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Evaluating O'Reilly fallout for Avs, Flames

Ryan O'Reilly will be back on the ice for the Avs, but at what cost? And for how long? Chris Humphreys/US Presswire

Well, that was one way to go about doing it.

On the day that Ryan O'Reilly signed a two-year offer sheet worth $10 million with the Flames, one that was matched within hours by the Avalanche, Colorado GM Greg Sherman spoke of the mission being accomplished.

"This was a goal of ours from the onset: to get Ryan signed," Sherman said during a news conference on Thursday. "Now we move forward as a hockey club."

Ignoring for a moment that O'Reilly's salary climbs to $6.5 million next season and that becomes the potential qualifying offer for him when this deal is up, Thursday's news isn't the worst outcome for the Avalanche. Just imagine the alternatives.

Had they traded him, especially to a contender, O'Reilly just gave future restricted free agents in Colorado the playbook out of town. Hold out and you're rewarded with a spot on a better team.

Had they given in earlier and signed him to a deal higher than Matt Duchene's without an offer sheet, it would have driven up the price of every future RFA negotiation in Colorado. It would have been a bad precedent to set as an organization.

And had they let him leave for Calgary, they would have looked vulnerable to future offer sheets from other NHL teams. Not to mention the impression it would have given to their paying customers.

"What are you telling those fans if you don't [match]?" one NHL source said Thursday night.

It wasn't tidy, but it's not the worst solution for the Avalanche.

"That was our goal. That goal has never changed," Sherman said. "Sometimes the process takes a little longer than you would expect or would want."

As for the Flames, you have to appreciate Jay Feaster's aggressiveness in trying to improve his team. Calgary is four points outside a playoff spot. Adding a two-way center like O'Reilly would have improved their chances of finally breaking through into the top eight. It also would have given them a young center to build around moving forward, something the organization needs. Bob Hartley is the kind of coach who would have helped continue O'Reilly's growth as a player. Marc Savard was always quick to credit Hartley for the job he did turning him into one of the game's best playmakers during their time together in Atlanta.

But Colorado's quick decision to match invites questions into Calgary strategy. In my opinion, the Flames made two mistakes in this pursuit.

The first was the length of the deal. Two years is a harder match for Colorado than something longer term like four or five, but an even tougher offer sheet to match would have been a one-year deal with a $1 million salary and $5 million signing bonus. The penny-counting Avalanche would have had a harder time matching a deal that came with a huge signing bonus to pay immediately that also didn't provide another year before contract negotiations opened up again.

In theory, O'Reilly could have immediately started the holdout all over again in Colorado after this season if it matched that offer sheet, and it might not be a headache worth revisiting. At least now, Colorado has options moving forward in the second year.

Which brings us to the second problem.

In matching this offer sheet, Colorado can't trade O'Reilly for one year, which puts up a trading freeze that ends Feb. 28, 2014. Assuming NHL players compete in the Olympic games in Sochi, and every indication suggests they will, the trade deadline may be a little later than normal.

In 2010, when the Olympics were in Vancouver, the trade deadline was March 3, which is a reasonable prediction for next season. That gives the Avalanche a small window in which to trade O'Reilly if they find his salary too prohibitive moving forward. That was the prediction of one NHL source, according to colleague Pierre LeBrun.

"I bet you they move him as soon as they're allowed to," he told LeBrun.

It raises the question: Why do the offer sheet now?

If the Flames really believed the two-year offer was the best way to land O'Reilly, the better move might have been to wait another week or 10 days to get safely outside that trading window, giving the Avalanche even less flexibility if they matched.

Instead, Sherman now has the player he wanted signed under contract and can still deal him in a year when that qualifying offer looms. It made it a fairly easy decision for Colorado.

Now come potential consequences for Feaster and the Flames. (Though as bad as those could be, it may have been even worse if the Flames had landed O'Reilly, reports Chris Johnston.) One team executive theorized that nobody gave P.K. Subban an offer sheet because general managers didn't want to make an enemy out of the deep-pocketed Canadiens.

The second-best quote I ever got from Kings GM Dean Lombardi came back in 2008 when I asked him if he was concerned about whether teams would sign Anze Kopitar or Jack Johnson to offer sheets. He promised a war if they did.

"We're not only going to match any offer sheet, we'll have enough space to go after your guys. Go ahead and make our day. If you sign our guy, we're coming back with both barrels firing," Lombardi told me at the time. "You'd better be damn straight that you have the cap space and all your guys are signed."

On the bright side (I guess?), Feaster doesn't have any obvious young players who will soon be restricted free agents that the Avalanche should target in retribution. And on Thursday, Sherman didn't sound like he harbored much public resentment toward the Flames.

"Calgary made a decision to use the rights they had to put forth an offer sheet," Sherman said. "If that's the way they want to do their business, that's their right."

If he's not upset, no doubt some NHL general managers are. The second contract was a point of contention for teams during these last CBA negotiations, and we saw how hard the Canadiens and Rangers worked to limit Subban and Michael Del Zotto to a bridge contract.

I won't fault Feaster for trying to improve his team, because that's his primary concern, but there wasn't any doubt among the people I spoke with in the couple hours after the offer sheet was announced that the Avalanche would match. That was consistent with the opinions of general managers over the past month.

"They've got the money," one GM said of Colorado a couple weeks ago.

When another team executive was asked in theory how O'Reilly would improve the Flames, he wouldn't even consider it on Thursday.

"It doesn't matter," he said. "Colorado is going to match."

There wasn't a moment of hesitation or doubt. He pointed out that Dustin Penner was the last restricted free agent to leave his team on an offer sheet.

"O'Reilly is a better player than Penner," he said.

Another NHL source called the offer sheet futile. The reality is, teams almost always match.

Now agents will have a favorable comparable to bring to future arbitrations. A 55-point scorer worth $6.5 million -- that's pretty good.

The O'Reilly contract will be argued by teams as an outlier, but there's still concern as to what it will mean to future negotiations for players coming off their entry level deal. Said one source: "It elevates everyone."

That's the risk that comes with chasing a restricted free agent.