Speculation: 2024-25 - Free Agency/Trade Thread

[Gliff]

They already leverage their $$ by structuring contracts with front loaded signing bonuses/salaries. It is not different - they confer a cap compliant benefit on the player while reducing the AAV.

They've literally done this with all of their "premium" players:

Auston Matthews | 4yrs x 13.250M (TOR)

Auston Matthews signed a 4 year, $53,000,000 contract with the Toronto Maple Leafs on Aug. 23, 2023. The contract has a cap hit of $13,250,000.

capwages.com

William Nylander | 8yrs x 11.500M (TOR)

William Nylander signed a 8 year, $92,000,000 contract with the Toronto Maple Leafs on Jan. 8, 2024. The contract has a cap hit of $11,500,000.

capwages.com

John Tavares | 7yrs x 11.000M (TOR)

John Tavares signed a 7 year, $77,000,000 contract with the Toronto Maple Leafs on Jul. 1, 2018. The contract has a cap hit of $11,000,000.

capwages.com

Mitch Marner | 6yrs x 10.893M (TOR)

Mitchell Marner signed a 6 year, $65,408,000 contract with the Toronto Maple Leafs on Sep. 13, 2019. The contract has a cap hit of $10,903,000.

capwages.com

Morgan Rielly | 8yrs x 7.500M (TOR)

Morgan Rielly signed a 8 year, $60,000,000 contract with the Toronto Maple Leafs on Oct. 29, 2021. The contract has a cap hit of $7,500,000.

capwages.com

Jake McCabe | 5yrs x 4.492M (TOR)

Jake McCabe signed a five-year, $23.5 million extension with the Toronto Maple Leafs. The contract includes deferred money and signing bonuses in the first four years.

capwages.com

Signing bonuses don’t reduce cap like this… that’s the difference.

 

[Ducks DVM]

Not really. Vatrano agreed he was worth $4.57M per year for the next 3 years. He took some pay in deferred compensation ($1.57M/year) that will grow in value over time via an annuity like anyone can purchase. The Ducks cap hit is exactly what it would be if he signed without differed compensation. Without differed compensation he isn't signing for 3x$6M, he's signing for 3x$4.57M.

If the leafs want to sign Marner to a similar deal they will have to sign him to a contract that will have a $14M cap hit (appx) because that's his appx market value today. If he chooses to defer some of it he will get more dollars in the future based on what his annuity purchased today will return to him down the road. But the leafs don't end up with more cap space.

Vatrano would have been a 6M cap hit if he got all the money now. He possibly could have gotten that if he stays on a productive streak with Terry. You get 3-5 players willing to do that and you can potentially stack your team up. It doesn’t have to be the stars. OR it can be the stars, it just allows you to give them more money they can cash in somewhere with lower taxes for a lower tax hit.

 

[Ducks DVM]

They already leverage their $$ by structuring contracts with front loaded signing bonuses/salaries. It is not different - they confer a cap compliant benefit on the player while reducing the AAV.

They've literally done this with all of their "premium" players:

Auston Matthews | 4yrs x 13.250M (TOR)

Auston Matthews signed a 4 year, $53,000,000 contract with the Toronto Maple Leafs on Aug. 23, 2023. The contract has a cap hit of $13,250,000.

capwages.com

William Nylander | 8yrs x 11.500M (TOR)

William Nylander signed a 8 year, $92,000,000 contract with the Toronto Maple Leafs on Jan. 8, 2024. The contract has a cap hit of $11,500,000.

capwages.com

John Tavares | 7yrs x 11.000M (TOR)

John Tavares signed a 7 year, $77,000,000 contract with the Toronto Maple Leafs on Jul. 1, 2018. The contract has a cap hit of $11,000,000.

capwages.com

Mitch Marner | 6yrs x 10.893M (TOR)

Mitchell Marner signed a 6 year, $65,408,000 contract with the Toronto Maple Leafs on Sep. 13, 2019. The contract has a cap hit of $10,903,000.

capwages.com

Morgan Rielly | 8yrs x 7.500M (TOR)

Morgan Rielly signed a 8 year, $60,000,000 contract with the Toronto Maple Leafs on Oct. 29, 2021. The contract has a cap hit of $7,500,000.

capwages.com

Jake McCabe | 5yrs x 4.492M (TOR)

Jake McCabe signed a five-year, $23.5 million extension with the Toronto Maple Leafs. The contract includes deferred money and signing bonuses in the first four years.

capwages.com

They can, and at some point will at a minimum try, to do both.

 

[Hey234]

Looking at the teams at the bottom of the standings at this point in the season, there's not much in the way of an available impact forwards. Chicago & San Jose have already sold the team, and there's nothing there a available. Seattle, Rangers, Red Wings, and Islanders don't have any players who fit team need who they would actually trade. Everyone else above the Ducks isn't selling yet.

It still leaves Buffalo as the only team, IMO, with multiple players who fit team need, and who may be desperate enough to blow up the team. Realistically though, it seems likely the Ducks will likely have to find a high end forward in the summer.

 

[Hockey Duckie]

Looking at the teams at the bottom of the standings at this point in the season, there's not much in the way of an available impact forwards. Chicago & San Jose have already sold the team, and there's nothing there a available. Seattle, Rangers, Red Wings, and Islanders don't have any players who fit team need who they would actually trade. Everyone else above the Ducks isn't selling yet.

It still leaves Buffalo as the only team, IMO, with multiple players who fit team need, and who may be desperate enough to blow up the team. Realistically though, it seems likely the Ducks will likely have to find a high end forward in the summer.

If we're looking at the long game and not in a rush, then waiting for the summer and snagging a Rantanen would be better than throwing youths in the NHL assets at the TDL.

 

[duckpuck]

Signing bonuses don’t reduce cap like this… that’s the difference.

Yes - front loading a contract with signing bonuses does in effect reduce the AAV by virtue of the averaging of the years and the time value of money. And by paying the $$ earlier, the player is conferred a benefit that is not reflected in the cap.

Which of the following 5 year cash flows would you want:

Example 1: 12M, $10M, $8M, $5M, and $5M for a total of $40M

or

Example 2: $8M, 8M, 8M, 8M, and 8M for a total of $40M?

Both contracts have the same cap hit of $8M a year. Which deal is better for the player? Obviously Example 1 because of the time value of money. Toronto has used the Example 1 approach on all of their major deals.

On a related note, the first approach also makes it easier to trade the player toward the end of the deal, because the AAV is higher than the actual cash (e.g., Trouba). It makes the player attractive to a team looking to meet the cap minimum.

They can, and at some point will at a minimum try, to do both.

I hope you're right. Historically the ducks have not played the Toronto game and resisted large signing bonuses. It is probably one of the reasons they could not resign Hampus Lindholm, who got a frontloaded deal from Boston.

 

[Gliff]

Yes - front loading a contract with signing bonuses does in effect reduce the AAV by virtue of the averaging of the years and the time value of money. And by paying the $$ earlier, the player is conferred a benefit that is not reflected in the cap.

Which of the following 5 year cash flows would you want:

Example 1: 12M, $10M, $8M, $5M, and $5M for a total of $40M

or

Example 2: $8M, 8M, 8M, 8M, and 8M for a total of $40M?

Both contracts have the same cap hit of $8M a year. Which deal is better for the player? Obviously Example 1 because of the time value of money. Toronto has used the Example 1 approach on all of their major deals.

On a related note, the first approach also makes it easier to trade the player toward the end of the deal, because the AAV is higher than the actual cash (e.g., Trouba). It makes the player attractive to a team looking to meet the cap minimum.




I hope you're right. Historically the ducks have not played the Toronto game and resisted large signing bonuses. It is probably one of the reasons they could not resign Hampus Lindholm, who got a frontloaded deal from Boston.

That’s not reducing the cap lol. Both of those carry the same cap hit.

Deferring money ACTUALLY reduces the cap hit of a contract.

I don’t understand what you are not getting about this. Signing bonuses or front loading obviously makes the contract more appealing to the player, but it doesn’t lower the cap.

 

[All Mighty]

That’s not reducing the cap lol. Both of those carry the same cap hit.

Deferring money ACTUALLY reduces the cap hit of a contract.

I don’t understand what you are not getting about this. Signing bonuses or front loading obviously makes the contract more appealing to the player, but it doesn’t lower the cap.

I could be wrong, but what I think he’s trying to say is that a player would prefer (as an example) $10M as a signing bonus rather than $10.5M in salary that’s paid throughout the year. So essentially that would be reducing the cap by $500K. I didn’t bother to do any math so those numbers might not be comparable in present value, but I think that’s the point he was trying to make.

 

[Gliff]

I could be wrong, but what I think he’s trying to say is that a player would prefer (as an example) $10M as a signing bonus rather than $10.5M in salary that’s paid throughout the year. So essentially that would be reducing the cap by $500K. I didn’t bother to do any math so those numbers might not be comparable in present value, but I think that’s the point he was trying to make.

Sure, but that isnt reducing the cap its reducing the salary which reduces the cap.

Deferred salary is the only way have the cap be less then the salary divided by the number of years.

 

[JAHV]

Sure, but that isnt reducing the cap its reducing the salary which reduces the cap.

Deferred salary is the only way have the cap be less then the salary divided by the number of years.

Front-loading a contract is, in a way, reducing the cap hit. Given the time value of money, the front-loaded contract represents an increase in real dollars the player will get the benefit of, depending on how the player invests and his rate of return. A modest rate of return in the above scenario leads to a 2% increase in income for the front-loaded deal.

But the cap hit stays the same.

 

[Vipers31]

Sure, but that isnt reducing the cap its reducing the salary which reduces the cap.

Deferred salary is the only way have the cap be less then the salary divided by the number of years.

You can’t really look at a deferred payment as „the salary“ in cap/CBA terms. Those payments are not the salary, since they’re happening regardless of retirement (or with every expectation of retirement). Since the payment isn’t happening any time soon and while acknowledging that money now > money later, the actual yearly salary owed during the duration of the contract is $4.57M, with those 3x $1.57M deferred payments amounting to $9M over the period of the deferred payments by the NHL‘s formula.

 

[Gliff]

Front-loading a contract is, in a way, reducing the cap hit. Given the time value of money, the front-loaded contract represents an increase in real dollars the player will get the benefit of, depending on how the player invests and his rate of return. A modest rate of return in the above scenario leads to a 2% increase in income for the front-loaded deal.

But the cap hit stays the same.

I'm not an economist and don't pretend to be like a lot of people do.

Plane and simple, the Ducks are paying him 18 million dollars for 3 years of contractual time. His cap hit is reduced as if he was being paid around 2/3 of that. There is no other way to achieve this in the NHL. Every dollar you give a player (outside of deferred money) counts towards the cap.

 

[Mr Rogers]

The deferred money is still hitting the cap, it is just discounted because he won’t be receiving for so long.

 

[Vipers31]

I'm not an economist and don't pretend to be like a lot of people do.

Plane and simple, the Ducks are paying him 18 million dollars for 3 years of contractual time. His cap hit is reduced as if he was being paid around 2/3 of that. There is no other way to achieve this in the NHL. Every dollar you give a player (outside of deferred money) counts towards the cap.

No. The cap hit is exactly what it should be. The NHL estimates that 3x $1.57M of his salary will be worth $9M by the time the payment is deferred to. You’re working this backwards.

 

[Gliff]

No. The cap hit is exactly what it should be. The NHL estimates that 3x $1.57M of his salary will be worth $9M by the time the payment is deferred to. You’re working this backwards.

Maybe. I just think its easier if these deals are not allowed.

 

[Dr Johnny Fever]

Vatrano would have been a 6M cap hit if he got all the money now. He possibly could have gotten that if he stays on a productive streak with Terry. You get 3-5 players willing to do that and you can potentially stack your team up. It doesn’t have to be the stars. OR it can be the stars, it just allows you to give them more money they can cash in somewhere with lower taxes for a lower tax hit.

First of all Verbeek never would have offered him $6Mx3 without the deferral. Some people don't seem to understand that. He's not a $6M player and wouldn't be getting that as an option. Now you might think Frank sold himself short. Maybe he plays well and gets himself more as a UFA. Maybe he does, but he didn't go that route and we will never know exactly what he could have gotten. He agreed he was worth $4.57M per year for 3 years. And to a degree, his fawning over wanting to stay here made it clear he took some amount of hometown discount.

As I pointed out that won't work with a guy like Marner because he knows he's worth at least $14M per year and that's what he will want. (And we know he doesn't give hometown discounts.) If he wants deferred money his total payout down the road will far exceed the $14M x 8 that his contract will pay and his cap hit will reflect.

So, whoever a big market team wants to sign will still have to be at an AAV (and real dollars) that is current value to the player today. They won't gain any cap benefit allowing them to load up on talent.

 

[JAHV]

Friedman gave his perspective on the deal in his podcast yesterday, which is what most of us are saying - Vatrano's cap hit is about what his market value is. Friedman thinks he got a deal in terms of cap dollars that is roughly what he would have gotten in free agency; i.e. he didn't leave much money on the table.

But it wasn't a bad deal for the Ducks. The structure of the deal just gives the Ducks flexibility currently and gives Vatrano potential tax savings and a built-in retirement plan in the future. And Vatrano wanted to be here.

For what it's worth to those who are worried about these kinds of deals becoming a trend or creating a resource disparity, apparently the league took a long time and there was a decent amount of language negotiation before they approved it (according to Friedman). I just don't see this being a slippery slope.

 

[Dr Johnny Fever]

Friedman gave his perspective on the deal in his podcast yesterday, which is what most of us are saying - Vatrano's cap hit is about what his market value is. Friedman thinks he got a deal in terms of cap dollars that is roughly what he would have gotten in free agency; i.e. he didn't leave much money on the table.

But it wasn't a bad deal for the Ducks. The structure of the deal just gives the Ducks flexibility currently and gives Vatrano potential tax savings and a built-in retirement plan in the future. And Vatrano wanted to be here.

For what it's worth to those who are worried about these kinds of deals becoming a trend or creating a resource disparity, apparently the league took a long time and there was a decent amount of language negotiation before they approved it (according to Friedman). I just don't see this being a slippery slope.

Verbeek even said it somewhere that they started looking at this concept last summer and had many discussions with the league over the whole idea. There's nothing underhanded about it.

 

[duckpuck]

That’s not reducing the cap lol. Both of those carry the same cap hit.

Deferring money ACTUALLY reduces the cap hit of a contract.

I don’t understand what you are not getting about this. Signing bonuses or front loading obviously makes the contract more appealing to the player, but it doesn’t lower the cap.

It is funny you are claiming I don't understand when you clearly don't understand the larger point. Your stated objection is that the deferral concept is bad for the NHL because it gives wealthy teams an advantage (i.e., is a method to confer a benefit that distorts the cap).

My point is that wealthy teams have already had an advantage (and been conferring a benefit on players not reflected in the cap) by using front loaded contracts and signing bonuses. Philly literally tried to pilfer Shea Webber with a massively front loaded contract that they thought Nashville could not afford to match. I cited the Toronto examples. These are all things that wealthy teams do to, in a sense, circumvent the cap.

 

[Gliff]

It is funny you are claiming I don't understand when you clearly don't understand the larger point. Your stated objection is that the deferral concept is bad for the NHL because it gives wealthy teams an advantage (i.e., is a method to confer a benefit that distorts the cap).

My point is that wealthy teams have already had an advantage (and been conferring a benefit on players not reflected in the cap) by using front loaded contracts and signing bonuses. Philly literally tried to pilfer Shea Webber with a massively front loaded contract that they thought Nashville could not afford to match. I cited the Toronto examples. These are all things that wealthy teams do to, in a sense, circumvent the cap.

And they did away with that type of contract for that exact reason lol.

Toronto doesn't even really do it. Matthew's AAV is 13.25 mil and his compensation in year 1 is 16.7 mil. That isnt even that frontloaded, especially compared to the Weber deal.

Anyways, I'm not going to argue about this any more. I think the league would be better off not allowing these deals but they are here to stay. Lets move on.

 

[MMC]

 

[TheStuntman]

I would hate to lose Dumolin as he's been very good and a steady veteran presence, but the Ducks could probably get a pretty good return for him if demand is high enough.

 

[nbducksfan19]

I would hate to lose Dumolin as he's been very good and a steady veteran presence, but the Ducks could probably get a pretty good return for him if demand is high enough.

I’d hate to lose him too, mostly because his son is the star of our five year olds soccer team.

 

[The Midnight Burrito]

Booooooooo

 

[Vipers31]

Maybe. I just think its easier if these deals are not allowed.

You’re definitely right about that, but that simplicity comes at a cost in a very complex environment. The easiest thing would be no cap at all, and if we agree with the idea of a cap to bolden competition, this at least offers a bit of an opportunity to take away a bit of the burden teams in some states deal with.