The Jarvis contract. Fine until a Canadian team does it.

[Kurtz]

A hypothetical.

Leafs offer Mitch Marner 8 year extension at $10m per. He asks for $12per.

Leafs sign him for 8 @ 10, and then give him a ~$20m lump-sum bonus in year 9.

There is, as a number of folks have attempted to show, a difference in net present value of $20m in 9 years vs it being paid proportionately over years 1-8, but you can adjust the $20m value until it's NPV = $16m, or the $2m/year that Mitch's contract is short.


Would anyone have an issue with the Leafs structuring the deal this way? Would the league?

 

[Golden_Jet]

A hypothetical.

Leafs offer Mitch Marner 8 year extension at $10m per. He asks for $12per.

Leafs sign him for 8 @ 10, and then give him a ~$20m lump-sum bonus in year 9.

There is, as a number of folks have attempted to show, a difference in net present value of $20m in 9 years vs it being paid proportionately over years 1-8, but you can adjust the $20m value until it's NPV = $16m, or the $2m/year that Mitch's contract is short.


Would anyone have an issue with the Leafs structuring the deal this way? Would the league?

It will be hard to get a NPV number of $20 million in year 9.
Only one with an issue would be Marner.

 

[Brookbank]

He probably was as king about this part : "Any Canadian team trying to pull what Vegas has would forfeit a draft pick."

The NHL knows it can afford to piss off Canadian hockey fans. We will keep coming back regardless.

But for the sun belt teams and US teams in general , they can't afford to piss off these fans. So they let as much slide A's they can. And there's a history of this.

I don't understand why he did this. Presuming he's still earning big bucks on his next deal, isn't he going to get hit with a massive tax bill in the years when he gets paid his deferred money and new dollars? Multimillionaire problems for sure, just doesn't seem to make that much sense.

Maybe he finds it hard to manage his money. And he'd rather have some financial discipline imposed on him. Now, no matter how badly he spends his current money , he has this cash-flow to look forward to in the future.

 

[Frank Drebin]

To all the experts, what I am saying is, if the deal is indexed to inflation or he's somehow getting paid for loss of interest earned, then he's not losing any time value of money on the deferred bonus. Which is why he might have done it.

Your canucks are free to do this, exploit this supposed loophole, if they can find a player dumb enough to go along with it.

A hypothetical.

Leafs offer Mitch Marner 8 year extension at $10m per. He asks for $12per.

Leafs sign him for 8 @ 10, and then give him a ~$20m lump-sum bonus in year 9.

There is, as a number of folks have attempted to show, a difference in net present value of $20m in 9 years vs it being paid proportionately over years 1-8, but you can adjust the $20m value until it's NPV = $16m, or the $2m/year that Mitch's contract is short.


Would anyone have an issue with the Leafs structuring the deal this way? Would the league?

marner would likely be the only one to take issue

 

[JPT]

The NHL knows it can afford to piss off Canadian hockey fans. We will keep coming back regardless.

But for the sun belt teams and US teams in general , they can't afford to piss off these fans. So they let as much slide A's they can. And there's a history of this.


Maybe he finds it hard to manage his money. And he'd rather have some financial discipline imposed on him. Now, no matter how badly he spends his current money , he has this cash-flow to look forward to in the future.

So it's based on nothing except the feeling that the league is out to piss off Canadian hockey fans?

 

[Frank Drebin]

So it's based on nothing except the feeling that the league is out to piss off Canadian hockey fans?

Just take note that there is only one, very financially literate canadian that feels this way

 

[Golden_Jet]

So it's based on nothing except the feeling that the league is out to piss off Canadian hockey fans?

Ya, they’re not all like that fortunately.
No idea, why couldn’t have just bumped the original thread. (sans the CDN part), and ranted.

 

[Legion34]

Financial literacy is so rare….


There’s no outrage because it’s not a an advantage.

Toronto super frontloading all those huge contracts is actually a huge advantage.

Backloading contracts like this is a disadvantage.

For who? The team?

 

[Stephen]

Maybe he finds it hard to manage his money. And he'd rather have some financial discipline imposed on him. Now, no matter how badly he spends his current money , he has this cash-flow to look forward to in the future.

He could always hire a financial advisor.

 

[crowi]

I don't understand what "Canadian team" has to do with it. A deal such as this would be approved if, say, Canucks signed Boeser to one.

The interesting part is what happens if the player agrees to deferring a larger part of their deal.

 

[Frank Drebin]

I don't understand what "Canadian team" has to do with it. A deal such as this would be approved if, say, Canucks signed Boeser to one.

The interesting part is what happens if the player agrees to deferring a larger part of their deal.

The more you defer the larger pay cut you take.

100m in 8 years is worth roughly 65m today. so 12.5 x8 100% deferred (not that you could do that but for simplicity sake) is the same amount of money as a traditional 8x8 deal if it was all paid upfront (again, not that you can do that but for simplicity sake)

 

[crowi]

The more you defer the larger pay cut you take.

100m in 8 years is worth roughly 65m today. so 12.5 x8 100% deferred (not that you could do that but for simplicity sake) is the same amount of money as a traditional 8x8 deal if it was all paid upfront (again, not that you can do that but for simplicity sake)

That's true. What I mean is if a player was willing to screw himself over so badly that it would prompt the league (more likely NHLPA) make changes.

 

[Silky Johnson]

At 4% interest - $137,000 in 2032 has the same value as $100,000 today.
at 6% that number jumps to $161,000
At 8% (average S&P return) $189,000

Time value of money is a very real thing.

Yep. Take into account inflation and it looks worse.

 

[TMLBlueandWhite]

I don't understand why he did this. Presuming he's still earning big bucks on his next deal, isn't he going to get hit with a massive tax bill in the years when he gets paid his deferred money and new dollars? Multimillionaire problems for sure, just doesn't seem to make that much sense.

 

[Derailed75]

The NHL knows it can afford to piss off Canadian hockey fans. We will keep coming back regardless.

But for the sun belt teams and US teams in general , they can't afford to piss off these fans. So they let as much slide A's they can. And there's a history of this.

The NHL is the owners!!!! Why is this so hard to understand. Are you saying that the owners of the US teams gang up on the owners of the Canadian teams? Bettman works for the owners, they decide his agenda, they tell him what to do and when to do it

 

[TS Quint]

You aren't wrong. Same with LTIR stuff. Any Canadian team trying to pull what Vegas has would forfeit a draft pick.

Lets talk about Robidas Island lol

 

[mouser]

Can someone explain why it took lawyers this far into a CBA to do something like this ?

a) Deferred payment has been done before.
b) Players don’t like deferred money. A dollar today is going to be worth more than a dollar 8 years from now.
c) When interest rates were hovering close to 0% there was minimal contract AAV benefit to deferring payments. Its only since inflation took off the last few years that there’s a potential meaningful AAV change when using deferred money.

 

[HockeyVirus]

Lets talk about Robidas Island lol

Leafs aren't stashing players there to bring them back. No one sent there has played another NHL game

 

[Mrfenn92]

victim complex is strong with this one

 

[dgibb10]

A hypothetical.

Leafs offer Mitch Marner 8 year extension at $10m per. He asks for $12per.

Leafs sign him for 8 @ 10, and then give him a ~$20m lump-sum bonus in year 9.

There is, as a number of folks have attempted to show, a difference in net present value of $20m in 9 years vs it being paid proportionately over years 1-8, but you can adjust the $20m value until it's NPV = $16m, or the $2m/year that Mitch's contract is short.


Would anyone have an issue with the Leafs structuring the deal this way? Would the league?

Mitch Marner would presumably.

Why would the league care, considering the AAV of that deal would be approximately 12 mill anyway.

 

[mouser]

It isn't about the player and what he is better off with or not. Its about the team.

I guess everyone is assuming that his deferred bonus has no inflation indexing or interest adjustments ?

Are you assuming that ?

No need to assume, we already know the deferred bonus has no inflation or interest adjustment. Jarvis will be paid that exact deferred amount in year 9.

The adjustment rather is a backwards adjustment using the NPV of the deferred money at the time it’s “earned” to lower the contract AAV.

The CBA permits contracts to include deferred money with inflation growth adjustments, but Carolina and Jarvis did not use that option.

 

[mouser]

If I recall Luongo and the Canucks were the first to get bent by recapture.

New Jersey was the first team to receive a cap recapture penalty.

Los Angeles was the second team.

Florida and Vancouver tied for the third/fourth teams to receive a recapture penalty.

 

[Blueline Bomber]

Jarvis had to deferred over $10 million to 9 years down the line to save the team $500k/year

Good luck finding many players willing to put off so much money for such a relatively low reward for the team.

 

[TS Quint]

Leafs aren't stashing players there to bring them back. No one sent there has played another NHL game

They just stash players there to circumvent the cap and when guy publically says he's fine to play they remind him the other option is a buyout. Oh and look Murray is magically ready to play now that his shitty contract is over. Amazing coincidence lmao.

 

[HockeyVirus]

They just stash players there to circumvent the cap and when guy publically says he's fine to play they remind him the other option is a buyout. Oh and look Murray is magically ready to play now that his shitty contract is over. Amazing coincidence lmao.

Magically after double hip surgery and a year of recovery. Very magical