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Those Eight-Year Deals

from Pierre LeBrun of The Athletic,

You get an eight-year deal. And you get an eight-year deal. And you get an eight-year deal. And you and you and you!

Long-term deals have been in vogue the last few months in the NHL, with Charlie McAvoy, Ryan Pulock, Nick Suzuki, Mika Zibanejad and Aleksander Barkov all doing max extensions in the last couple of weeks while Brady Tkachuk did a seven-year deal.

That comes after an offseason where Colton Parayko, Sean Couturier, Andrei Svechnikov, Darnell Nurse, Adam Pelech, Brayden Point, Gabriel Landeskog, Seth Jones and Miro Heiskanen also got eight-year deals while the likes of Dougie Hamilton and Zach Hyman did seven-year max contracts as UFAs....

“Most of these contracts are for young stars just out of entry-level signed through the prime of their careers. A few are D entering free agency in their 20s who also have many prime years left,” said veteran agent J.P. Barry, who did Hamilton’s mega-deal in New Jersey. “This is the low point of the cap and it will no doubt be higher when most of these players otherwise would be entering free agency.”

As agent Todd Diamond points out, you have to separate the RFA deals from the UFA deals we’ve seen. But still, there’s max term being used in both instances right now.

more ($$$)

Filed in: NHL Teams, | KK Hockey | Permalink
 

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This is the low point of the cap and it will no doubt be higher when most of these players otherwise would be entering free agency.

I think this is the key. Teams are hedging their bets. Salaries are likely headed up with the new TV deal in place and a return of fans to the arenas. It may seem crazy handing a an $9M/year - 8 year deal to a very young player but in a couple years time I think we are going to see $12M - $15M/year contracts.

Teams have to be wise when handing these out but I don’t think there were many/any stupid deals in the bunch.

 

Posted by evileye on 10/19/21 at 09:29 AM ET

d ca's avatar

Posted by evileye on 10/19/21 at 10:29 AM ET

one billion….

You are forgetting about the NHLPA’s $1B escrow debt. The NHLPA wanted to limit escrow while making players as whole as possible for 2020-21 COVID season. They gave up an increased salary cap for the foreseeable future to do so.

Re from the NHL/NHLPA’s memo of understanding: regarding a 81.5M cap

....
The cap will remain at that amount until HRR [Hockey Related Revenue] returns to between $3.3 and $4.8 billion. If HRR goes up, then a prorated amount between $81.5 and $82.5 will become the next salary cap. Once HRR tops $4.8 billion, the salary cap will rise by $1 million per year until the escrow debt is all cleared.

So the 100% optimistic take is the cap goes to 82.5M in 2022-23 and continues to rise by $1M a year (the maximum allowed) until the NHLPA’s escrow debt is paid (which is hundreds of millions at least since there is a clause saying if it stays over $125M but less than $250M (meaning it is much larger than that number presently) the memo of understanding gets extended through 2026-27 and the salary cap for that year will be frozen at the ‘25-26 level).

That 100% optimistic take is (with 100% pessimistic in parenthesis)
2021-22: $81.5 million
2022-23: $82.5 million (at most, with the potential for no increase)
2023-24: $83.5 million (at most, could still be at 81.5 million)
2024-25: $84.5 million (at most, could still be at 81.5 million)
2025-26: $85.5 million (at most, could still be at 81.5 million)

Provided that revenue bounces back strongly in 2022-23, starting at $5.4 billion and reasonably increases year-over-year from there, NHL players can hope to pay off their billion dollar debt some time during the 2025-26 season. Because of that, the Collective Bargaining Agreement is likely to automatically extend through 2026-27, which would also mark the first season that players and teams could reasonably expect to realize a significant increase in the salary cap, with the cap linked back to actual revenue projections again for the first time since 2019-20.

source

Posted by d ca on 10/19/21 at 02:31 PM ET

TreKronor's avatar

These 7 and 8 year deals to young players make a whole lot more sense than how it was four, five years ago when you waited until a guy was in his mid to late twenties before giving him a deal; basically paying him for past performance while acknowledging his performance would be trailing off by the end of the contract.

Posted by TreKronor on 10/19/21 at 03:59 PM ET

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Paul Kukla founded Kukla’s Korner in 2005 and the site has since become the must-read site on the ‘net for all the latest happenings around the NHL.

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