Taking a deeper look at the Dion Phaneuf deal
So in what has been heralded as an “untradable” contract, has now been traded twice. Originally, the Ottawa Senators had acquired Dion Phaneuf from the Toronto Maple Leafs in a similar style of trade. The Senators dumped Colin Greening, Jared Cowen and Milan Michalek‘s 2-3 year salaries and in exchange, took on 100% of Phaneuf’s 7 million dollar cap hit for which at the time of the trade, still had 6 years left. Dion Phaneuf has now been traded to the Los Angeles Kings. The trade is as follows.
Los Angeles Kings receive:
Dion Phaneuf (25% salary retained by the Senators)
Ottawa Senators receive:
Now the big issue with this trade is that this isn’t your traditional trade. Normally, one can look at the assets acquired and make a determination of whether that move was good or not for the future, or for the now. But this trade is a mixture of cap dump and replacement.
For the Ottawa Senators, this was a trade that needed to be done. With Bobby Ryan locked up until 2022 with a 7.25 million dollar contract and Karlsson on the second last year of his contract, the Senators are desperately looking for ways to cut their costs down as a budget team. Some other big names needing contract extensions would be Derick Brassard and Matt Duchene in the same year. Now, the problem lies when you realize what they received in return. Marian Gaborik, being the other side of the cap dump has a cap hit of 4.875 million dollars. When you add in the retained 1.75 million dollars on the Phaneuf contract, you’re only looking at a cap hit saving of 375,000 dollars (which isn’t even the amount of a max entry-level contract). However, what always needs to be considered when talking budget teams is the amount of “real” money saved.
Cap hits are not always what you pay your players, it’s the average annual salary that is paid to a player per year (not including bonuses). So for example, Dion Phaneuf’s contract is a 7 year, 49 million dollar contract. However, Phaneuf made 8 million dollars of actual salary money in his first year of the contract, while compared to his last year, he will make 5.5 million dollars. This was one of the key reasons Ottawa traded for Derick Brassard. While Brassard’s cap hit is 5 million dollars, the Senators are only paying him 3.5 million this year and the next.
So taking this into consideration and subtracting Phaneuf’s salary amount by Gaborik’s salary amount in the remaining 3 seasons of their contracts (not including this year), the Senators will save 7.675 million dollars in salary alone. Now of course, you must factor in the 1.75 million a year that Ottawa pays towards Phaneuf’s contract, and you’re looking at a savings amount of 2.425 million dollars. At surface value again, it does not seem