We have reached the first of July, which signifies the start of the first buyout period for NHL general managers. Teams have until 5 PM ET on July 12 to make their buyout decisions, the day before the start of free agency.
For the New York Islanders, they need to create as much available cap space as possible, but there won’t be any relief from buyouts. When you buy out a contract, you double the life of the contract while cutting the average annual value depending on the age of the player.
Here are the rules courtesy of Puck Pedia:
For players that are 26 or older, a buyout is 2/3 of the remaining salary owed on the contract.
For players that are under 26, a buyout is 1/3 of the remaining salary owed on the contract.
The Islanders have not bought out a contract since the remaining eight years of netminder Rick DiPietro’s 16-year contract was bought out back in the summer of 2013. He is still being paid $1.5 million annually until the end of the 2028-29 season.
DiPietro’s buyout still stands as the longest buyout in NHL history.
New York Islanders general manager Lou Lamoriello has a few contracts that they COULD buy out just due to term. You have Kyle Palmieri, who had a horrendous first half of the 2021-22 season but played more to the level expected in the second half. He is owed $5 million annually over the next three seasons. At 31 years old, a buyout of his contract would make the life of his contract six years, with an annual cap hit of $1.667, saving the Islander $3.33 million.
But you never want to be buying a player out just a year after signing him to a four-year deal. It’s not only a bad look for the organization but also, given how the Islander system affects newcomers, one tough year in a hectic season, is not grounds for contract termination.
Jean-Gabriel Pageau, who struggled this past season, is owed $5 million in each of the next four years. His buyout would save the Islanders $3.12 million.
Those would be the only two WORTH buying out, again, not that the Islanders will be going this route at all.
The biggest way the New York Islanders are going to save money and given themselves the best chance at landing free agents is by making hockey trades and moving undesirable contracts.