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

MasterofGrond

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McKenzie : “there’s a present-day dollars calculation that is done on the deferred money and that is where, under the right set of circumstances, it could have an influence on the AAV.“

I really would love to see the math on this. Because it’s all taking place behind the curtain the fans are left not knowing the potential level of abuse this opens the door to.

I don’t care that much about the Canes saving a few hundred grand on this contract’s cap hit. I do care if this is just the tip of the iceberg that allows deep pocketed teams to make huge off cap bonus payments to free agents. And we clearly don’t know the limits yet.
The number they use is right there in the CBA. LIBOR + 1.25.

You could calculate it yourself once the bonus structure is announced,
 
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Discipline Daddy

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Why didn't they do this with Aho?
Good question as I'm sure we had known about the idea at the time. Different GM. Tulsky is now in charge, not Waddell, and if bet Tulsky feels less inclined to play it safe in hockey circles.

Also if anything goes south with the leagues approval (doubtful), we are still fine as we still have $2.5M or so in cap space with Fast on LTIR. The timing feels better to trial balloon this summer as opposed to last summer.
 

MasterofGrond

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Teams, especially rich teams should have just been doing this all along
If that is how it worked, teams would have been doing it.

The bonus value is calculated for the year it is deferred from, and included in the overall AAV. The number is smaller, but only because $1M is less valuable when paid 9 years from now than when it is paid today.
 
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Bond

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Good question as I'm sure we had known about the idea at the time. Different GM. Tulsky is now in charge, not Waddell, and if bet Tulsky feels less inclined to play it safe in hockey circles.

Also if anything goes south with the leagues approval (doubtful), we are still fine as we still have $2.5M or so in cap space with Fast on LTIR. The timing feels better to trial balloon this summer as opposed to last summer.
Aho wasn’t interested and took the front loaded deal which is the common financial advice
 

Chrispy

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Good question as I'm sure we had known about the idea at the time. Different GM. Tulsky is now in charge, not Waddell, and if bet Tulsky feels less inclined to play it safe in hockey circles.

Also if anything goes south with the leagues approval (doubtful), we are still fine as we still have $2.5M or so in cap space with Fast on LTIR. The timing feels better to trial balloon this summer as opposed to last summer.
Also would need Aho to agree to it.

Aho’s agent has shown himself to be very good at getting the deal he wants, as we saw leveraging the offer sheet to get the 5 year deal he wanted vs 7-8 years.

Also, Aho had more leverage as a pending UFA vs Jarvis as an RFA who by all accounts has no interest in playing elsewhere and using the offer sheet as leverage.
 

Michoulicious

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Cap hit at 7,5 per for 8 years (60 millions), but contract value is 63,2 M?

So they get a 3,2 millions cap hit at year #9, is that it?

What happens if they trade the player and retain salary, or if the players gets on LTIR or retires at some point?

This is way too complicated for nothing, league should just disallow this.
 
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NyQuil

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I know that, but the “rich” teams could’ve been doing this for nearly 20 years.

Players and agents aren’t overly fond of deferring money which is why contracts are so front-loaded.

The NHL has had a salary cap since 2005. How in the world did it take GMs 19 years to figure out this loophole?? Something seems off here.

It’s not that surprising.

Front-loading a contract is a way of putting more money in the hands of a player while keeping a lower AAV.

Players and agents willing to defer are few and far between.
 

Armourboy

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Players and agents aren’t overly fond of deferring money which is why contracts are so front-loaded.



It’s not that surprising.

Front-loading a contract is a way of putting more money in the hands of a player while keeping a lower AAV.

Players and agents willing to defer are few and far between.
Well and if you have a good financial advisor they are going to earn you far more on that money over the course of that contract than it would be worth deferred.

Thing is for me its the older players that could really make use of this. You are signing 1-2 year deals generally at that point anyways. I'd do a 1 million a season contract with a backend of 5-10 million deferred for 1-2 years.
 

NyQuil

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Well and if you have a good financial advisor they are going to earn you far more on that money over the course of that contract than it would be worth deferred.

This is precisely why everyone wants money up front. It's what I meant by "putting more money in their hands" because of the compounding from investing.
 
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MasterofGrond

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Under the current CBA, nope, that money simply never counts against the cap.

I have a feeling that the next CBA will change that, especially if lots of teams start doing this.
Technically correct, but completely divorced from the mechanics of what is actually happening.

That 3.2 doesn’t exist, it never existed. People would be better served imagining that instead of a (say) 9M deferred bonus they’re getting in year 9, they’re deferring a (say) 5.8M bonus form year 1 that is getting paid out with interest in year 9. It’s only a cap discount if you only care about payment numbers and not at all about payment structure.

By deferring money, the player is taking a less valuable contract, by any reasonable definition. Of course the cap hit should be lower.
 

Discipline Daddy

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Players and agents aren’t overly fond of deferring money which is why contracts are so front-loaded.



It’s not that surprising.

Front-loading a contract is a way of putting more money in the hands of a player while keeping a lower AAV.

Players and agents willing to defer are few and far between.
I believe I read Jarvis is getting $30M or so in bonuses already. I'm sure he is getting say a $4M signing bonus or so at the start of every year. I haven't seen the year by year breakdown. I would imagine the investment potential he gets from all that $30M bonus money more than makes up for the delay of the $3.2M at the end of the 8 year pact. Also, Jarvis is a happy go lucky guy. He's I'm sure thrilled to get the bag and won't fight for every penny. If he was maximally extracting money, it's the safer bet to take a 2 or 3 year deal and cash in higher later, assuming no injuries.
 

Michoulicious

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Under the current CBA, nope, that money simply never counts against the cap.

I have a feeling that the next CBA will change that, especially if lots of teams start doing this.
I am not sure I understand... The money spent never counts against the cap?

How is that possible?
 

AcerComputer

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Aug 4, 2014
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The Devils were punished for the first attempt at a contract, the 17 year one. They approved the 15 year one, which was still blatant and obvious circumvention but less blatant and obvious- it was only marginally shorter, but it was also a lot less frontloaded. The 17 year one maximized the money up front and was a million a year for half of the entire contract.

The league shouldn't have approved the 15 year one either, but that's not the one the Devils were "punished" (in reality, they never actually had to give up the pick, so they weren't punished at all) for.
They would have had the 11th OA pick, but instead picked 30th OA in 2014. From my perspective there is no cap circumvention because the league did not approve the contract. So the NJD did not benefit in any way from the original contract. Normally you punish someone for gaining an edge, like with ARZ doing private testing on draft prospects.
 
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