Thursday, July 26, 2007

Lowe strikes again
Oilers sign Penner to offer; Burke's head explodes

Anaheim GM Brian Burke is on record saying he will match any offer made to Dustin Penner.
Oilers GM Kevin Lowe has about $14 million to spend and he's still looking to bag some talent. In fact, the name of Anaheim power forward Dustin Penner, a restricted free agent like Vanek -- has surfaced as a potential target.
The Edmonton Oilers are back at it again, tendering a five year, $21.5 million offer sheet to Anaheim Ducks Group II restricted free agent Dustin Penner.
Here we go again...

I'll have more to say later, but at first glance, this makes a heckuva lot more sense to me than putting all of that money out there for Thomas Vanek. When you're in a situation where the other team is nearly a lock to match, the only way I can see it making sense to exert pressure on their cap structure is when you're talking about a team in your own conference, with whom you're competing for one of eight playoff spots.

Now, it makes even more sense to do so within your own division (which is why the Maple Leafs would have been well-served to drop a big-time offer sheet in Ray Emery's lap a few weeks ago), especially with play weighted so heavily there (40 per cent of teams' games are inter-divisional).

And while it seems absurd to talk about the Oilers competing with the Ducks, a team likely to be far ahead of them in the conference standings, this is a deal going on the books for years to come, one that forces Anaheim to pay one of it's young players far more than they would have from now until 2012-13.

I suppose the real question coming out of all of this, considering Burke will sign the deal, is where does it put the Ducks up against the cap? And how far off is a $4.3-million deal from Penner's true worth?

Brian Burke's press conference is going to be priceless.

UPDATE The Orange County Register has more on the dollar figures involved.

UPDATE The more I look at this, the more I think there's a chance Burke walks away. He's got far more important players to sign than Penner in upcoming years and those dollars could very well be used more wisely on a less one-dimensional player.

I guess we'll see. The Ducks' war room is mighty quiet at the moment, and I believe there's more of a discussion going on than Burke had originally thought there would be.

Let's put it this way: If Penner's only ever a second-line forward who can bat in 25 goals and 60 points, does it make sense to pay this much for him and throw in all those picks? Unlike Thomas Vanek (or even Zach Parise, who no one has touched — perhaps out of fear of Lou Lamoriello), who is a legitimate game-breaker, I can't see Penner ever filling a first-line role in the NHL.

UPDATE Lowetide does some excellent heavy lifting on all this business.

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48 Comments:

At 3:17 PM, July 26, 2007, Blogger Nick said...

Edmonton calls Burke's bluff, I love it.

 
At 3:29 PM, July 26, 2007, Anonymous logan said...

A few things:

1- Your sub-headline is misleading. The Oilers didn't sign Penner. They signed him to an offer sheet.

2- According to Hockey analysis it puts the ducks a tad over $52 million with 22 players under contract if they match.

3- If the Ducks match it gives them no room for Selanne without making some real moves.

4- The cap room for Penner and Selanne is suddenly available if Niedermayer retires.

 
At 3:34 PM, July 26, 2007, Blogger saskhab said...

Emery couldn't have been signed by Toronto, he was due for arbitration. Any players with an arbitration hearing scheduled can't be signed to an offer sheet. That, and the Leafs likely don't have the picks to make it happen because they traded a 2nd rounder in 2008 in the Toskala trade.

The Ducks might be in a position to walk if they think Bobby Ryan is ready.

We'll see if Burke is a man of his word... Imagine what Getzlaf could attract next summer as a RFA.

 
At 3:34 PM, July 26, 2007, Anonymous Hooks Orpik said...

This makes Burke giving the washed-up looking Todd Bertuzzi $4 million a year really a head scratcher, while leaving out an appealing RFA.

I like the fact that Edmonton is putting the 'free agent' in RFA. Maybe the old boys will learn you can't go out and give foolish contracts to unrestricted players until you take care of your own, promising young ones.

 
At 3:36 PM, July 26, 2007, Anonymous Frank said...

According to NHLnumbers. com, Anahiem's salary budget for 07/08 - EXCLUDING SELANNE, NEIDERMEYER and PENNER is $43.377 million for 12 forwards, 6 defencemen and 2 goalies. This assumes Bobby Ryan makes the roster this year and his $1.9 million salary plus bonuses are included. It also assumes the 3rd goalie's contract Hiler is a two way - however this is still unclear.

If Burke matches the Penner offer of $5.375 million, the salary budget goes to $48.752. This is for 13 forwards 6 defencemen and 2 goalies. Assuming Neidermeyer doesn't return, Anahiem has to pick up a 7th d-man at $600k bringing the budget to $49.352. This leaves a $1 million cushion for short term injuries during the year.

Bottom line is Anahiem can match, but this means that Neidermeyer and Selanne cannot come back. Also, it puts Anahiem in a tough spot next year if someone offers Getzlaf a big offer when he becomes a RFA.

 
At 3:37 PM, July 26, 2007, Anonymous Lyle Richardson said...

LOL, great headline, James. "Burke's head explodes". Priceless.

Regardless of whether or not he matches, Burke isn't gonna be happy about this. I'll be very surprised if the usually outspoken GM doesn't have a few choice words for Lowe.

If the Oilers are successful and land Penner, they'd best pray they don't get a Lupul redux on their hands. At least with Lupul he was easy to move, at least in a package deal.

If Penner suffers the same fate as Lupul, Lowe'll be stuck with an unmoveable $4.3 million per season bust on his hands for the next five years, and that'll be the fitting epitaph for his management career in Edmonton.

 
At 4:02 PM, July 26, 2007, Anonymous Anonymous said...

Today's big winner - Mike Cammalleri. Today's big loser LA Kings.

Under the rules of arbitration, Cammalleri can present 3 comparable RFA signings. Obviously he will use Vanek's $7.1 million signing. However, under the rules LA Kings can have one of his comparables eliminated from consideration. Obviously, they would request that the Vanek signing be eliminated from consideration.

Now Cammalleri has the Penner signing of $4.3 million as a second comaparable - which cannot be eliminated. And based on the stats, Cammalleri had a way bigger year than Penner. As a result Cammalleri could get a $5.5 to $6.0 million salary award.

I bet Cammalleri puts Kevin Lowe on his Christmas card list!

 
At 4:03 PM, July 26, 2007, Blogger Jes Gőlbez said...

Burke will certainly have some choice words, but Lowe is simply working within the system.

Unlike the Vanek deal (which was just bloody awful) this one makes a lot more sense, and targets the right team. Anaheim is a conference rival, and they are in tight with the salary cap, no matter which direction they go.

Burke ought to still be thanking Lowe for Pronger

 
At 4:12 PM, July 26, 2007, Blogger Doogie said...

The Oilers didn't sign Penner. They signed him to an offer sheet.

That's got to be the most asinine semantic argument I've read on a hockey blog. Seriously.

I'm kind of waffling between wanting to keep a tight hold on that first rounder, in case something very shiny comes our way, and letting it go with the knowledge that the Oilers might not suck so badly they fall into the lottery if they make enough of these moves. Clearly, we see where Lowe stands on this gamble.

 
At 4:15 PM, July 26, 2007, Blogger Matt said...

The day Mike Cammalleri gets a $6 million contract is the day I stop watching hockey. Are you out of your mind?

 
At 4:21 PM, July 26, 2007, Blogger saskhab said...

Just because a contract can be used as a comparable doesn't mean the team's own comparable example won't be accepted over the player's figure. This does little for Cammalleri's arbitration case, and he won't get over $5m. Briere & Gomez got that last year after having better years and better careers than Cam has had so far.

 
At 4:21 PM, July 26, 2007, Anonymous hooks orpik said...

$6 million seems high for Cammalleri, but these RFA contracts could inflate the arbitration process even further for guys that follow.

Contracts like Nash and E. Staal can too, but atleast they are the faces of their franchises and have performed.

 
At 4:28 PM, July 26, 2007, Anonymous kwyjibo said...

Your sub-headline is misleading. The Oilers didn't sign Penner. They signed him to an offer sheet.

Yeah good point. And now that you mention it, Burke's head didn't explode, either. I think Mirtle needs a fact checker.

 
At 4:30 PM, July 26, 2007, Blogger James Mirtle said...

The Leafs could have signed Emery to an offer sheet; he hadn't filed for arbitration until a few days into free agency.

 
At 4:34 PM, July 26, 2007, Blogger saskhab said...

Again James, they didn't have the picks to make the offer even in that first week after July. Besides that, after the Blake signing, they didn't have the cap space.

It's a fine theory, but if the Sens had walked away from Emery, the Leafs have 3 multi-million dollar goalies and haven't really improved their team beyond that.

Maybe the Leafs should set aside the money and picks next year for Spezza instead.

 
At 4:41 PM, July 26, 2007, Blogger James Mirtle said...

I'm simply using Emery as an example of how a team could use an offer sheet to pinch a division rival; obviously Toskala wouldn't have been brought in if this was part of Ferguson's plan of attack, and he could have dealt for a draft pick in order to have the necessary number to sign an RFA.

Besides, the Senators would most likely have matched, with the net result being they were another $1-million or so closer to the cap.

 
At 4:43 PM, July 26, 2007, Blogger Kel said...

I don't care what Burke will say about the situation. I think he'll say something entertaining and anyway it matters little. Going into this CBA, he's smart enough to realize cycles are much shorter and teams can't expect to keep their good players together for long. He may not show it on TV, but I think deep down he'd say to himself he made good use of the opportunity to win the Cup, even though he may need to build a totally different team to win another one.

 
At 4:54 PM, July 26, 2007, Anonymous Anonymous said...

Hey saskhab, check out the numbers. Gomez 05/06 season: 82 games 33G - 51A - 84 Pts and +8.
Cammalleri 06/07 saeson: 81 games 34G - 46A - 80 Pts and +5.

The numbers are virtually identical. Gomez awarded $5 million. This year the cap is 15% higher, so $5million + 15% = $5.75 million award. Like I said between $5.5 and $6.0 million.

Also, Penner last year 29G - 16A - 45 pts.and -2; compared to
Cammalleri 34G - 46A - 80 Pts and +5. So if Penner gets $4.3 million Cammalleri should get $5.5 to $6.0 million.

Remeber arbitrators have to go by the numbers! In all likelyhood LA and Cammalleri will settle before arbitration at $5 million for 3 years. Either way Cammalleri has to put Kevin Lowe on his Christmas card list.

 
At 5:20 PM, July 26, 2007, Blogger Paul said...

and he could have dealt for a draft pick in order to have the necessary number to sign an RFA.

Is it my turn to be overly pedantic? OK...you can't do this, it has to be your own picks.

But your point is well received. I'd love to see more teams screw over divisional rivals via offer sheets. At the very least it would make the off-season more interesting.

 
At 5:29 PM, July 26, 2007, Blogger James Mirtle said...

No, that's a fair point, Paul, and something I should have remember. For reference, this is from the CBA: "Clubs cannot acquire picks to use as compensation (with the exception being a Club's own draft selections that are traded and then re-acquired)."

 
At 5:53 PM, July 26, 2007, Anonymous Keith said...

Well, this makes a heck of a lot more sense than the Vanek offer, especially since there is a chance that he will accomplish more than just pissing off the other GMs in the league.

However, given what Lowe had to pay in order to get his 3rd rounder back for this move, giving up a first, two seconds and a third round pick for Penner and the scrub they got from the Islanders, on top of having to pay $21 million over 5 years is excessive.

This is very poor asset management, imo, and the long term consequences of tossing those draft picks away are going to be greater than the benefit Penner would bring.

 
At 6:23 PM, July 26, 2007, Blogger The Falconer said...

Another aspect of this signing is that it puts a lot of pressure on Niedermayer and Selanne to make up their minds. The CBA puts GMs under constraints but it also puts pressure on players nearing retirement to make a decision in the summer and stick with it.

 
At 9:05 PM, July 26, 2007, Anonymous Anonymous said...

If you're Joni Pitkanen's agent, and the Oil want to re-sign you during the year, wouldn't you wait until the RFA period when all those pissed off GMs want to take a slice out of Lowe and make your client rich??

 
At 10:24 PM, July 26, 2007, Blogger namflashback said...

anony,

sure, and if someone does so to Pitkanen or Stoll-- you take the picks if you can't afford to pay him.

 
At 10:43 PM, July 26, 2007, Blogger Black Dog said...

Thing is, we know there are two pissed off GMs but Buffalo isn't going to overpay someone out of spite - not their style - and while it certainly is Burke's style, he doesn't have the cap space, not with big tickets on his payroll already plus Getzlaf, Perry and Beauchemin looming.

If I'm a rival GM I'm probably pretty happy with Lowe right now. The defending champs look to be down Niedermeyer, Selanne and maybe Penner. If they match then they face cap issues. If I'm any team in the west looking to contend next season I'm probably pretty happy right now.

 
At 10:44 PM, July 26, 2007, Blogger Joe said...

The issue for the Oil is not Lowe breaking this whole gentleman's rule thing. Big deal, he's doing things to make his team more competitive, and doing them in ways that the owners agreed to.

The issue here should be that Lowe is rebuilding in the entirely wrong way. Like I said on LT's blog, RFA is awesome for a team trying to rebuild on the fly, without falling to the league basement, or for a team that is one or two pieces away from a Cup, because their draft picks aren't worth that much, at least not as much as getting a new, young, quality player in the peak of his career. RFA is NOT a good building tool for rebuilding a team from nothing, and that's what Kevin Lowe has to do, because of a combination of bad luck and bad personnel moves. Sometimes, that happens, and you need to realize it has happened, and then adjust your plan accordingly. Fooling yourself into thinking you're better than you are, like Lowe is doing, and looking for stopgap solutions, like Lowe is doing, will do the organization no good. The Oilers are back at square one, and need to realize this, and build accordingly (meaning: THROUGH THE DRAFT).

 
At 12:23 AM, July 27, 2007, Anonymous Anonymous said...

This is just the tip of the iceberg. Look at the Pens. They have oodles of young talent all slated to become RFAs in the next 2 or 3 years. I am going to assume the Pens will give Crosby the earth moon and stars but what about Malkin, Staal and Co. Living in a division with the Rangers and the Flyers will make that expensive.

 
At 12:27 AM, July 27, 2007, Anonymous Anonymous said...

Gee, this is going to ruin Brian Burke's big weekend. Today and Friday he's in Penticton B.C. to be inducted into the BC Hockey Hall of Fame along with Brett Hull, and Dennis Kearns. What he did to earn induction into the Hall of Fame I have no idea. I mean Vancouver only won one first round playoff series in all the years he was with the Canucks. Maybe he made a large financial contribution to the Hall.

Apparently, he's taking the Stanley Cup to the ceremonies. Then on Saturday he's going to Chilliwack - along with the Cup - to celebrate with the Chilliwack Bruins - the WHL team he owns 50% of. I think the party is more of an attempt to sell season tickets than actually celebrate with his team.

Then on Sunday he's taking the Cup to a private party with the "big money rollers" of Vancouver. The ordinary citizens of Vancouver will not get to see the Cup. I wonder if he's charging the invited guests for autographed photos of the Cup and Burke together. I mean the man works every angle possible.

Now, instead of being able to talk about his monumental Stanley Cup win, the only thing people will ask him about is whether he is going to match Lowe's offer.

Yes Brian Burke is going to be mightily pissed!! Good timing Lowe!!!!

 
At 12:48 AM, July 27, 2007, Anonymous The Hockey Rabbi said...

I've seen a bunch of comments on other sites defending the Oiler$ two recent moves by saying that since the salary costs are fixed, the Oiler$ signings are not "inflationary". Apparently, the argument says that since salary costs are fixed at 50+% of revenues these outlandish offer sheets don't really create salary "inflation". To me, that's only part of the cap equation. The next question is, how will the cap space get allocated. Top UFA's who have the most leverage (Crosby excluded) have been getting about 14.5% of the overall cap space alloted per team. In order to fit an entire roster under the cap, the scale has to slide downward. Lesser players must get paid less. Additionally, teams must use their leverage to keep salaries for young players (who don not yet have UFA leverage), down. Otherwise franchises will not be able to sign a roster full of deep players. You'll see teams with a handful of better players and 17 below average ones! That's not what the CBA is supposed to accomplish (in my opinion anyway). The Oiler$ are disrupting that salary scale. And the fans will ultimately suffer since, as you correctly point out, teams will have to save money by spending less elsewhere. Which is another way of saying your team will have 4 decent players and 17 below average ones. I think the Oiler$ cut off their nose to spite their face!

 
At 1:14 AM, July 27, 2007, Blogger Reagen Sulewski said...

That, or you're just not going to see players on the downside of the careers getting deals for $5mil a season.

 
At 2:44 AM, July 27, 2007, Blogger Joe said...

Well, I've got to figure that if the "Oiler$zzzzzzzz" do inspire or push teams to go to a roster filled with 4-5 good players and 15 bad ones, then those teams will just have to inhabit the bottom of the league for a few years while they suck on their stupid contracts, and every other SMART team in the league rises to the top.

Remember, this is still just as new to the GMs and such as it is to us. There ARE going to be mistakes made, mistakes that last 4-8 years depending on the contract. Some teams (I'm looking at you Glen Sather) will put entirely too many eggs into too small of a basket, and pay for it for a few years. Once the rest of the league sees what happens to those teams, they'll act themselves to make sure that doesn't happen to them. Your 20 goal scorer wants 6 million a year? Fine, to hell with him, let someone else get strapped with his stupid contract.

 
At 5:53 AM, July 27, 2007, Anonymous Anonymous said...

"Otherwise franchises will not be able to sign a roster full of deep players. You'll see teams with a handful of better players and 17 below average ones!"

Sorry - that's how the world works buttercup. The rich/elite are worth (non-linearly) more than the poor/non-elite.

Look at the Ducks this year. Elite players surrounded by min. wagers for the most part.

 
At 5:57 AM, July 27, 2007, Anonymous Anonymous said...

The Oilers are back at square one, and need to realize this, and build accordingly (meaning: THROUGH THE DRAFT).

The draft takes too long: 2-3 years before a player plays in the NHL and extra more before they become impact players. The draft is also a crap shoot... why not go after a known commodity like Vanek?

 
At 7:57 AM, July 27, 2007, Blogger stytzer said...

Burke will walk away from this one. He might be able to solve the puzzle this year - especially if Niedermayer retires, though then he will be in need of another Dman. But then he'll be in real trouble next year, when he has to re-sign Getzlaf and Perry.

He overpaid for Bertuzzi and will pay the price now!

 
At 9:45 AM, July 27, 2007, Anonymous Dennis Prouse said...

I don't blame Burke for taking the Cup all over BC after the way he was screwed by the Canucks' previous ownership. After taking it to BC, though, I think Burke should really take the Stanley Cup to the lobby of whatever office building in which that empty suit Stan McCammon currently works. After that, he should take it to the street on which that recluse John McCaw lives, and hold a photo opportunity there.

As for Dustin Penner, I don't see where Burke has any choice but to walk away. His risky signing of Todd Bertuzzi has left him with zero room to move under the cap. Now, Bertuzzi may have a revival playing for his buddy Burke, in which case $4 million for Bertuzzi is better money than $4 million for Penner. Burke has chosen to "live in the now", as Wayne and Garth would put it, so he simply can't have both of them.

 
At 10:58 AM, July 27, 2007, Blogger PPP said...

Now that Derek Roy signed a 6 year $24M contract the question is which one is a better deal?

Does seeing the floppingest Sabre get that much money make Penner's deal look better or worse?

 
At 11:22 AM, July 27, 2007, Anonymous Keith said...

PPP - The Sabres arent set to pay four draft picks in the first three rounds of one of the deepest drafts in years to keep Roy.

I think it would be hilarious if the Ducks don't match, get Lowe's first three picks in 2008. The Oilers still finish bottom five in the league, and win the draft lottery. Tavares wins his fight, and gets moved up a year, and the Ducks grab "the next Crosby" with Kevin Lowe's pick.

 
At 11:24 AM, July 27, 2007, Anonymous Anonymous said...

PPP, I don't know how you can compare Roy and Penner. Did you just want to take a shot at Roy? Did he steal your girlfriend in highschool or something. Everybody dives; get over it!

 
At 11:43 AM, July 27, 2007, Blogger PPP said...

Good point Keith on the picks but money-wise which would you say is the better deal?

Anonymous, not everyone dives. Roy is a huge diver. And yes, it was mostly just to take a shot at the floppingest player on the floppingest team :)

Didn't steal my girlfriend although she hates divers too so I doubt he'd have much luck.

 
At 1:02 PM, July 27, 2007, Blogger Matt said...

Wow. A Leafs fan crying about Roy's diving. Big surprise there.....

 
At 1:41 PM, July 27, 2007, Blogger PPP said...

Almost as surprising as a Sabres fan trying to defend it...

What is taking Burke so long to match?

 
At 1:51 PM, July 27, 2007, Blogger Bryan said...

Scott Niedermayer was drafted from the pick NJ got when Toronto stole away Tom Kurvers. Burke has to let Penner walk and take the picks

 
At 2:37 PM, July 27, 2007, Anonymous Anonymous said...

Burke can't match.

First of all Neidermeyer IS COMING BACK!!!! This retirement story is all hype by Neidermeyer. There is no way he is walking away from $13.5 million GUARANTEED for the next two years. What a bunch of BS this story has been.

Second, Burke cannot lock in $4.3 million each year for the next several years and still re-sign Getzlaf and Perry next year. If he signs Penner, some GM will offer Perry and Getzlaf $5 million each next year when they become RFAs. They would be worth the money - Penner is not.

Third, if Burke signs Penner and Neidermeyer returns he would have to keep Bobby Ryan down in the AHL for the year AND dump about $3 million of salary - NET. Since you have to replace the "dumped" player with a minimum wage player you have to dump at least $3.5 million of salary GROSS.

The only players making around or more than $3.5 million are Schneider, Bertuzzi, Pronger and McDonald.

Schneider I'm sure negotiated a no trade clause in his contract. Pronger is to important to the club to trade. Bertuzzi is untradeable at $4 million per year. This leaves only McDonald as a possible trade at $3.3 million. But McDonald is worth far more to the team at $3.3 million than Penner is at $4.3 million.

Therefore NEIDERMEYER IS NOT RETIRING AND BURKE IS NOT RE-SIGNING PENNER. Given that Burke loves to be in the spot light, he won't announce his decision until the very last minute next Thursday!

 
At 3:02 PM, July 27, 2007, Anonymous Anonymous said...

With Selanne + Penner gone - that's 80 goals gone bye bye.

 
At 5:13 PM, July 27, 2007, Anonymous Keith said...

Hard for me to say, PPP. I haven't seen Roy play a ton. Penner is quite one dimensional, however, and had only one good year on a stacked Ducks team. That is a red flag to me.

For him to go from one of the best teams in the West to one of the worst; to go from one of the most demanding markets in the NHL (unless you are Oilers management, it seems); and to do so while getting about a 1000% raise?

There is a risk that Penner folds like a cheap tent under the pressure. He just is not proven enough that I would trust throwing that kind of contract at him. This was yet another in a string of desperation moves by Lowe.

 
At 12:12 AM, July 28, 2007, Blogger danae said...

I'm with Keith. If I'm Burke, I'd take the picks and start lobbying for John Tavares to enter the 2008 draft. A suitable replacement for Penner can be had at less than $4M/yr and the Ducks will have some extra draft picks to barter with.

 
At 12:28 AM, July 28, 2007, Anonymous S said...

Why do some Oiler fans continue to cry about Pronger? Just deal with it.

And to clear it up for some of you who are a little slow, Burke's clearly stated that his main issue was the insane price tag Kevin Lowe put on Penner.

He's not worth it.

It has to do with the simple fact that jacking up the price distorts the entire market. Why do GMs around the league want to pay on potential? Too bad the NHL wasn't like the real world... I'd like to tell a future employer that I have tremendous potential and should start at six figures. It would be funny!

GMs like Kevin Lowe are going to drive the prices up so high for everyone. They're going to ruin the league... just wait until arbitration starts, since players use these signings to argue their cases.

Does anyone have any concept of the future, or do they always believe that the cap is going to increase? There's nothing like planning on spending money you might not have.

I say we round up all the GMs and make them take a Junior Achievement class. Since a lot of them have the ability to handle money like high schoolers, maybe it will be constructive?

 
At 9:22 PM, July 28, 2007, Blogger Nick said...

Anon

Maybe he is worth that much to the Oilers, who have far less going for them. He's definitely not worth that much to the Ducks, who'll walk away from this deal.

This isn't BS league ruining, this is how it's most likely going to be with a salary cap in place.

 

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