NHL Contract Talks

Bonjour again!!

Let’s take a look at a trade that just happened a few minutes ago.

Klim Kostin was just traded to Edmonton, from Saint-Louis. Why did Edmonton not claim him for free on waivers two days ago instead of trading away a player?

Here’s the reason. Kostin cleared waivers, which means the team that has him in their organization has up to 30 days and/or 10 games played in the NHL to send him down without him requiring to clear waivers.

So if they claimed him on waivers, they would’ve had to replace him on waivers right away to send him down to Bakersfield in the AHL.

As of now he will play in the AHL and Edmonton can push his waiver requirement to later. Let’s specify that if he was recalled but played less than 10 games and/or spent less that 30 days in the NHL, Edmonton can send him down without waivers until he meets these requirements🤝

Here’s a few things and my take about Jason Robertson’s contract!

He signed a 4-year deal at an annual averaged value worth 7.75M$. The more that the impasse remained, the more I was led to believe that the dispute was based off how many years the contract should be.

I think that Robertson wanted to sign for 5 years, to become unrestricted and get more money in his next deal with the cap increasing. As we saw recently, the salary cap is set to rise up to 92M$ in 4 years, inciting star players to sign shorter contracts bringing them to 2025-26 and get more money after that.

Instead, the Stars opted for 4 years to keep him restricted. This contract will give him the right to arbitration and offer sheets from other teams, and to a 9.3M$ qualifying offer, since teams can’t issue a QO worth more than 120% of the AAV, when the base salary in the last season of the contract is higher than that range.

At the end of the day, it was a great negotiation process between Robertson’s agent and the Stars, leading to a win-win situation for both parties🤝

The Blue Jackets gave a four-year contract worth 4M$ annually to Erik Gudbranson, whose highest scoring season was last year (6G, 11A, 17PTS) with Calgary, after 11 seasons in the NHL.

Let's analyze this contract. When we look at Gudbranson, we see a big defenceman, with decent NHL experience. Despite his basic statistics (Goals, Assists, Points) not being as high to justify his salary, he was signed mainly because of his defensive tenure. He can spend lots of minutes on the ice every game and he is a reliable player in critical moments for a team.

On the other side, he is able to put up some points and he is a good second pair defenceman. Now with the management side...

The market for defencemen was a bit modest this summer. On the restricted side we have some incredible players, but no team will realistically submit an offer sheet. Therefore, it is an advantegeous market for players to pass GO and collect their due. Columbus was desperately in need of a good second-pair right-handed defenceman. The market price for a second-pair defenceman turns around 3M$-3.5M$, but a little subtelty that many don't notice is that the proportion of RHD's is way lower than LHD's. Only around 40% of the defencemen are right-handed in the NHL, making it harder to have one of quality on your team. Instead of trading for a player and loosing assets, you can get one for free and sign him to a contract at your own terms.

Furthermore, his contract is decent, since he's only 30 years old. The money is divided almost evenly throughout the contract, making it easier to buyout if needed in two years. 🤝

Why did John Klingberg, a free agent in demand all over the league, decide to sign for only a year?

As we now, many teams that were looking to sign him long-term are teams aiming to become cup contenders in the next few years. But there is one issue... The salary cap is flat for another year and salaries that were expected to dilute with a cap expansion became a hustle for certain teams aiming for the cup.

Therefore, with a potential weak market for right-handed defencemen again next summer, it was better for Klingberg to bet on himself and sign for one year only at his market value and hope for teams to work some money away from their books to pay him long term next summer. In addition to that, the cap will start boosting sooner than later with "Hockey Related Revenues" expected to multiply dangerously as the NHL is expected to sell sponsorship deals for logos on jerseys and many other things🤝

Today I'll explain why Cayden Primeau will be on the Montreal Canadiens' Pro Roster permanently within the next four years, due to a particularity of the Collective Bargaining Agreement.

As of today, Primeau is a 22 year-old Restricted Free Agent, with three professional seasons under the belt and 18 NHL games played. He is set to become an unrestricted free-agent at the age of 27 or after playing seven professional seasons (one or more game in NHL, AHL, ECHL or Europe, since he signed his ELC at 20).

But, Primeau could become unrestricted by the age of 25, if the Canadiens don't respect a certain clause to keep him under his restricted status.

If, by the age of 25, a goalie under contract with an NHL team hasn't played at least 28 NHL games (more than 30 minutes played per game), after completing at least three professional seasons, he will become an unrestricted free-agent, even if he is only supposed to be unrestricted at 27.

This is why the Canadiens will have to let him play at least 10 games in the next four years or else, they will lose his restricted status and other teams will be able to sign him for free🤝

Let's discuss Mike Hoffman's Professional Try-Out given by the Blues in 2020. Stephane Leroux, from RDS dug out Hoffman's PTO with the Blues to criticize his $4,500,000 AAV over 3 years given by Marc Bergevin.

He didn't sign a PTO in a context where the team wanted to evaluate him before signing. It was due to the Blues' cap situation. As I explained in previous posts, teams get a 10% cap extension to spend during the offseason and if they go over, they have penalties. In St-Louis' case, they had two LTIR eligible players in Tarasenko and Steen, potentially freeing up to $13,250,000 in LTIR cap ($7,500,000 and $5,750,000 respectively). Another reminder that ALL contracts are on the cap during the offseason. If they were to go over the 10% limit, they would have to place them on LTIR during the offseason and have their relief recalculated at the start of the year, potentially causing troubles if they are still above the LTIR relief amount.

Instead, they waited for the first day of the season, to send down players and recall some to get as close as they can to the cap set to $81,500,000 that year, to get the maximum relief they could out of the $13,250,000. After doing so, they signed Hoffman to the one-year/ $4,000,000 AAV deal they previously negotiated, as well as Vince Dunn to a one-year/ $1,875,000 AAV. Furthermore, they anticipated Tarasenko to return during the season, so the total of both contracts is just above Steen's cap hit of $5,750,000 (total of $5,875,000) staying on LTIR all year, for them only having to send down one contract to be cap compliant.

This text is no means to criticize anyone, it just sheds extra light on the situation. Hoffman's performances were not what the Canadiens expected when they signed him to an AAV of $4,500,000 but a Professional Try-Out isn't a valid argument, in this case where the Blues managed their tight cap effectively🤝

Why did the Panthers trade Huberdeau in return of Matthew Tkachuk?

Well Huberdeau is entering his last contract year before becoming an unrestricted free-agent in July of 2023.

There were some rumours stating he wanted to leave the Panthers after his deal.

Therefore, the Panthers were definitely looking to shop him around in return of a similar player and not sell him at the trade deadline at a potential rental price.

Furthermore, his No-Movement Clause was replaced by an Eight-Team No Trade Clause on July 1st, potentially making trades at the deadline more difficult.

Trading Huberdeau for a player wanting to sign in Florida like Tkachuk is definitely a win-win. Let’s add that Tkachuk’s pricetag was high, due to the fact that he was leaving as a “sign and trade” player🤝

Today we talk about how to achieve performance bonuses and their cap implication.

These bonuses are different than signing bonuses. They can only be given to players on entry-level contracts, to players signing contracts after 35 years old or players signing contracts after coming back from long-term injuries.

They are divided into two categories, which are the "A" Bonuses and the "B" Bonuses, respectively associated to individual performances and league-wide performances/awards.

As the contract is signed, a maximum of $3,500,000 per year in performance bonuses can be included to the contract. A maximum of $1,000,000 can be included as "A" Bonuses and $2,500,000 as "B" Bonuses. Each "A" Bonus is worth $250,000 meaning that a player can only get paid for hitting four of them each year, even if he was to hit six of them.

As for "B" Bonuses, if a player finishes top-10 in goals, assists, points or points per game/ a goalie finishes top-5 in G.A.A, %SV or wins, he earns the full $2,500,000. Players finishing in top-3 or top-5 standings for various trophies will also earn the full amount, as well as being on the 1st or 2nd All-Star Team

No what if a player has less than $3,500,000 in potential bonuses? Well.. The first million will be "A" Bonuses and the rest is "B". Furthermore, if the PB's included are less than the $1,000,000 limit for "A" Bonuses, for example $560,000 and a player achieves three categories of "A", then the first two will pay $250,000 each and the third one will pay $60,000.

As mentioned in Slafkovsky's post, all team benefit from a 7.5% cap extension to fit their potential performance bonuses onto their cap. If a bonus is achieved and a team is unable to fit the amount under this year's cap (due to LTIR or being too close to the cap), the amount will be transferred to next year's cap as dead money🤝

Let's analyze why Juraj Slafovsky's contract could become a nightmare for the Canadiens if they have a player on Long-Term Injury List.

He signed an entry-level contract of three years, with an annual cap hit of $950,000. He will earn $95,000 in signing bonuses and $855,000 in base salary annually, since a player under ELC can't earn more than 10% of his annual cap hit in signing bonuses. Signing bonuses are paid on July 1st of every year and the base salary is the salary the player earns during the year.

Slaf is also eligible to earn performance bonuses, due to his ELC. They can go up to $3,500,000 a year, bringing his annual average value at $4,450,000.

Now the complicated part... If he starts the season on the Canadiens' roster with a contract on LTIR, his contract will count on the cap under the amount of his cap hit worth $950,000. If he starts in Laval and he is recalled during the year, the Canadiens will need to have space for his AAV of $4,450,000 to recall him. I hear you all asking where did the performance bonuses disappear?

Well.. Teams are allowed to go 7.5% over the cap ($6,187,500) to include potential performance bonuses during the season. However, at the end of the year, if any bonus has been achieved by the player, the team has to have the cap space to include the bonuses or else they will be included into next year's cap as "carryover bonus overages" and the potential bonuses that weren't earned simply disappear.

So, basing our hypotheses on the Canadiens trading salaries at the deadline, if Slafkovsky was to earn a good chunk of his PB's, the Canadiens would be able to fit them under this year's cap.

On the other side, when a player is sent to LTIR, teams obtain cap relief equivalent to their AAV. Taking Carey Price's contract, MTL would get $10,500,000 in salary relief. However, the 7.5% allowance doesn't exist under LTIR cap. Therefore, the team needs to have cap space equivalent to the player's cap hit + potential achievable performance bonuses to recall him, hence why $4,450,000. Furthermore, teams functioning under LTIR are above the cap limit, meaning that they need the PB's to fit under the cap or else they become carryovers🤝

Let's take a deeper look into the Blackhawks' rebuild.

In less than a week, they traded two young players of their core, left two unrestricted and bought out two other guys. BOOOM THIS JUST HAPPENED.

Kyle Davidson was appointed the general manager position of the Hawks in March and like every new GM, he wanted a team completely in his image. He opted for a full rebuild, since his two leaders (Toews and Kane) are out of contract by next summer. He simply decided not to build his new core around DeBrincat, Dach, Kubalik and Strome.

These four gentlemen are on their way to get paid. Kubalik, Strome and Dach will earn between 3M$ and 4.5M$ each this summer and DeBrincat will ask around 7M$ next summer. Signing them is buying you time to ''escape'' a rebuild, but leads you nowhere. Instead, they drafted Nazar, Korchinski, Rinzel and others, who will develop around a new core composed of Seth Jones (signed long-term already), Reichel (still paid 925K$) and Kurashev (signing a bridge contract this summer).

Some think that they could have signed some of their young guys to one-year contracts and trade them at the deadline while retaining salary, but these guys will want multi-year contract and the Hawks want to leave the dead cap space to retain half of Kane's remaining year in a trade before the season starts or at the deadline. Furthermore, the few guys they will signed as free agents on one-year contract (Domi and Athanasiou) will be assets to acquire draft picks at the deadline as well.

So instead of filling up their salary cap from the start of their rebuild, they will develop their future core at lower salaries, while seeking free agents on a one-year contracts and trading for bad contracts with a year or two left to them from other teams to reach the salary floor and they will ask for a decent compensation to proceed (young prospects or picks). By doing so, they can replenish their prospect pool and surround their prospects with veterans and become a winning-team again🤝

Today, let's discuss about "Restricted Free Agents", more specifically about arbitration.

These 3 notable gentlemen (Dubois, Laine and Tkachuk) did not file for salary arbitration before the deadline set to July 17.

First of all, both the players and teams can file for arbitration. Keep in mind that if a player files for arbitration, his qualifying offer is voided + he can no longer receive an offer sheet from other teams. However, they can still negotiate a contract with their team, until the time of the hearing. Furthermore, if a club elects arbitration, they can only do so twice in a singular offseason + a player can only be taken to arbitration by a team once in his career.

In Tkachuk's and Laine's cases, they didn't file for arbitration due to their potential high-paying contracts. An arbitrator would certainly give them less money than what they ask for. Furthermore, a player of their stature is definitely more propitious to receive an offer-sheet from another team, while an arbitration case would take their right to sign an offer-sheet away. Both of them are also a year away from becoming unrestricted free-agents, so they could also decide to accept their one-year QO and become unrestricted next year to sign elsewhere, if they don't feel that the team is serious about keeping them long-term.

As for Dubois, it's a bit more complicated. He clearly stated his desire to play in Montreal, therefore putting a lot of pressure on the Jets' management. Him not filling for arbitration is simply explained by the fact that he would be signed to a contract with the Jets after the procedures, which he doesn't want to. As of now, the Jets could file for arbitration in their second window of opportunity. However, this process would only buy them time, as Dubois would become an RFA again next summer, without the possibility for the Jets to elect arbitration against Dubois, since he would've went through is only available club-elected arbitration the summer before. Pierre-Luc Dubois might just accept his offer-sheet and hope for a trade before/during the season, since it would be a one-year contract or sit out and play in Europe until he is dealt away from Winnipeg 🤝

There it is. Jeff Petry has been dealt, alongside Ryan Poehling, to the Pittsburgh Penguins for Michael Matheson and a 4th round pick (2023). Let's agree on one thing, this trade didn't bring much value to the Canadiens, but it brought the most value at the moment.

In all honesty, I overpriced his value myself, but the return and the subsequent moves are not bad either. Starting with the age of both players, Matheson is 6 years younger. Going to statistics, Petry has a slight advantage on Matheson, but an average of 23 points in 6 NHL seasons is still decent. Now contractwise, Matheson's contract has an additional year in comparison to Petry's contract, but at a lower cap hit by 1.375M$, in addition to being more manageable in the eventuality of a buyout, as the money is divided more evenly throughout the deal. Furthermore, getting a 4th round pick for Ryan Poehling and getting an extra 750K$ is decent, as they would've probably lost him on waivers for nothing next year. This created enough space for them to re-sign Rem Pitlick at a decent price, who is clearly an improvement on Ryan Poehling. Lastly, keep in mind that the Canadiens didn't retain any salary on Petry's contract, which was almost impossible to think about not that long ago.

This move obviously hides something more, due to the Canadiens having to sign Kirby Dach and them being short on money. When we look at what the Sharks got for Burns and Vegas for Pacioretty, this situation was managed correctly by Kent Hughes.🤝