What to do with the $8 million man
What to do with the $8 million man(2010-12-22 13:03 posted by B. La Rose)

He is the highest paid player in franchise history and despite his recent success, Scott Gomez's overall performance simply does not justify the high salary and cap hit that he is currently receiving.  So what can be done about it?  Would it be best to simply cut bait as soon as possible, or hold out hope that his recent play becomes the norm?

Prior to now, there were many who were in favour of simply waiving Gomez and farming him out to  Hamilton.  This clearly won't be happening either.  The Habs showed resistance before finally sending Dustin Boyd to the Bulldogs and that was only after he had cleared waivers twice.  We can sit here and say all we want about how the Habs are a money machine - they were listed at #3 overall in the most recent Forbes rankings

However, the owners (including the minority partners) aren't exactly growing money on trees.  If they are, it's going to pay off the multitude of loans that were required to finalize the transaction, not to mention the interest associated with said loans.  In fact, it was revealed earlier this week that the owners just paid off their $75 million loan from the Quebec government.  Long story short, given that coupled with their hesitance to send pay Boyd a 1-way salary in the AHL, they won't be willing to pay Gomez's $8 million salary plus that of a replacement player...or more.

A trade at this time is most certainly out of the question as well because of his contract and cap hit.  It will take a full season at his recent production levels since teaming up with Max Pacioretty and Brian Gionta before anyone would even sniff at relieving Montreal of their biggest financial burden.  And in Gomez's defence, he does bring a lot of positive elements to the Habs' lineup, speed, playmaking abilities, and, from what we've heard at least, a good locker room presence.  This certainly isn't enough to justify his contract, but he's clearly no slouch either. 

There is, of course, one other option that could be considered should Gomez revert back to his early season struggles, the buyout.  However, Gomez's contract is heavily front loaded which is very buyout prohibitive in terms of using it to save on the cap.  To show exactly what I mean, here are the cap hits over each of the next 6 seasons if Montreal opted to buy him out this offseason:

Buyout at the end of 2010-11:

Year Salary Old Cap Hit Buyout Cost Savings New Cap Hit
11-12 $7,500,000 $7,357,143 $1,944,444 $5,555,556 $1,801,587
12-13 $5,500,000 $7,357,143 $1,944,444 $3,555,556 $3,801,587
13-14 $4,500,000 $7,357,143 $1,944,444 $2,555,556 $4,801,587
14-15 N/A $0 $1,944,444 -$1,944,444 $1,944,444
15-16 N/A $0 $1,944,444 -$1,944,444 $1,944,444
16-17 N/A $0 $1,944,444 -$1,944,444 $1,944,444

Notes:
Buyout cost: ($17,500,000 x 2/3) spread out over 6 years
New Cap Hit = Old Cap Hit - Savings

Next season, it's not too bad, a cap hit below $2 million.  This is because his salary exceeds his full season cap hit.  The next two years are a bit painful though, combining for over $8.6 million...when Gomez's salary over that span is 'only' $10 million.  And of course, since a buyout is spread over double the length, there's a cap charge of nearly $2 million over that span.  Not particularly ideal, is it?  Looking at the numbers if they bought him out after next season, they're not much better either.

Buyout at the end of 2011-12:

Year Salary Old Cap Hit Buyout Cost Savings New Cap Hit
12-13 $5,500,000 $7,357,143 $1,666,667 $3,833,333 $3,523,810
13-14 $4,500,000 $7,357,143 $1,666,667 $2,833,333 $4,523,810
14-15 N/A $0 $1,666,667 -$1,666,667 $1,666,667
15-16 N/A $0 $1,666,667 -$1,666,667 $1,666,667

Note:  Buyout cost: ($6,666,667 x 2/3) spread out over 4 years

As was the case if they were to buy him out after this season, his cap hit over the first two seasons of the buyout is not even $2 million lower than his combined salary, though the cap hit each year does drop.  For the sake of being detailed, a buyout prior to the final year of his contract would yield cap hits of $4,357,143 and $1.5 million.  With those numbers in mind, it's pretty safe to conclude that a buyout will not be on the horizon any time soon.

However, for those simply wishing that Gomez and his contract would simply go away, all hope may not be lost.  As I've said before, when his salary dips below his cap hit, there is some artificial value created for small market teams who need to get to the cap floor but don't want to spend the physical dollars required to get there.  Obviously, Montreal couldn't command much value wise but would have a bit of an easier time if they simply wanted to dispose of the contract, though there surely will be other teams looking to do the same with their bloated deals. 

So what can be said from all of this?  For those of you looking to buy a Hab jersey this holiday season and want to make sure whoever's name on it will be there for a while, Scott Gomez is a safe one to buy.  He's going to be around for a while yet.



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