The Calgary Flames have reportedly signed Colorado Avalanche restricted free agent Ryan O'Reilly to an offer sheet worth $10 million over two seasons, according to TSN's Darren Dreger, who also provided a further breakdown of the yearly salary.
UPDATE: Thursday, February 28 at 9:32 p.m. ET by Nicholas Goss
Well, that didn't take long. The Colorado Avalanche have made the decision to keep Ryan O'Reilly just a few hours after he signed an offer sheet with the Calgary Flames. Expect the Avalanche to get him into the lineup as soon as possible.
Colorado Avalanche @Avalanche
BREAKING: @Avalanche announced tonight that the team has matched the Calgary Flames’ offer sheet for forward Ryan O’Reilly. More to follow..3/1/2013, 2:19:23 AM
---End of Update---
Darren Dreger @DarrenDreger
Breaking: Told thhe Flames have filed an offer sheet on Ryan O'Reilly. #TSN2/28/2013, 10:28:16 PM
Darren Dreger @DarrenDreger
O'Reilly details more clearly: 2 yrs .. 5M AAV ... 1m salary this year and 2.5 SB ... 6.5M salary next year.2/28/2013, 10:31:54 PM
Chris Johnston @reporterchris
Ryan O'Reilly has signed the #flames offer sheet. Compensation to #avs is a first- and third-round pick if they don't match.2/28/2013, 10:39:39 PM
Bob McKenzie @TSNBobMcKenzie
COL has 7 days to match the offer or accept compensation of CGY's 1st round pick and CGY's 3rd round pick.2/28/2013, 10:45:29 PM
Bob McKenzie @TSNBobMcKenzie
If COL matches the offer, COL cannot trade O'Reilly for one calendar year from day it matches the offer.2/28/2013, 10:46:30 PM
Ironically, the Flames are in Denver tonight to play the Avalanche in an important Western Conference matchup.
Let's look at what this move means for both teams, and determine if the Avalanche should match the offer sheet.
What this Offer Sheet Means to the Flames
This is a very aggressive move by Flames general manager Jay Feaster. He has a lot of roster decisions to ponder before the April 3 trade deadline passes, including the futures of captain Jarome Iginla (UFA this summer) and star goaltender Miikka Kiprusoff (UFA in 2014).
Calgary has won two of its last three games and the team is just three points away from a playoff spot in the Western Conference. This move proves that the franchise is serious about ending its three-year playoff drought this season, which could mean that the chances of Iginla being traded before the deadline are very slim.
The Flames do not have a proven NHL star to build around for the post-Jarome Iginla era, and O'Reilly can certainly be this type of player. He's a future No. 1 center who plays exceptional defense and has a rapidly improving offensive skill set.
After letting veteran center Olli Jokinen walk in free agency last summer, the Flames did not find a suitable replacement for his spot on the top line.
O'Reilly's fantastic two-way game would make him a great fit in the team's No. 1 center role. He led the NHL in takeaways last season and also posted career highs in goals (18), assists (37), points (55) and shots (189) in 81 games.
The Flames have the eighth-oldest roster in the NHL (per QuantHockey), and the team doesn't have any young emerging stars. Sven Baertschi is arguably the team's top prospect, but the 20-year-old winger is scoreless in seven games for the Flames this season and has spent most of 2013 with the Abbotsford Heat of the AHL.
This franchise has not embraced a full rebuild over the last few years. The Flames have decided to take shortcuts instead by overpaying for veteran free agents such as Dennis Wideman and Jiri Hudler.
Even if they are successful in signing O'Reilly and lose a first- and third-round pick, the Flames can still undergo a proper rebuild in the near future. As a 22-year-old star with three years of NHL experience, O'Reilly's future is just as bright as a lot of the players who will likely be selected with the top 20 picks in the 2013 NHL Draft.
Adding a young center like O'Reilly to their lineup would help the Flames win games now and well into the future. This offer sheet does have some risk involved, but the upside is tremendous because of O'Reilly's enormous talent.
What this Offer Sheet Means for the Avalanche
Colorado has mishandled this lengthy process with O'Reilly right from the end of the lockout. If the Avalanche decided to trade their star center before this point in the season, it's likely that the return package would have been far greater than a first- and third-round pick.
However, the Flames are not a very good team, so if the Avalanche let O'Reilly go to Calgary and take the draft picks, there's a strong chance that the first rounder could be a lottery pick, and maybe even a top 10 selection.
The upcoming draft class is one of the deepest in years and full of high-end talent, so if there is a year to take a first-round pick from an offer sheet, it's 2013.
If the Avalanche miss the playoffs, which is likely because they are not playing well and currently sit in 14th place in the standings, the team could have two lottery picks in the next draft. This would give general manager Greg Sherman a lot of the flexibility at the draft if he wants to trade one of the picks for an NHL-caliber player.
Another concern for the Avalanche to think about when deciding whether or not to match this offer sheet is locker room chemistry. Why would Colorado want to bring O'Reilly back when he has essentially quit on his team for the first half of the season by putting his selfish contract demands above what's best for the team?
If Sherman matches this offer sheet, and O'Reilly isn't welcomed back by his teammates and there are issues in the locker room, he won't be able to fix the problem by trading O'Reilly because offer sheet rules force teams to wait an entire year before they can trade players signed to offer sheets. That's not a situation the Avalanche will want to be in.
The real problem with this offer sheet from Colorado's perspective is O'Reilly's year-two salary of $6.5 million.
This means that his qualifying offer after this contract expires will be $6.5 million, which diminishes his trade value because it's unlikely that a team will acquire O'Reilly and be forced to pay him that kind of money because he's not a $6.5 million player at this stage of his career.
If the Avalanche felt that O'Reilly was worth anywhere near $6.5 million, they probably would have re-signed him a long time ago.
This is a bad offer sheet for the Avalanche to accept, especially for financial reasons, so the best option is to take the picks and hope that the Flames fail to make the playoffs. Having two lottery picks for this draft would not be a terrible situation for Colorado.
Don't expect the Avalanche to make a quick decision if they want to decline the offer sheet. Colorado might as well make O'Reilly wait six days and 23 hours before he can begin his Flames career.
Nicholas Goss is an NHL Lead Writer at Bleacher Report. Follow him on Twitter. He was a credentialed reporter at the 2011 Stanley Cup Final and 2012 NHL playoffs. All salary information courtesy of Capgeek.