Salary Cap Laundering - How the Leafs Can Help Out in the Ryan O'Reilly Trade

(Disclaimer: The following is an examination of how a team like the Leafs can be involved in a potential Ryan O'Reilly trade. If you hate the Leafs, or think that Buffalo would never make a trade with them, or have an issue with the prices set, just sub in the team/price/asset that makes you happiest and pay attention to the basic idea. And that idea is that finding ways to screw the salary cap is both fun and a moral duty of every NHL team.)

The tank-era Buffalo Sabres are now one for five in the NHL draft lottery, and that means it's time for rebuild number two. The franchise is looking to get rid of anything not nailed down to an $80 million contract, and number one on the chopping block appears to be defensive centerman and (alleged) drive-thru patron Ryan O'Reilly. According to Bob McKenzie, the 27 year-old would garner interest from a number of teams looking for help at center, notably the Carolina Hurricanes.

The hitch is O'Reilly's substantial contract, which runs for five more seasons at an AAV of $7.5 million. In particular, his actual salary next season is $8.5 million, which the Hurricanes new "disruptive" owner Tom Dundon may not be so keen on paying, especially when $7.5 million of that comes in the form of a single Canada day gift.

As McKenzie said on the May 17th edition of the Bobcast:

"So O'Reilly next season is scheduled to make $8.5 million, but $7.5 million of it is due as a signing bonus on July 1. And I would say trust me on this one: I don't think the Carolina Hurricanes are too eager to jump into a deal where they have to shell out $7.5 million to Ryan O'Reilly on July 1. But that would appear to be the price of poker, as they like to say."

The Pegulas may be free with their fracking money when it comes to building a winner, but they may not be so keen to shell out their SuperPac money on a guy who will be playing against them. So Carolina is desperate to buy, and Buffalo is desperate to sell, and nobody wants to pay. How can this situation be resolved without forcing O'Reilly to spend another season playing for the Sabres and posing a continuing danger to upstate New York's Tim Hortons locations?

Enter the Toronto Maple Leafs, their infinite supply of cash, and everything I learned about money laundering from watching that Jason Batemen show about money laundering.

Really not sure about Scotiabank's name change for the ACC

The Maple Leafs can solve Buffalo and Carolina's little money dispute, for a small commission of course, by taking advantage of the last good cap loophole available under the CBA - the signing bonus. To briefly summarize, if a team trades a player after they've already paid his signing bonus on July 1, they lose the money but the player's bonus is reflected entirely in the salary cap of the receiving team - making it the perfect tool for trades between budget-conscious and cap-conscious teams. It's one the Leafs have exploited before, taking on $2 million of Jonathan Bernier's salary in 2016 before sending him to the Anaheim Ducks, who happily absorbed the full $4.1 million cap hit and counted their savings. It's also something the team clearly intends on attempting to do in the near future to get rid of troublesome contracts like Matt Martin and Year Three of Patrick Marleau.

What the Leafs have yet to do is act as a laundering service for a trade between two other teams, although the Vegas Golden Knights did something similar this year in the Derrick Brassard trade. In exchange for Ryan Reaves and a 4th round pick (as well as keeping Brassard out of Winnipeg), the Knights let Brassard pass through their books on his way from Ottawa to Pittsburgh, while retaining 40% of his salary. This allowed Pittsburgh to fit him under the cap, without making Ottawa spend any extra money.

The idea here would be for the Leafs to do the exact same thing, only while taking advantage of the signing bonus loophole at the same time. Let's assume that, at full $8.5 million salary, the price for O'Reilly for Carolina would be Victor Rask, Julien Gauthier, and a 2nd round pick (I don't know or care how realistic that price actually is). Let's further assume that if Buffalo were willing to pay O'Reilly's signing bonus, the price would be to add a 2nd and a 3rd round pick. If Buffalo preferred not to pay an extra $7.5 million, they could send O'Reilly through Toronto on July 1, who would pay his signing bonus before sending him off to Carolina.

Here's how the trade could play out:

June 30th: Buffalo trades Ryan O'Reilly to Toronto for Toronto's 2019 7th round pick

July 1: Toronto pays $7.5 million signing bonus to O'Reilly

July 2: Toronto sends O'Reilly to Carolina for Carolina's 2020 2nd round pick, 2020 7th round pick, and 2019 3rd round pick.

July 2: Carolina sends Victor Rask, Julien Gauthier, and Carolina's 2019 2nd round pick to Buffalo for Toronto's 2019 7th round pick

July 2: Carolina sends Toronto's 2019 7th round pick for Carolina's 2020 7th round pick

Conclusion

As I've said, if you hate the Leafs or hate the prices I've set, play around with the trade values and the teams as much as you want, but the point is there is nothing to stop a team willing to pay extra money from functioning as a waystation for a player with a sizeable signing bonus. And while the league may not love the idea, it has allowed both the signing bonus loophole and the third-team salary retention before, so there would be no rule to stop such a transaction.

This is a league where teams willing to be bold and creative come out on top, and the Leafs can benefit from doing both, while proving that you can launder assets without moving to the Ozarks or being needlessly dark and boring.