The Jared Cowen saga

The Jared Cowen saga
By Nick Valentino

That Jared Cowen will never play a game at any level of the Toronto Maple Leafs organization is a foregone conclusion. The question that will be answered in a few weeks is how well paid he will be for that privilege.

Cowen, 25, technically remains a player in the Maple Leafs organization while he awaits the decision of an arbitrator as to whether the defenceman, who has struggled with injuries for most of his career with the Leafs and Ottawa Senators, can have his contract bought out by his current team.

The Leafs, in kind, are eager for the arbitrator’s decision due to the serious salary cap ramifications for the team.

This saga begins with Cowen’s current contract, which he signed with the Ottawa Senators prior to the 2013/14 season. The terms, $12.4 million over four years, seemed reasonable at the time from the perspective that the team expected him to be a solid top-4 contributor, if not the eventual partner for superstar Erik Karlsson.

That reality fell short of those expectations is where Cowen’s troubles really began, as he spent much of the time under that contract dealing with injuries and, eventually, becoming a lightning rod for criticism for both his own, and the team’s, play. Eventually, he was made a key piece in the trade that saw the Leafs accept a package of bad, short term contracts as compensation for the Senators taking on all of Dion Phaneuf’s long term deal.

Cowen’s troubles, though, were exacerbated by the contract itself. The contract’s structure was such that his final two years under the deal would pay him more actual dollars than his cap hit, including a $4.5 million salary for the current season. A buyout in the final year of the contract pays Cowen only one-third of the remaining salary because he is younger than 26-years-old. Split over two years, that means Cowen would be owed only $750,000 per year, resulting in a savings that generates a $650,000 cap credit this year:

 

Season Actual Salary Initial Cap Hit Actual Cost Savings Buyout Cap Hit
2016/17 $4,500,000 $3,100,000 $750,000 $3,750,000 -$650,000
2017/18 $0 $0 $750,000 -$750,000 $750,000

Figures courtesy of CapFriendly.com and SportsNet.ca

Cowen, who came to the Leafs with an injury in February, argues that he is still dealing with the effects of his injury and, therefore, cannot be bought out. The Leafs, however, maintain that Cowen was cleared to play shortly after his arrival in Toronto, an opinion shared by Cowen and his agent at the time. The team, however, not only chose not to play Cowen, but expressed at that time that he would be bought out and he was free to begin speaking with other teams about a contract for the 2016/17 season.

While it’s unknown if Cowen and his agent spoke with other teams, what is known is that, during the offseason, Cowen elected to have another surgery to further repair damage resulting from a torn labrum, an injury that has affected him for several seasons and, as such, cannot be cleared medically to play in the NHL.

Thus, the stand-off between the team and the player depends on how the arbitrator views the player’s current rehabilitation from surgery as an extension of the injuries he has dealt with for several seasons or if the Leafs’ medical staff clearing Cowen to play last season is the medical opinion that should hold sway – a $3 million decision, from Cowen’s perspective.

What this means for the Leafs, however, is another matter.

Beyond the monetary savings involved which, as we’ve seen from the Leafs on many occasions, especially since they began their current rebuild, borders on inconsequential, there are the salary cap implications. According to CapFriendly.com, Toronto’s current cap obligations total just under $72 million, placing them about $1 million under the $73 million cap for the season. These obligations include more than $10.8 million in buried, retained, and bought out cap dollars.

Should Cowen win this arbitration, Toronto would add to that already ridiculous figure another $3.1 million. More importantly, the team would go from $1 million under the salary cap to more than $2 million over it. Since the NHL does not allow this, Toronto would have to place one of Nathan Horton, Stephane Robidas, or Joffrey Lupul on long term injured reserve (LTIR) for the purpose of gaining cap relief in the amount of that player’s salary cap amount.

(As an aside, if we add these three injured players’ AAV totals to Toronto’s “dead” cap number above, that results in a sum of more than $24.3 million, or almost 34% of their total cap responsibilities, that the Leafs are paying players to stay home or play for teams other than their NHL franchise. And, that’s before adding in Cowen’s AAV.)

Where this will cause the biggest problems for the Maple Leafs exhibits itself after the current season. Many of the team’s young players, including Auston Matthews, Mitch Marner, and William Nylander, among others, are on bonus-heavy contracts. Considering the scoring success these players are demonstrating in the early days of this season, the team needs to prepare for the cap implications that these bonuses affect.

For example, Matthews alone could increase his effect on the Leafs’ salary cap from under $1 million to more than $3.7 million if he continues to score at his current pace. Factor in that the team has almost $9 million in promised bonuses for this season (only a percentage of which will actually get paid out) and the team’s cap obligations could explode as a result. What is more, when it comes to applying bonuses to a team’s salary cap, there’s no relief to be found in LTIR. This rule can only provide relief to a team during the season.

The Maple Leafs could be in a situation where they remove a significant number of their “dead” cap obligations due to the expiration of many of the contracts we’ve discussed above, only to replace them with a significant amount in penalties. This not only puts at risk their ability to field a strong supporting cast for their emerging young stars, but also risks repeating the same problem in 2018/19 since those young stars will still be eligible for many of the same bonuses next season.

The longer Toronto continues this cycle of cap overages and penalties, the harder it will be for the team to take the step needed to go from promising’ to ‘contender’.

 

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