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

[Soundwave]

There's no guarantee investing the money will give you a locked in return. Yes the generic stock market has tended to return a certain amount on aggregate, but there is no guarantee on that and there is no guarantee future returns from the market will be the same as the past.

For example if you invested $5 million into a generic US index fund (SP500) on Dec 1, 2000, ten years later on Dec, 1, 2010 your $5 million would have have grown to basically nothing.

Whereas paying less tax in that case, say instead of paying a whopping 48% tax on all your income in that time, you could have changed that to 0-10% income tax by changing your residency and deferring payment during that time ... you'd have a lot more money.

 

[TLEH]

There's no guarantee investing the money will give you a locked in return. Yes the generic stock market has tended to return a certain amount on aggregate, but there is no guarantee on that and there is no guarantee future returns from the market will be the same as the past.

For example if you invested $5 million into a generic US index fund (SP500) on Dec 1, 2000, ten years later on Dec, 1, 2010 your $5 million would have have grown to basically nothing.

Whereas paying less tax in that case, say instead of paying a whopping 48% tax on all your income in that time, you could have changed that to 0-10% income tax by changing your residency and deferring payment during that time ... you'd have a lot more money.

I mean if you pick the 10 years that bookends with one of the largest recessions that is going to happen. 2010 to 2019 5M would turn into 17M if you reinvested the dividends.

Inflation from 2010 to 2019 would cost you about 860k in inflation. 17.8M you would have "lost" deferring the money. During that 9 year period if you use 5 million. I'm sure there are a million other ways to do things, people that do this for a living probably have way better ideas than me but when I look at it, thats how I see it.

 

[Soundwave]

I mean if you pick the 10 years that bookends with one of the largest recessions that is going to happen. 2010 to 2019 5M would turn into 17M if you reinvested the dividends.

Inflation from 2010 to 2019 would cost you about 860k in inflation. 17.8M you would have "lost" deferring the money. During that 9 year period if you use 5 million. I'm sure there are a million other ways to do things, people that do this for a living probably have way better ideas than me but when I look at it, thats how I see it.

There's no guarantee the next 10 years will be exactly like the last 10 years. It could be the same as 2000-2010.

Paying 0% or 10% or 35 percent tax versus almost 50% tax though .... that's a guarantee of a shit ton more money in your pocket.

People were naive when they said Ohtani is giving away money ... he's really not. He's going to cash in those deferred salary payments at a much lower tax rate when he moves to a lower tax jurisdiction after retirement. There's actually some politicians in California who are upset about it.

 

[TLEH]

There's no guarantee the next 10 years will be exactly like the last 10 years. It could be the same as 2000-2010.

Paying 0% or 10% or 35 percent tax versus almost 50% tax though .... that's a guarantee of a shit ton more money in your pocket.

People were naive when they said Ohtani is giving away money ... he's really not. He's going to cash in those deferred salary payments at a much lower tax rate when he moves to a lower tax jurisdiction after retirement. There's actually some politicians in California who are upset about it.

Jarvis is going to be 31 and need another NHL deal I doubt he is changing residency for that. Maybe he is idk.

The money Ohtani has and the age, years, whatever.. yeah it makes way more sense for him.

 

[Soundwave]

Jarvis is going to be 31 and need another NHL deal I doubt he is changing residency for that. Maybe he is idk.

The money Ohtani has and the age, years, whatever.. yeah it makes way more sense for him.

If Jarvis was like 38 or 40 when his 15.6 million pay out comes due and was retired, he could do something like setup residency in the Bahamas, only be required to stay in the Bahamas for 90 days/365 days for 1 year, spend the rest of the year in say Miami and Europe and bank that 15.6 million free of taxes and then live where ever he wants after that.

But I suspect even Jarvis will be looking to sign with a no state tax team for the 2032 season to be able to keep as much of that 15.6 million as possible.

 

[Jyrki]

There's no guarantee the next 10 years will be exactly like the last 10 years. It could be the same as 2000-2010.

Paying 0% or 10% or 35 percent tax versus almost 50% tax though .... that's a guarantee of a shit ton more money in your pocket.

People were naive when they said Ohtani is giving away money ... he's really not. He's going to cash in those deferred salary payments at a much lower tax rate when he moves to a lower tax jurisdiction after retirement. There's actually some politicians in California who are upset about it.

Deferred compensation is also fairly common for older employees in the corporate world, because it's pretty attractive for people who are eyeing retirement but have already maxed out their tax-free retirement investments. Even some government employers do it when they want to attract better workers but don't have extra money, instead they offer deferred leave where the employee can defer salary for them to have a paid sabbatical year, effectively getting a vacation that's worth the marginal tax savings from deferring paychecks.

 

[ijuka]

And here I thought that 8-year contracts last for 8 years, not 9.

 

[Carl Hungus]

Love this guy. This is a great deal for the Canes

 

[Pavels Dog]

Solid contract. Given that Lucas Raymond is rated as a tier below him one would expect Raymond’s contract to come in well below this one.

 

[Chrispy]

If Jarvis was like 38 or 40 when his 15.6 million pay out comes due and was retired, he could do something like setup residency in the Bahamas, only be required to stay in the Bahamas for 90 days/365 days for 1 year, spend the rest of the year in say Miami and Europe and bank that 15.6 million free of taxes and then live where ever he wants after that.

But I suspect even Jarvis will be looking to sign with a no state tax team for the 2032 season to be able to keep as much of that 15.6 million as possible.

There are rules around establishing residency. I don’t see how Jarvis can sign a UFA contract on July 1 2032, the day he gets his deferred bonus, and establish residency in the state of his UFA contract the same day.

 

[Soundwave]

There are rules around establishing residency. I don’t see how Jarvis can sign a UFA contract on July 1 2032, the day he gets his deferred bonus, and establish residency in the state of his UFA contract the same day.

If he was retired, it probably wouldn't be that difficult for him to figure out how to get residency somewhere else if he really wanted to.

The problem for Jarvis is he'll still only be like 31 or 32 when this deal expires, if it took him to retirement age, then it would be a different story.

 

[Warden of the North]

Uhhhh, this will be every contract from this point on for anyone who's remotely good

 

[ottawah]

A big question for me is are deferred payments part of payouts for purposes in determining team spending. I strongly suspect it is. In which case, the players union should be absolutely against this. What in effect you are doing is allowing teams to go over the cap now, and that will come out of the players escrow in 9 years.

For all the talk of exceeding the cap, the truth is the cap that should matter to players the percentage of HRR they are allowed to. Anything that is "cap circumvention" (legal or otherwise) may allow certain (i.e. elite level players) to cash in, but eventually will come at the expense for the majority, and generally lesser well paid players, around the league.

 

[GrandBison]

In terms of cashflow, the only way it makes sense for Jarvis is that is money that the Canes didn't want to give him at first. Heavily front end contracts are always the best for the player and I don't see how this could become a trend.

 

[Blueline Bomber]

Uhhhh, this will be every contract from this point on for anyone who's remotely good

It won’t be.

1. You’ve got to get players to agree to the deferred payment. Most players want more money up front, not 9 years from now.

2. The Canes had to defer over $15 million to save 500k in cap space. That’s a lot of money you’re asking the player to postpone for a relatively small payoff.

 

[GrandBison]

There's no guarantee investing the money will give you a locked in return. Yes the generic stock market has tended to return a certain amount on aggregate, but there is no guarantee on that and there is no guarantee future returns from the market will be the same as the past.

For example if you invested $5 million into a generic US index fund (SP500) on Dec 1, 2000, ten years later on Dec, 1, 2010 your $5 million would have have grown to basically nothing.

Whereas paying less tax in that case, say instead of paying a whopping 48% tax on all your income in that time, you could have changed that to 0-10% income tax by changing your residency and deferring payment during that time ... you'd have a lot more money.

With the kind of money pro players have, it should not be uncommon that they beat the market. To defer a payment for 10 yrs is not ideal if you want to control your money. Tax laws and agreements could also change by that time.

 

[Boom Boom Apathy]

Oh I'm sorry I didn't realise all the GMs took an IQ test, please post the results so I don't make the same mistake next time.

LOL. Lighten up Francis. The post was made in a light hearted manner and was referencing that Tulsky has a Bachelor of Arts in chemistry and physics from Harvard University and a PhD in chemistry from the University of California, Berkeley. He worked for two years in postdoctoral study at the Naval Research Laboratory, then worked in nanotechnology for ten years at Silicon Valley companies and he holds 27 US patents. The guy is generally known for how smart he is and NOT known for how good of a GM he is.

It's not a slight toward your GM. Everyone knows how good Zito and your team is currently the Stanley Cup Champs, so not sure why you take such offense to a light hearted statement like that, but whatever. Carry on.

 

[Nico Hischier]

Is this contract going to stand or is it circumvention? I understand deferred payments is a legal seldom used move but I don’t understand how they can’t make it for the 9th year if contracts have a limit of 8 years. The only thing that makes sense if they did a 7 year contract and deferred the last signing bonus to the 8th year.

 

[pld459666]

Not sure if addressed, but in the unlikely event that the Carolina franchise folds, the deferred $$ becomes unsecured. Seth would be lucky to get 10 cents on the dollar.

 

[Blueline Bomber]

Is this contract going to stand or is it circumvention? I understand deferred payments is a legal seldom used move but I don’t understand how they can’t make it for the 9th year if contracts have a limit of 8 years. The only thing that makes sense if they did a 7 year contract and deferred the last signing bonus to the 8th year.

Tulsky checked with the NHL and NHLPA before making this kind of contract, so it’d be real funny if they suddenly decided to nullify it. Granted, it’s the NHL we’re talking about, so it’s not impossible.

 

[Jared Dunn]

So there's no cap implications for year 9 even though he's paid in year 9? That is the part I am not understanding here

 

[BLONG7]

Are the Canes the 1st team to do deferred monies owing??

Cold this be a real pandora's box for the rich teams???

 

[MasterofGrond]

So there's no cap implications for year 9 even though he's paid in year 9? That is the part I am not understanding here

The cap hit for the payments made in year 9 are calculated and included in years 1, 2, and 7, when those bonuses are earned.

 

[Blueline Bomber]

Are the Canes the 1st team to do deferred monies owing??

Cold this be a real pandora's box for the rich teams???

Nope, the Coyotes did it with a Shane Doan contract way back when. It's always been available for many, many years.

It doesn't happen often (and probably won't happen again anytime soon) because most players want to get paid sooner, not 9 years from now.

It doesn't matter how rich a team is. Ultimately, it comes down to the player.

 

[BLONG7]

Nope, the Coyotes did it with a Shane Doan contract way back when. It's always been available for many, many years.

It doesn't happen often (and probably won't happen again anytime soon) because most players want to get paid sooner, not 9 years from now.

It doesn't matter how rich a team is. Ultimately, it comes down to the player.

Agreed, the player holds that option. Thinking Doan did it pre cap era??

I do think the rich and better competative teams will be able to entice players to do this at some point.