penguins' potential buyout candidates, though it still seems unlikely. He only has one year remaining on his contract, meaning the buyout would only last for two years.
Zucker's contract carries a cap hit of $5.5 million. A buyout would leave the Penguins with a $2,033,334 cap hit for Zucker next season, freeing up $3,466,666 in cap space. Year 2 of the buyout would leave the Penguins with a $1,733,334 cap hit for Zucker.
Gaining nearly $3.5 in cap space toward next season is appealing. But that $1,733,334 penalty in Year 2, when Zucker's cap hit would otherwise come off the books completely as his contract expires, would be tough to swallow. The salary cap isn't expected to rise by a significant amount for another two or three years, so taking on that dead cap in another (nearly) flat cap year would be challenging. The Penguins don't have many free agents in the summer before that 2023-24 season, but the biggest one of the bunch is Tristan Jarry, who will likely get a raise on his $3.5 million contract. Having $2.65 million in dead cap between Zucker and Johnson that year would be less than ideal.
With Zucker having just one year left on his contract, if the Penguins really wanted to get rid of him to free up salary, a trade would obviously be more appealing, even if they have to retain salary. Teams can retain a maximum of half of a player's cap hit in a trade. If the Penguins were to move Zucker and retain the maximum salary salary, that would leave them with only $2.75 million in dead cap from his contract and free up the other $2.75 million, which isn't too far off from what Year 1 of a potential buyout would do. The downside would be that the Penguins would likely have to include some sort of draft pick or prospect in a trade in order to make the trade worth it for the acquiring team. It would be a pure salary dump to a team with ample cap space, and a team like Arizona might need a sweetener to make it worth it for them. But that's a better alternative than having dead cap space for a second year in a buyout.
MIKE MATHESON
Shedding Matheson's $4.875 million cap hit would go a long way, especially given that it would open up a spot for a cheaper option in P.O Joseph on the left side.
There's zero chance of the Penguins doing that with a buyout.
Matheson has four years left on his deal. Since buyouts are paid out over double the amount of years remaining on a player's contract, the Penguins would be dealing with the consequences for another eight years.
Matheson's cap hit would be $2.25 million for three years, $1.750 million for one, and then $1.375 million for the final four years, through 2029-30.
That's just not going to happen.
MARCUS PETTERSSON
If a left-handed defenseman is moved, Pettersson seems like a more likely candidate than Matheson. As I wrote in Friday Insider, the front office has had discussions already on a potential Pettersson trade in order to shed some (or all) of his $4,025,175 cap hit.
Any chance of that happening through a buyout instead of a trade, though?
Probably not. As with Matheson, the amount of term left on Pettersson's contract just makes it not feasible.
Pettersson has three years left on his contract, so a buyout would last six years. It would cost $1,341,725 for all six years, through the 2027-28 season.
A trade is significantly more likely.
BROCK MCGINN
McGinn met expectations for a bottom-six role last season. With a $2.75 million cap hit, the Penguins could likely replace his services with someone with a more affordable contract.
Just as with Matheson and Pettersson, the issue with buying out McGinn would be the term.
McGinn has three years remaining on his four-year contract. The buyout would cost $916,667 each year over six years.
It's just not worth it.
JEFF CARTER
Last season Carter signed a two-year extension that carries a $3.125 million cap hit and a full no-movement clause.
The problem with a potential buyout of that contract is that because of the structure of the contract, it wouldn't have any impact on the cap hit at all.
The contract has a salary structure that is $250,000 higher in the first year than the second year. Because the contract pays more in the first half of the deal than the second and is considered front-loaded, the cap hit will remain in full in the event that Carter retires or is bought out during the deal. An assignment to the AHL would only reduce the cap hit by $100,000.
The only way to unload Carter's cap hit would be by trade, and because of the full no-movement clause, he would have to approve any potential deal.
That small difference in salary between years is likely something Carter's camp pushed for in negotiations, because it essentially guarantees that Carter won't be bought out, giving him total control over where he plays.
