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

[Soundwave]

The people who keep saying "that's a lot of work for only 500k cap savings" don't really get what I think Carolina is doing.

If they can get like 5-6 players on their team to defer salary in the same way on future contracts, that eventually becomes like $3 million in extra cap room, at a trade deadline that's like having $12+ million in extra cap.

 

[Frank Drebin]

Jarvis is grossing $63,200,000 over the next 8 years and a day. Without the deferral that would be $7.9m AAV. There is no "year 9" cap hit for the bonuses paid on 7/1/2032

By deferring some of the bonuses it is $7,420,087 AAV over 8 years that would be $59,360,695.

That is 6.47% "better".

Jarvis is losing the time value of 10m pre tax dollars for 7-8 years

10m 7 years ago invested in the s&p would be worth 26m today

I probably don’t have to tell you how housing prices have changed since 2017

Jarvis is leaving money on the table and his 63m contract isn’t worth the same as a 63m contract without deferring bonuses

Asking him to defer bonuses is the same as asking him to take less money

Both parties would be in the same place if he just signed a traditional contract for 7.5 aav a year

Nobody else has used this “loophole” because it’s not an advantage.

 

[Frank Drebin]

The people who keep saying "that's a lot of work for only 500k cap savings" don't really get what I think Carolina is doing.

If they can get like 5-6 players on their team to defer salary in the same way on future contracts, that eventually becomes like $3 million in extra cap room, at a trade deadline that's like having $12+ million in extra cap.

It’s not saving 500k on the cap because Jarvis’ contract isn’t worth the same as a traditional contract for 63/8

10m 7 years from now will still be a lot of money but it’s not nearly as good as having 10m in pocket today

Time value of money is a real thing

 

[HockeyScotty]

Jarvis is losing the time value of 10m pre tax dollars for 7-8 years

10m 7 years ago invested in the s&p would be worth 26m today

I probably don’t have to tell you how housing prices have changed since 2017

Jarvis is leaving money on the table and his 63m contract isn’t worth the same as a 63m contract without deferring bonuses

Asking him to defer bonuses is the same as asking him to take less money

Both parties would be in the same place if he just signed a traditional contract for 7.5 aav a year

Nobody else has used this “loophole” because it’s not an advantage.

I understand that Jarvis has agreed to "take less" via the deferral compared to what many felt was his market value. He said he would take less to stay in Carolina and help the team be competitive.

What Carolina gains, besides the delayed payout; is enough cap room this year to not use LTIR money out of the gate, accrue some more space for the TDL, and have the cap space to carry a 7th D, 13th F, or 3rd G with a cap hit between $775k and $854k; which for them is extremely valuable with Freddy in net. If they gave Jarvis $7.5m AAV then they would have less than $775k space and no roster flexibility. That is a big deal for a contender.

Carolina gains several advantages in this contract. Jarvis probably does but we'll never know what the initial terms were from Carolina to compare it to. We have to assume he gains over their initial offer since he signed it.

 

[Frank Drebin]

I understand that Jarvis has agreed to "take less" via the deferral compared to what many felt was his market value. He said he would take less to stay in Carolina and help the team be competitive.

What Carolina gains, besides the delayed payout; is enough cap room this year to not use LTIR money out of the gate, accrue some more space for the TDL, and have the cap space to carry a 7th D, 13th F, or 3rd G with a cap hit between $775k and $854k; which for them is extremely valuable with Freddy in net. If they gave Jarvis $7.5m AAV then they would have less than $775k space and no roster flexibility. That is a big deal for a contender.

Carolina gains several advantages in this contract. Jarvis probably does but we'll never know what the initial terms were from Carolina to compare it to. We have to assume he gains over their initial offer since he signed it.

Carolina may gain from this contract in giving Jarvis a contract with a total number that looks very good to the player but a cap hit that is a little less for the team

Strictly from a financial point of view I think Jarvis would have been ahead 9 times out of 10 if he would have taken a traditional contract for 8 yrs 59.36m for the same cap hit as he has now.

I really don’t see this as a loophole that will be used all that often as its more smoke and mirrors than a real cap advantage

 

[HockeyScotty]

Carolina may gain from this contract in giving Jarvis a contract with a total number that looks very good to the player but a cap hit that is a little less for the team

Strictly from a financial point of view I think Jarvis would have been ahead 9 times out of 10 if he would have taken a traditional contract for 8 yrs 59.36m for the same cap hit as he has now.

I really don’t see this as a loophole that will be used all that often as its more smoke and mirrors than a real cap advantage

I agree that it won't become a well-used method for contracts. It requires a very specific set of circumstances to make sense. The only exceptions being possibly how long teams are allowed to defer the payments; and players that are wanting to take a "hometown discount" to help their teams competitive window and are not prioritizing quick financial returns.

 

[Frank Drebin]

I agree that it won't become a well-used method for contracts. It requires a very specific set of circumstances to make sense. The only exceptions being possibly how long teams are allowed to defer the payments; and players that are wanting to take a "hometown discount" to help their teams competitive window and are not prioritizing quick financial returns.

This is just a crazy scenario for the canes

They only had so much cap space and tried to give Jarvis as much as they could it looks like

 

[HockeyScotty]

This is just a crazy scenario for the canes

They only had so much cap space and tried to give Jarvis as much as they could it looks like

With all that said; I think Mikko Rantanen for the Avs might fit into this same mold and with the Avs contention window open, Cap constraints, and the fact the Avs just brought the former VP of Central Registry in as their Assistant GM; I could see this happening for them. Most of the Avs stars have been taking discounts for a while to create space for as much depth as possible.

Something like 8 x $12.5m but with $27m in deferred bonuses they could get AAV down to $11.5m

 

[elmaco]

Its negligible. Even if you had 10 players do it you're only saving 2m on the cap.

That "negligible" amount could be the difference in getting a last piece in.

 

[Frank Drebin]

That "negligible" amount could be the difference in getting a last piece in.

So could a double retention spot that would cost your team a fourth.

 

[Justicebork]

Elegant way to manage the cap hit of KK's future buyout

 

[LakeLivin]

What someone on the Canes board points out is that after some point a players contract total is about "keeping score" in addition to financial security. Even if the overall value for 2 contracts are the same I suspect some players would prefer to see their contract listed as $62m rather than say $59m.

Probably not a huge deal but might factor in on occasion.

 

[sepHF]

Sorry if this has been asked already, but will his deferred money count towards the cap in year 9?

 

[Nikishin Go Boom]

Sorry if this has been asked already, but will his deferred money count towards the cap in year 9?

No it counts at a discounted rate years 1-8

 

[Buttonwood]

The people who keep saying "that's a lot of work for only 500k cap savings" don't really get what I think Carolina is doing.

If they can get like 5-6 players on their team to defer salary in the same way on future contracts, that eventually becomes like $3 million in extra cap room, at a trade deadline that's like having $12+ million in extra cap.

Will there be more than 5-6 players in the league that would agree to this in a meaningful way?

 

[BrindAmours Army]

I’m more confused about signing Jarvis for eight years

Why? He is a defensively responsible winger that put up 33 goals and 67 points as a 21-22 year old.

 

[TheReelChuckFletcher]

If anyone carefully looks at how the Canes manage their cap space, there are a lot of contracts that are just a shade under Dom's model value, with the exceptions of Orlov, who they intentionally paid more in cap hit in exchange for a 2 year term, and Kotkaniemi, an inconsistent offensive player who had a poor year. Obviously this is not a perfect indicator by any means, but the Canes get a lot of mileage out of close shaves of surplus value relative to cap hit. This Jarvis extension is very much in that sort of blueprint, at least from a salary cap perspective.

 

[Discipline Daddy]

I understand that Jarvis has agreed to "take less" via the deferral compared to what many felt was his market value. He said he would take less to stay in Carolina and help the team be competitive.

What Carolina gains, besides the delayed payout; is enough cap room this year to not use LTIR money out of the gate, accrue some more space for the TDL, and have the cap space to carry a 7th D, 13th F, or 3rd G with a cap hit between $775k and $854k; which for them is extremely valuable with Freddy in net. If they gave Jarvis $7.5m AAV then they would have less than $775k space and no roster flexibility. That is a big deal for a contender.

Carolina gains several advantages in this contract. Jarvis probably does but we'll never know what the initial terms were from Carolina to compare it to. We have to assume he gains over their initial offer since he signed it.

As a new GM, Tulsky had a bit of leeway to "make his mark" and start with a strange deal like this one. Jarvis is loyal to the team and was also willing to be a guinea pig. It's a different conversation than a GM who signs one big contract one offseason and tries to pull something tricky the next; the player may balk at the change.

I'm curious of Tulsky, having now done this trick twice, will attempt a similar structuring for other big deals. The core of the team is locked in for a while, but perhaps he could attempt it in 2026 for a Nikishin extension or 2027 to extend Kochetkov.

In any case, anyone looking from the outside in can see that there is a culture building in Carolina of paying their guys, but also clearly prioritizing cap flexibility. I think it gives the team a bit of leverage to be more "Boston"-like in their cap dealings than "Toronto"-like.

 

[Arthur Morgan]

I hate you Lou, x for Marleau eh.......

well great player/contract boys

 

[Chrispy]

As a new GM, Tulsky had a bit of leeway to "make his mark" and start with a strange deal like this one. Jarvis is loyal to the team and was also willing to be a guinea pig. It's a different conversation than a GM who signs one big contract one offseason and tries to pull something tricky the next; the player may balk at the change.

I'm curious of Tulsky, having now done this trick twice, will attempt a similar structuring for other big deals. The core of the team is locked in for a while, but perhaps he could attempt it in 2026 for a Nikishin extension or 2027 to extend Kochetkov.

In any case, anyone looking from the outside in can see that there is a culture building in Carolina of paying their guys, but also clearly prioritizing cap flexibility. I think it gives the team a bit of leverage to be more "Boston"-like in their cap dealings than "Toronto"-like.

I don't know about either Kochetkov or Nikishin. This deferred salary seems the least offensive to a player in his early 20s coming off an ELC. Deferring to the late 20s or 30 still leaves plenty of time to invest and plan with that income even before your playing days are done.

With Nikishin starting his NHL career at 24 and Kochetkov signed until age 27 I doubt either would feel as comfortable with deferred income as a 22 year old might.

 

[Discipline Daddy]

I don't know about either Kochetkov or Nikishin. This deferred salary seems the least offensive to a player in his early 20s coming off an ELC. Deferring to the late 20s or 30 still leaves plenty of time to invest and plan with that income even before your playing days are done.

With Nikishin starting his NHL career at 24 and Kochetkov signed until age 27 I doubt either would feel as comfortable with deferred income as a 22 year old might.

That's probably true. Those are the only players right now who look like core material and will need a new deal in the next five years. It's possible we see it with Scott Morrow or Bradly Nadeau or somebody but they need to prove a lot before we have that conversation.

The Jarvis re-sign effectively concludes big business for the Hurricanes for the foreseeable future.

 

[cptjeff]

It’s not saving 500k on the cap because Jarvis’ contract isn’t worth the same as a traditional contract for 63/8

10m 7 years from now will still be a lot of money but it’s not nearly as good as having 10m in pocket today

Time value of money is a real thing

Time value of money is a thing for a player's investments, but it's otherwise never a thing for salary cap purposes. Year 8 dollars count exactly the same against the cap as year 1 dollars. If the NHL truly considered later dollars to be worth less, they would discount those years for every contract.

But they don't. The NHL's contract system is structured to not take the time value of money into account at all, except in this one narrow, specific loophole.

 

[Frank Drebin]

Time value of money is a thing for a player's investments, but it's otherwise never a thing for salary cap purposes. Year 8 dollars count exactly the same against the cap as year 1 dollars. If the NHL truly considered later dollars to be worth less, they would discount those years for every contract.

But they don't. The NHL's contract system is structured to not take the time value of money into account at all, except in this one narrow, specific loophole.

Yes and in this specific instance a significant amount of money is deferred for a significant amount of time

You ever notice that players almost exclusively make more money in the first half of their contract than in the second? Is because money now is worth more than money then

 

[cptjeff]

Yes and in this specific instance a significant amount of money is deferred for a significant amount of time

You ever notice that players almost exclusively make more money in the first half of their contract than in the second? Is because money now is worth more than money then

Yes, it's something players generally consider to be very helpful for investments.

But from the CBA's point of view, a year 1 dollar and a year 8 dollar have the same value. So when you're talking about how the cap hit should be lower because the later dollars aren't worth as much, that's a fallacy. Under the CBA, the time value of money is never accounted for for cap purposes other than this loophole, even though it's just as valid a concept in year 8 as it is in year 8 plus one day. Under the logic of the CBA and the salary cap, the contract is not worth any less.

From the perspective of a player's financial planning outside the realm of the CBA, it might be. Or it might not be! You're assuming guaranteed positive returns. If the market takes a dive, the deferred money could wind up worth more.

 

[Cardiac Jerks]

I’m more confused about signing Jarvis for eight years

You’re confused by a team signing a great young talent to a max length deal?