How is it circumvention? Players usually want front loaded deals to get more money earlier. That matters because of investing. So Jarvis has to wait a long time to get a big chunk of his cash.Typical NHL. Leave open a loophole on something as critical as AAV (LTIR, deferred money). Let teams exploit these loopholes repeatedly with each one incrementally creeping closer to the absurd until one team crosses the arbitrary line. Then the league comes down hard on only that one team.
I never called it circumvention. I'm just pointing out how the NHL has handled these "loopholes" in the past (e.g., singling out the Devils for the Kovalchuk contract).How is it circumvention? Players usually want front loaded deals to get more money earlier. That matters because of investing. So Jarvis has to wait a long time to get a big chunk of his cash.
It's actually kinder to the poorer teams. What really is an assault to the poor teams is front loading such as having massive signing bonuses.
Isn't that different though, in that the idea is that 1 million aav years at the end were intended to be canceled out by retirement? With this deferral the numbers will add up.I never called it circumvention. I'm just pointing out how the NHL has handled these "loopholes" in the past (e.g., singling out the Devils for the Kovalchuk contract).
It should still count against the capThis makes sense.
For example if Draisaitl signed a defferred contract for a total of 116M with aav of 13.5M, that would be 8M in bonuses that wouldn't be paid until the 9th year.
8M with a 5% increase each year would equal 10.27M in year 9. So the player would essentially forfeit 2.27M if you compared to if it was paid up front.
Having said that, I'm not sure that's a fair comparison because it's a compromise between the two sides and basically treated as an extra year (which wouldn't be front load anyways).
It should still count against the cap
Also takes a player wanting to delay moneyOilers should be alllll over this.
A delay is more appealing than a discount though.Also takes a player wanting to delay money
I assuming it does. I can’t see how else it would be accounted for under the salaries and revenue formula.The bonus in the 9th year should count as dead cap in year 9.
This is different than those front loaded deals. Those deals were structured to lower the cap using tag-on years that the player would never play. The money in these deals will be paid. It is just deferred. Teams are actually being hit with the full value of the money they are spending in today's dollars. That is if the Oilers agree to give Draisaitl $1M ten years from now, the Oilers are charged the equivalent of the present value of that $1M on the cap despite the fact that Draisaitl won't get any of it until 10 years from now. IT's also a good time for this move from the team's perspective as current high interest rates drop the present value of the money more than they would have a few years ago.I never called it circumvention. I'm just pointing out how the NHL has handled these "loopholes" in the past (e.g., singling out the Devils for the Kovalchuk contract).
There is no cap hit in year 10. The cap is all included in the original deal. But it is lower because the money is counted at the present value.You'd be stupid to not jump all over this. Who cares about cap hit in year 9, it's likely once this era is done, the Oilers are looking at a 3-4 year rebuild minimum anyway against a cap that will probably be $110+ million.
There is no cap hit in year 10. The cap is all included in the original deal. But it is lower because the money is counted at the present value.
I was more commenting on how the Blackhawks used the same strategy to lower the cap hits of Keith and Hossa before the league slammed the door on the Devils and Kovalchuk.This is different than those front loaded deals. Those deals were structured to lower the cap using tag-on years that the player would never play. The money in these deals will be paid. It is just deferred. Teams are actually being hit with the full value of the money they are spending in today's dollars. That is if the Oilers agree to give Draisaitl $1M ten years from now, the Oilers are charged the equivalent of the present value of that $1M on the cap despite the fact that Draisaitl won't get any of it until 10 years from now. IT's also a good time for this move from the team's perspective as current high interest rates drop the present value of the money more than they would have a few years ago.
These are complex contracts that will require a sophisticated player to understand what they are getting. The good news for the Oilers is that both Leon and McDavid seem very sophisticated in term of the business side and both have enough of a nest egg that deferral will not impact there life style one iota.
There has to be a condition that any deferred money counts against the salary cap (50%of HRR) at some point. It would be counterintuitive to believe otherwise. Otherwise that’s a loophole bigger than the LTIR fiasco for the owners to drive their cars through.Can you not just defer all the money to the 9th year? Leon we'll give you a $200M contract but you get all your money after your contract is up.
Nope. You don't want to mess around with this. If drai and bowman are serious about this then they get it out of the way in next few weeks.What so funny?
They might not even sign him until closer to playoffs or even let him play in playoffs as a pending UFA. Draisaitl with a NMC holds all the cards.