Confirmed Signing with Link: [CAR] F Seth Jarvis signs extension with the Hurricanes (8 years, $7.420087M AAV; deferred salary in 9th year)

[Lunatik]

https://x.com/i/web/status/1829863568931430732

https://x.com/i/web/status/1829867419734851923

Click to read more...

 

[Peasy]

Sources: Hurricanes and Seth Jarvis agree to $63.2 million contract with unique deferred structure

The Carolina Hurricanes and restricted free agent Seth Jarvis have agreed to terms on a new eight-year, $63.2 million contract,...

www.dailyfaceoff.com

The Carolina Hurricanes and restricted free agent Seth Jarvis have agreed to terms on a new eight-year, $63.2 million contract, sources tell Daily Faceoff. It’s an important piece of business for the Canes, locking up the heartbeat of their team for the foreseeable future, but the way the contract is structured may be important business for the NHL’s other 31 clubs.

That’s because Jarvis’ new deal is set to become one of the first in NHL history to have a salary cap hit substantially lower than the typical average annual value because he was willing to defer salary.

Nearly every NHL contract in the salary cap era, since 2005, has been prescribed a simple cap hit: Take the total dollars ($63.2 million) and divide it by the length of the deal (eight years) and you arrive at $7.9 million per year on the team’s salary cap chart. With this deal, Jarvis will land on the Canes’ books at approximately $7.5 million per year, a savings of $400,000 each season.

I think this is going to open a massive can of worms, and will eventually be taken out of the next CBA.

Take Hart Trophy winner Leon Draisaitl and the contract he is currently negotiating with the Edmonton Oilers. Sources indicate Draisaitl’s initial ask on a long-term deal was north of $14 million per year on average. Let’s call it $14.2 million for example and argument sake. That is a total of $113.6 million over eight years, which yes, would typically come with a salary cap charge of $14.2 million on the AAV.



What if Draisaitl was hypothetically willing to defer $33.6 million of that contract to be paid out over the 40 years after the deal expires? That would be approximately $840,000 per year from 2033 until 2073, and yes, we’re talking a Bobby Bonilla-type contract. That would pay Draisaitl $80 million over the first eight years of the deal, hypothetically making for a cap hit in the neighborhood of $10 million per year – or a discount of $4.2 million per year of the deal.

That isn’t exactly how the calculation or the math works, but the numbers are round and it’s easy to grasp and understand. Draisaitl has already earned north of $70 million in his career. To bring in another $80 million over the first eight years of the next deal makes him more than financially secure for future generations of Draisaitls – and the deferred $33.6 million, which is accruing interest the entire time, is not just gravy but also idiot-proof savings.

 

[Lou is God]

You might want to put Jarvis name in the thread title

 

[Lunatik]

You might want to put Jarvis name in the thread title

lmao, f*** me. I don't usually post this stuff.

 

[Peasy]

The Carolina Hurricanes and restricted free agent Seth Jarvis have agreed to terms on a new eight-year, $63.2 million contract, sources tell Daily Faceoff. It’s an important piece of business for the Canes, locking up the heartbeat of their team for the foreseeable future, but the way the contract is structured may be important business for the NHL’s other 31 clubs.

That’s because Jarvis’ new deal is set to become one of the first in NHL history to have a salary cap hit substantially lower than the typical average annual value because he was willing to defer salary.

Nearly every NHL contract in the salary cap era, since 2005, has been prescribed a simple cap hit: Take the total dollars ($63.2 million) and divide it by the length of the deal (eight years) and you arrive at $7.9 million per year on the team’s salary cap chart. With this deal, Jarvis will land on the Canes’ books at approximately $7.5 million per year, a savings of $400,000 each season.

I think this is going to open a massive can of worms, and will eventually be taken out of the next CBA.

Take Hart Trophy winner Leon Draisaitl and the contract he is currently negotiating with the Edmonton Oilers. Sources indicate Draisaitl’s initial ask on a long-term deal was north of $14 million per year on average. Let’s call it $14.2 million for example and argument sake. That is a total of $113.6 million over eight years, which yes, would typically come with a salary cap charge of $14.2 million on the AAV.



What if Draisaitl was hypothetically willing to defer $33.6 million of that contract to be paid out over the 40 years after the deal expires? That would be approximately $840,000 per year from 2033 until 2073, and yes, we’re talking a Bobby Bonilla-type contract. That would pay Draisaitl $80 million over the first eight years of the deal, hypothetically making for a cap hit in the neighborhood of $10 million per year – or a discount of $4.2 million per year of the deal.

That isn’t exactly how the calculation or the math works, but the numbers are round and it’s easy to grasp and understand. Draisaitl has already earned north of $70 million in his career. To bring in another $80 million over the first eight years of the next deal makes him more than financially secure for future generations of Draisaitls – and the deferred $33.6 million, which is accruing interest the entire time, is not just gravy but also idiot-proof savings.

If all theyre doing is just deferring one signing bonus, this seems like a no brainer for teams to do. You could literally just defer year 8 signing bonus to year 9, and save a bunch on cap hit each year while the player is only missing out on that money for a single year, and by that point they would have already gotten 90% of their contract paid out.

 

[Lunatik]

I think this is going to open a massive can of worms, and will eventually be taken out of the next CBA.

It will 100% open a can of worms. Much like the Ohtani contract in baseball. Thankfully this isn't as asinine as that contract.

 

[Blueline Bomber]

Leave it to the smartest GM in the league to find a way to manipulate the numbers. Even better that he apparently already snuck the same kind of deal in the Slavin contract and waited to see if anyone would raise a fuss.

 

[Identity404]

I think this is going to open a massive can of worms, and will eventually be taken out of the next CBA.



If all theyre doing is just deferring one signing bonus, this seems like a no brainer for teams to do. You could literally just defer year 8 signing bonus to year 9, and save a bunch on cap hit each year while the player is only missing out on that money for a single year, and by that point they would have already gotten 90% of their contract paid out.

I’d have to think if that was allowed it would have been exploited a long time ago.

 

[Gaylord Q Tinkledink]

The deferred payments still carry a cap hit after the contract is done, so I'm not sure how many teams want to carry a constant cap hit, even if it's small like 800k for a decade.

Even at a smaller 400k, it's still cap you can't use

 

[Svechhammer]

Tulsky coming in hot with CBA exploiting contracts right off the bat

The deferred payments still carry a cap hit after the contract is done, so I'm not sure how many teams want to carry a constant cap hit, even if it's small like 800k for a decade.

Even at a smaller 400k, it's still cap you can't use

Yeah but at the same time the cap should continue to go up to the point where even 400k is probably negligible when it comes into effect.

Similar issues have presented in the NFL and it's largely been overblown

 

[tmg]

Not even a question of bylaws, but basic math terminology - AVERAGE annual value is, by definition, the average - total compensation divided by years of contract. If it’s a 63.2m contract that spans 8 years, by definition it has an aav of 7.9. If there’s compensation outside the bounds of the contracted period (like a ninth year) then it’s pure circumvention.

If the Devils were stripped of a pick for a legal contract at the time for cap circumvention, I can’t wait to see the punishment for this.

What would stop teams from extrapolating this to a one year contract? “Oh he’s only signed for 1 mil salary, but he has an 8 mil bonus next summer that’s cap free!”

 

[Marc the Habs Fan]

The deferred payments still carry a cap hit after the contract is done, so I'm not sure how many teams want to carry a constant cap hit, even if it's small like 800k for a decade.

Even at a smaller 400k, it's still cap you can't use

Read the article, there would be no cap hit.

Because that payment is technically scheduled for Year 9 of the eight-year deal, there is no Year 9 cap charge for the Hurricanes, and the cap hit for the Hurricanes over the course of the eight-year deal is charged on what is actually paid out during that time.

 

[Reality Czech]

Holy circumvention Batman!

 

[Svechhammer]

Not even a question of bylaws, but basic math terminology - AVERAGE annual value is, by definition, the average - total compensation divided by years of contract. If it’s a 63.2m contract that spans 8 years, by definition it has an aav of 7.9. If there’s compensation outside the bounds of the contracted period (like a ninth year) then it’s pure circumvention.

If the Devils were stripped of a pick for a legal contract at the time for cap circumvention, I can’t wait to see the punishment for this.m
What would stop teams from extrapolating this to a one year contract? “Oh he’s only signed for 1 mil salary, but he has an 8 mil bonus next summer that’s cap free!”

It's been specifically allowed since the 2005 CBA, so don't hold your breath on the punishment

 

[tmg]

It's been specifically allowed since the 2005 CBA, so don't hold your breath on the punishment

So what’s stopping teams from signing star players to $1m salary contracts with $10mil deferred signing bonus cap free?

 

[Coffees]

OH WOW

 

[TheBeastCoast]

So if the max contracts can be is 8 years....how can a cap hit legally be calculated on a 9 year contract? I am not sure if I am missing something here. No hate either, honestly confused lol

 

[Boom Boom Apathy]

So what’s stopping teams from signing star players to $1m salary contracts with $10mil deferred signing bonus cap free?

Isn't there a clause that states that total compensation for any 1 year cannot be a certain % higher or lower than other years (or something like that)?

 

[WhataKnight]

Kelly McCrimmon’s circumventa-phone when this contract was announced:

Seems pretty smart on Tulsky’s part to me.

 

[tmg]

Isn't there a clause that states that total compensation for any 1 year cannot be a certain % higher or lower than other years (or something like that)?

There is. But how would that apply to a one year contract? It seems this loophole is not counting the deferred bonus money as being in any year of the contract.

Even if it was the percentage rule, it could be 5 salary and 5 deferred, and get a 10 mil player for 5 mil cap hit.

 

[Vitto79]

So Canes out of cap space ?

 

[Blueline Bomber]

So what’s stopping teams from signing star players to $1m salary contracts with $10mil deferred signing bonus cap free?

The CBA

 

[tmg]

The CBA

Until today we thought the CBA meant all money on a contract figured in aav. Today we’re finding out that’s not the case - so I’d like to know what specifically makes the year 9 bonus money in an 8 year contract free, that wouldn’t make the year 2 bonus money in a 1 year contract free.

 

[JediOrderPizza]

Yzerman thanks you.

 

[Coffees]

So what’s stopping teams from signing star players to $1m salary contracts with $10mil deferred signing bonus cap free?

The CBA