Confirmed Signing with Link: [ANA] F Frank Vatrano signs extension with the Ducks (3 years, $4.57M AAV; $9M deferred salary)

[Zegs2sendhelp]

This is the future of sports deals until new CBAs try and crack down on them. High tax states should all be doing this.

Ya this is a good move to get players to stay in those high tax states, especially if the player wants to stay.

 

[Korpse]

Half the salary deferred for 7+ years just seems like poor financial advice for the player.

 

[Zegs2sendhelp]

This is cool. I like it, gives teams in high state/province taxes a creative work around

Not sure players will really be all over it because of inflation and missing out on potential more immediate investment income from the deferred money but I like that there are more options

Yep like I said it’s a good alternative for players that want to stay on these teams.

Vatrano has been open about wanting to stay/end his career in Anaheim

 

[wonton15]

The Vancouver Canucks have been penalized for this and will forfeit their 2026 first round pick

 

[Gregor Samsa]

Because California has insanely high tax rates so most athletes probably don't want to retire there.

It makes sense but I don’t think those Dodger players are going to have to worry about money no matter where they live; they are making mucho bucks. I still think posterity will look back at this era of Dodgers baseball in some type of way

 

[Gaylord Q Tinkledink]

So, when he's collecting his 900k there's no cap hit then for the Ducks ?

If so, teams need to do this with every contract signed.

Lower cap hit and no consequences.

The Vancouver Canucks have been penalized for this and will forfeit their 2026 first round pick

*Ottawa Senators

 

[crackdown44]

Yep like I said it’s a good alternative for players that want to stay on these teams.

Vatrano has been open about wanting to stay/end his career in Anaheim

Yeah it works in this particular case for a few reasons. The others being Vatrano probably knows he’s not getting anything really close to 6 mil on the open market, and Anaheim needs to hit the cap floor while moving out of the rebuild

 

[Fitzy]

What the f***? lol. Okay. Well congrats to him.

edit - just looked at this contract structure, he's a smart man! That's how you plan for the future. But at the same time he could have just invested that money all now and in 10-20 years it would be worth much more than the 9M. But either way, I like it.

If inflation stays at significant levels it makes it even more peculiar. I could beat that tax savings with a simple high interest savings account

 

[VikingAv]

So I see “deferred salary” seems to largely be a California based team thing.

Seth Jarvis also signed a deal with deferred salary last summer with Carolina. Though not with such a large amount deferred, iirc.

 

[Zegs2sendhelp]

So, when he's collecting his 900k there's no cap hit then for the Ducks ?

If so, teams need to do this with every contract signed.

Lower cap hit and no consequences.


*Ottawa Senators

Players have to agree too, not every player is going to be down to do this

Vatrano wanted to stay in Anaheim and was prob willing to work with Anaheim to maximize his money+ help the team w/ cap hit.

 

[Static]

So, when he's collecting his 900k there's no cap hit then for the Ducks ?

If so, teams need to do this with every contract signed.

Lower cap hit and no consequences.


*Ottawa Senators

Players have to be willing to not get their money right away. Not everyone is set up that way.

 

[Empoleon8771]

This is the future of sports deals until new CBAs try and crack down on them. High tax states should all be doing this.

I don't really see what there is to crack down on here. It's not violating the cap because the value of future dollars (especially in 10+ years) are worth less than today due to inflation. Vatrano's deal isn't really a "3 year, $6 million AAV deal", it's only a 3 year, ~$4.5 million deal in today's money. The $9 million deferred is only worth $4.57 million today according to this contract.

The benefit for the team is that it makes it easier to convince players to overlook high local tax rates, but there is no real cap benefits for teams doing this.

 

[Static]

I don't really see what there is to crack down on here. It's not violating the cap because the value of future dollars (especially in 10+ years) are worth less than today due to inflation. Vatrano's deal isn't really a "3 year, $6 million AAV deal", it's only a 3 year, ~$4.5 million deal in today's money.

The $9 million deferred is only worth $4.57 million today according to this contract.

Any contract structured in a way to artificially lower cap hits is going to be looked at by the governing body. There will be language in the next CBA in response to this type of deal.

 

[chaser17]

I don't think deferring money like that is smart at all honestly.

"Time Value of Money (TVM) is a financial concept that describes why a dollar today is worth more than a dollar tomorrow. There are two main reasons why money in the present is worth more than an equal amount in the future: Inflation and Opportunity Cost."

 

[Empoleon8771]

Any contract structured in a way to artificially lower cap hits is going to be looked at by the governing body. There will be language in the next CBA in response to this type of deal.

This deal isn't structured to artificially lower the cap hit. Vatrano is not getting $18 million in today's money on this contract.

 

[Vipers31]

Half the salary deferred for 7+ years just seems like poor financial advice for the player.

The full salary (or something much closer to this) wouldn't have been on the table if not for this structure, though. They clearly worked this out together.

 

[MMC]

If so, teams need to do this with every contract signed.

I mean it’s not entirely up to them. The player has to agree to wait to receive his cash

 

[Static]

This deal isn't structured to artificially lower the cap hit. Vatrano is not getting $18 million in today's money on this contract.

Sure it is. It's like buying player contracts on credit rather than cash.

 

[Pablo El Perro]

What if the American dollar has been replaced as US currency by dogecoin in 10 years time?

We'll all be screwed.

 

[Mrfenn92]

Good for Frank

 

[Empoleon8771]

Sure it is. It's like buying player contracts on credit rather than cash.

No it isn't. Vatrano isn't getting paid that $9 million until 2035-2045. $9 million over that window is not equal to $9 million today.

 

[Static]

No it isn't. Vatrano isn't getting paid that $9 million until 2035-2045. $9 million over that window is not equal to $9 million today.

We have no idea what $9 million in 2035 will be worth

 

[Zirakzigil]

Interesting. Wonder if we will see rich teams start to flex this way and if the NHL in turn brings something into the CBA.

 

[Prior]

Can’t wait for the Wild to do this with Kaprizov, the NHL approve the contract, and then retroactively change the rules a year later.

 

[Empoleon8771]

We have no idea what $9 million in 2035 will be worth

We don't know the exact amount but it will absolutely be less. That's what inflation is.

$1 in 2015 is worth $1.33 today.