That is the cap hit savings. If you buyout his last year, his cap hit is $3,416,667 in 2020-21 and $1,166,667 in 2021-22 according to CapFriendly.
$5,750,000 current cap hit for 2020-21
($3,416,667) buyout cap hit for 2020-21
$2,333,333 in cap savings
($700,000) for roster replacement
$1,633,333 in net cap savings with replacement player over Steen's actual cap hit.
It just doesn't seem worth it to me.
Completing the similar math on Allen's contract, you would save $1,966,667 buying out Allen and having Husso in his place at $700K. The moral of the story is that contracts that pay less real dollars than cap hit in their final year(s) generally make the contract more palatable to non-cap teams to take on players, but less cap friendly (pun intended) when faced with a buyout. Something to keep in mind with these longer deals for guys like Faulk, Schenn and (potentially) Petro.