Why Ryan O’Reilly stands to take a pay cut in salary arbitration

O'Reilly

The list of players going to salary arbitration this summer came out over the weekend and a total of 23 either filed to go through the process or had their teams take them to arbitration. It’s an interesting process that, if nothing else, provides the motivation necessary to one or both sides to start negotiating seriously. That’s why only a handful of the 23 will actually end up going to the hearing process and even fewer, if any, will actually result in a decision being handed down by the arbitrator.

Some of the more interesting tidbits to come out of the filings – 20 of which were players taking their teams to arbitration and three teams taking the players to arbitration:

* One of the more interesting cases was that of the Colorado Avalanche electing to take Ryan O’Reilly to arbitration. One of the league’s biggest complaints about the arbitration process in the past was that players held all the cards and essentially had little to lose. But now that teams can take players to arbitration, the league can use the process as a means of bringing salaries down.

That’s definitely the case for O’Reilly, who had a career season with 28 goals and 64 points and won the Lady Byng Trophy after recording only two penalty minutes. The Avs are one of the worst possession teams in the NHL, but O’Reilly’s numbers are surprisingly good. He’s more likely to start in the defensive zone and end up in the offensive zone, something that really turns the cranks of the fancy stats crowd.

But the Avs obviously don’t believe O’Reilly is worth $6.5 million in salary and cap hit, which is what they would have been forced to give him for a qualifying offer. That’s because the offer sheet O’Reilly signed in 2012-13 with the Calgary Flames, which was matched by the Avalanche, called for a two-year deal with salaries of $3.5 million and $6.5 million. Qualifying offers are always based on the worth of the deal in the last year.

Under the terms of the collective bargaining agreement, O’Reilly’s salary and cap hit in arbitration can be reduced by a maximum of 15 percent, which would take it down to $5.525 million for this upcoming season. The most similar comparables for O’Reilly are Jordan Eberle of the Edmonton Oilers (who makes $6 million a season) and teammates Matt Duchene ($6 million) and Gabriel Landeskog ($5.6 million).

* A couple of names stand out on the list of players who are taking their teams to salary arbitration. Cameron Gaunce played only nine games for the Dallas Stars, but filed. As did Derek Grant, who played just 20 for the Ottawa Senators and Brandon McMillan, who appeared in 22 games for the Arizona (nee Phoenix) Coyotes.

None of those players has a prayer of getting a one-way deal in arbitration, and on the surface they don’t appear to be players who have much leverage. But they all stand a good chance of improving their minor league salaries. McMillan and Grant made just $65,000 in the American League this past season and Gaunce made $70,000. Their objective in arbitration is to get their minor league salaries up substantially from what they received in their qualifying offers.

* It’s difficult to fathom that the Montreal Canadiens would not elect for a two-year deal with star defenseman P.K. Subban when the two sides exchange their briefs later this month. But in what is essentially a game of high-stakes poker, the Canadiens might opt for one year.

That’s because even if Subban plays on a one-year deal this upcoming season, the Canadiens would have the option of taking him to arbitration next summer on another one-year deal that would take him to unrestricted free agency. So if Subban asks for and gets more than $7 million in arbitration, the Canadiens might want the leverage to take him to arbitration next summer to get that number down.