A look at how the Leafs could afford to take on Erik Karlsson with minimal salary retention

First, it warrants mentioning that San Jose Sharks GM Mike Grier has no desire to retain 50% on Karlsson's $11.5M salary for the next 4 years. The maximum that the Sharks appear to be willing to retain at this point is 20%, which would drop Karlsson's AAV down to $9.2M were he to be traded at 20% retention.

Obviously, with the Leafs currently more than $8.8M over the cap with Ilya Samsonov's arbitration award not yet factored in, it seems nearly impossible for the Leafs to accommodate another massive salary, like Karlsson at $9.2M. But is it really impossible? No. It's very possible, but I'm sure many Leaf fans won't like what it would mean for the team.

Let's assume for a second that Samsonov's arbitration award is $4M. Once the Leafs buy out Matt Murray, they'll free up the $4M necessary to sign Samsonov, so we can call that a wash. That would mean that the Leafs would remain $8.8M over the cap. Once you subtract Jake Muzzin's $5.625M cap hit and place him on LTIR, that leaves the Buds over the cap by ~$3.175M. Then we can subtract Dylan Gambrell's $775K, as he'll likely be in the AHL next season. That leaves the Buds around $2.4M over the cap with 13 forwards and 7 defensemen on the roster.

To me, there appears to be only two defensemen that the Leafs can afford to move; Conor Timmins or T.J. Brodie. Treliving has no previous attachment to Timmins, who was extended by Kyle Dubas earlier this year. He also famously walked away from T.J. Brodie in Calgary and sent the veteran blueliner to unrestricted free agency, so I don't think he's overly concerned with retaining Brodie if he has the chance to upgrade, in his mind.

Timmins carries a $1.1M cap hit for the next two seasons, while Brodie carries a $5M cap hit next season. Moving Brodie for picks and/or prospects would make the Leafs cap compliant with $2.6M in cap space, carrying 13 forwards and 6 defensemen. Brodie does have a modified no-trade clause and owns a 10-team no-trade list, but I don't think the Leafs would have a problem finding a dance partner for one of the best defensive defensemen in the game with just 1 season remaining on his deal.

With that $2.6M in cap space, the Leafs would only need to open up an additional $6.6M in order to be able to accommodate Erik Karlsson at $9.2M per season for the next 4 seasons. I think you can see where this is going.

William Nylander seems to have dug his heels in and appears unwilling to budge off of his astronomical $10M+ ask from the Leafs on a contract extension. He also happens to carry a $6.96M cap hit next season. If the Leafs can facilitate a sign and trade, similar to what Treliving did last year with Matthew Tkachuk in Calgary, perhaps they can send Nylander with an 8-year extension to another club for a package that includes pieces they can use to help them acquire Karlsson.

Tkachuk brought back Jonathan Huberdeau, MacKenzie Weegar, a 1st round pick and a prospect, but that was for Matthew Tkachuk. Nylander is not Matthew Tkachuk. That said, he still carries significant value as a premier scoring winger with a 40-goal campaign under his belt. If the Leafs wanted to pursue a deal consisting mostly of futures for Nylander, they can then flip those pieces to San Jose to acquire Karlsson. This would leave the Leafs with $360K in cap space with a roster that looks something like this:

Knies-Matthews-Bertuzzi
Domi-Tavares-Marner
Jarnkrok-Kampf-Lafferty
Robertson-Holmberg-Reaves

Rielly-Karlsson
McCabe-Klingberg
Giordano-Liljegren
Extra: Timmins

Samsonov
Woll

Again - this is all purely hypothetical. I don't suspect that the Leafs are in any way the frontrunner for Karlsson's services. This is just to show that it is theoretically possible, if the Leafs wanted to go that route. Also, if Treliving could convince Grier to eat some additional salary on Karlsson, it would leave the Buds with some additional cap space. Moving Jarnkrok's $2.1M for the next 3 years and replacing him with another prospect in the system, like Bobby McMann, who is believed to be NHL-ready, also gives the Leafs some additional flexibility.

We'll have to wait and see how this all unfolds, but the Leafs certainly have options here and can create a significant amount of cap space to accommodate a blockbuster deal if they feel they that that's a route they'd like to go.