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Report: Avs may file for arbitration against O’Reilly (Update: They have)

Jun 15, 2014, 6:09 PM EDT

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After playing things cool the past two seasons, relations between the Colorado Avalanche and forward Ryan O’Reilly may be about to get heated up again.

TSN’s Bob McKenzie reports the Avs may file for club-elected salary arbitration on O’Reilly, a restricted free agent. Two seasons ago, the two sides butted heads on a contract until the Calgary Flames signed O’Reilly to a two-year, $10 million offer sheet the Avs quickly matched.

This time around, things could get a bit hairy for Colorado if they go down this road with O’Reilly.

In order for Colorado to retain his rights to negotiate with him, they have to make a $6.5 million qualifying offer to him. The Avs could negotiate a long-term deal with him or they can take him to arbitration. As McKenzie noted, the latter choice isn’t made very often and if O’Reilly agrees to go to arbitration, he can pick a one or two-year award.

At worst for O’Reilly, the arbitrator could side with the Avs and award him an amount lower than $6.5 million. The worst that can be is 85-percent of that total ($5.525 million). Still a good haul but not what he could’ve gotten had the Avs just qualified him.

On the other hand, O’Reilly could win his case and the Avs could be on the hook for a cap hit exceeding $7 million for one or two years. It’d be tough for the Avs to make a case against a guy who had 28 goals and 64 points last season while playing a strong two-way game.

Things didn’t go well when the two tried to work out a deal two years ago and going through this sort of rigmarole again could lead to a holdout or a trade demand.

Update (6:12 p.m. ET): Right after posting this, the Avs have indeed filed for arbitration.

This doesn’t have to have a dire ending for either side. An arbitration hearing is the last straw, but they can get a deal worked out before a hearing even happens. Going this route just provides some closure in some way, although O’Reilly can still be signed to an offer sheet between July 1-5. That wasn’t the case under the old CBA.

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