Player Discussion Leon Draisaitl's next contract

[McBooya42]

Why wouldn't Draisaitl accept this? Those deferred bonuses accrue interest. It's a sound investment for his future earnings and it helps his team's chances competitively over the life of the contract.

Sign Draisaitl for the full 8 years with deferred bonuses. Do the same for Bouchard; full 8 years with deferred bonuses.

The window has opened so the Oilers can keep their stars. The opportunity has arisen giving the Edmonton Oilers a fighting chance at winning a cup against the tax-free American teams as well as the American teams that repeatedly circumvent the cap system.

If they don't take advantage of deferred bonuses you know there is something fishy about this league.

It would appear to be a solution that fits our needs for sure. Other teams too for that matter. We just happen to have those 3 that need to be signed, and they are in the top lists of talent in the league. This could allow us to really get some help at the deadline, or even before.

It only makes sense for the three of them, as it would be a win win (as long as they ok with the actual deferral). As you said though, it collects interest so really is an investment. A different thinking process for contracts that wouldn't work for most, but for some may be a smart move.

 

[CROTT]

delete

 

[Fourier]

I know its not 100% legit, but check the notes section on puckpedia below the contract table says the defered money will be split up after the contract is over and count to the cap in those seasons.

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It don't see where it says that there will be a cap hit in year 9. In fact the stuff you circled contradicts that explicitly.

 

[McJadeddog]

It would appear to be a solution that fits our needs for sure. Other teams too for that matter. We just happen to have those 3 that need to be signed, and they are in the top lists of talent in the league. This could allow us to really get some help at the deadline, or even before.

It only makes sense for the three of them, as it would be a win win (as long as they ok with the actual deferral). As you said though, it collects interest so really is an investment. A different thinking process for contracts that wouldn't work for most, but for some may be a smart move.

Does anybody know what interest is paid out on the deferred salary? Don’t think I’ve seen that anywhere that I can recall.

Edit: I see another poster saying it doesn’t accrue interest, which makes more sense

 

[Fourier]

Does anybody know what interest is paid out on the deferred salary? Don’t think I’ve seen that anywhere that I can recall.

Edit: I see another poster saying it doesn’t accrue interest, which makes more sense

It's not really accruing interest in the sense that the deferred amount being quoted is the actual amount that is paid, but there is an interest component in the sense that the team is responsible for the present value of the deferred payment discounted by a specified interest rate. So in this sense, the present value is earning interest to make the full deferred payment.

To illustrate...Suppose that a player has 1 dollar deferred 8 years. This is discounted at a rate that is roughly 5.5% these days. The present value of that dollar is $.652. This means that the team is effectively putting aside 65.2 cents now and investing it at an interest rate of 5.5% to pay the player $1 in 8 years. It is this 65.2 cents that the team is charged against the cap.

 

[Reasonable Oil Fan]

I am still stunned that this strategy is just now coming to light.
We better use this on the draisaitl Bouchard and mcdavid contracts to the fullest extent
I suppose the players will have to agree to it but it’s wild that AAV no longer equals total dollars divided by years anymore

 

[McJadeddog]

I am still stunned that this strategy is just now coming to light.
We better use this on the draisaitl Bouchard and mcdavid contracts to the fullest extent
I suppose the players will have to agree to it but it’s wild that AAV no longer equals total dollars divided by years anymore

It’s obviously to the advantage of the team and takes the player to agree. I’m actually not sure why a player would agree to it. Time value of money, assuming they are being responsible with their money and investing it, is worth quite a bit. The only one that makes sense that I have heard is the tax strategy one of moving to lower tax area after the contract is over.

 

[Soundwave]

It’s obviously to the advantage of the team and takes the player to agree. I’m actually not sure why a player would agree to it. Time value of money, assuming they are being responsible with their money and investing it, is worth quite a bit. The only one that makes sense that I have heard is the tax strategy one of moving to lower tax area after the contract is over.

That's exactly why the player would agree to it. That's exactly what Ohtani is doing.

 

[Zerotonine]

Training camp is what 2 weeks away? They sure are cutting it close before the Draisaitl camp shuts down talks for the season.....

 

[Soundwave]

Training camp is what 2 weeks away? They sure are cutting it close before the Draisaitl camp shuts down talks for the season.....

For all parties involved right now they should both be spending time exploring this deferred money concept.

If utilized correctly, it could make Draisaitl a lot more money and I think Katz has a ton of investment advisors that could walk Leon through exactly how to do it.

Besides MacKinnon did not sign his extension until Sept. 20th of that year. There's still time.

 

[Zerotonine]

For all parties involved right now they should both be spending time exploring this deferred money concept.

If utilized correctly, it could make Draisaitl a lot more money and I think Katz has a ton of investment advisors that could walk Leon through exactly how to do it.

Besides MacKinnon did not sign his extension until Sept. 20th of that year. There's still time.

For all we know the deal could already be done to. Just waiting for Leon to be back in edmonton for prss conference to announce it

 

[Soundwave]

I mean I can give another example of how you could leverage this out the wazoo ...

The Oilers agree to a 14 million contract PLUS 750,000 extra per year (so 14.75). Draisaitl agrees to defer almost all his salary, like Shohei Ohtani, he defers so much that the end cap hit is like 9.8 million.

Why am I adding 750,000? Because it's 5% of 14 million. Why is that important? Hang on to your butts for a second. That 5% extra per year would basically allow Draisaitl to borrow the 14 million equivalent while waiting for his deferred money, effectively the Oilers are covering the interest cost of Draisaitl borrowing against his contract.

By then deferring almost almost all his money, Draisaitl also can then borrow interest free basically on his 14 million/year and invest that money in the here and now.

When he retires? He then cashes in his entire NHL earnings, but instead of paying 45-48% tax, he sets for a year or two his residence to say Switzerland (right next door to his home country of Germany) and pays even less tax, taking home far more money than he would have otherwise.

 

[fuswald]

I mean I can give another example of how you could leverage this out the wazoo ...

The Oilers agree to a 14 million contract PLUS 750,000 extra per year (so 14.75). Draisaitl agrees to defer almost all his salary, like Shohei Ohtani, he defers so much that the end cap hit is like 9.8 million.

Why am I adding 750,000? Because it's 5% of 14 million. Why is that important? Hang on to your butts for a second. That 5% extra per year would basically allow Draisaitl to borrow the 14 million equivalent while waiting for his deferred money, effectively the Oilers are covering the interest cost of Draisaitl borrowing against his contract.

By then deferring almost almost all his money, Draisaitl also can then borrow interest free basically on his 14 million/year and invest that money in the here and now.

When he retires? He then cashes in his entire NHL earnings, but instead of paying 45-48% tax, he sets for a year or two his residence to say Switzerland (right next door to his home country of Germany) and pays even less tax, taking home far more money than he would have otherwise.

So now we are up to 14.75! Do I hear 15 million?

 

[Soundwave]

So now we are up to 14.75! Do I hear 15 million?

The cap hit would be 9.8 million or so. You could probably even push it lower, on Puckpedia I stopped once it got to about 9.8.

You could do something similar for Bouchard also.

This would effectively also wipe out the Nurse overpayment with these savings.

 

[Senor Catface]

nvm

 

[KCC]

Draisaitl is bending the Oilers over. Dry.

Yup. He wants to get paid and of course he deserves a jump in salary but man, between 14+ mill for him and then McDavid and Bouchard next. EDM needs to win a cup in the next few seasons while they can. lol

 

[Senor Catface]

Yup. He wants to get paid and of course he deserves a jump in salary but man, between 14+ mill for him and then McDavid and Bouchard next. EDM needs to win a cup in the next few seasons while they can. lol

Ignore him. He's a Jets fan who gets banned from posting on our board every few months.

 

[Broberg Speed]

The cap hit would be 9.8 million or so. You could probably even push it lower, on Puckpedia I stopped once it got to about 9.8.

You could do something similar for Bouchard also.

This would effectively also wipe out the Nurse overpayment with these savings.

It's the only way the Oilers will win a Cup.

I want to keep all of our stars long term. There is no other choice unless you want to go into a full rebuild. That means another decade of darkness.

Yup. He wants to get paid and of course he deserves a jump in salary but man, between 14+ mill for him and then McDavid and Bouchard next. EDM needs to win a cup in the next few seasons while they can. lol

Without our stars we don't stand a chance of ever winning a Cup.

Utilizing the current economic model no Canadian team will ever win a Cup.

Deferred bonuses are the great white hope. Even with deferred bonuses helping the Oilers over the next two seasons with regards to locking up our stars, Bettman and the Board of Governors will find a way to sabotage any Canadian success. They'll grow the game some more.

 

[Soundwave]

Ignore him. He's a Jets fan who gets banned from posting on our board every few months.

He was whooping it up and posting like a jackass when the Oilers were in their slump early in the season hoping McDavid would be hurt for the season, lol he shut up real fast and wasn't then seen again for months, his rear end probably got awfully tight in the playoffs, lmao.

 

[AlbOilFAN]

Training camp is what 2 weeks away? They sure are cutting it close before the Draisaitl camp shuts down talks for the season....

Draisaitl is back I think this weekend or early next week. I’m pretty sure we’ll hear something…
Or he’s not getting the same gift like CONOR did when he gets married, from Katz.

 

[bellagiobob]

Training camp is what 2 weeks away? They sure are cutting it close before the Draisaitl camp shuts down talks for the season.....

I think the start of the regular season was the mentioned cutoff, so lots of time left.

 

[Soundwave]

If the Oilers are serious about going the deferred salary route, 2 weeks is plenty of time for Katz' business team and the Oilers capologist to present an offer to both Drai and Bouchard camps where they are walked through step by step exactly how a deferred contract could work out for them and given options on it.

 

[Inf123]

Draisaitl is back I think this weekend or early next week. I’m pretty sure we’ll hear something…
Or he’s not getting the same gift like CONOR did when he gets married, from Katz.

what did he get him?

 

[Fourier]

If the Oilers are serious about going the deferred salary route, 2 weeks is plenty of time for Katz' business team and the Oilers capologist to present an offer to both Drai and Bouchard camps where they are walked through step by step exactly how a deferred contract could work out for them and given options on it.

There are a LOT of possible options!!!!!!

 

[brentashton]

For all we know the deal could already be done to. Just waiting for Leon to be back in edmonton for prss conference to announce it

Hmmmph.

Well now I’m disappointed.
I thought all posters here were insiders with their info!!