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Elias Pettersson | #40 | C

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Provost Canucks Franchise Player

Provost

Posted
Posted (edited)

I was just looking deep at the currently permitted contract variability in the new CBA extension.  Folks have been talking about it as an absolute limit on the amount a contract can vary from start to finish.  I hadn't actually read the language before so didn't question it.

The ACTUAL language only pertains to FRONT LOADED contracts (where the average of the first half exceeds the average of the 2nd half).  In this flat cap/escrow world, we aren't like to see front-loaded contracts often at all.  Players and agents are going to want to push money to the end of the contract and avoid as much escrow as possible.  This is a unique situation.

CBA §50.7(a) amended to provide as follows: For all "Front-Loaded SPCs" (as defined below), the difference between the stated Player Salary and Bonuses in any immediately adjacent League Years of that SPC cannot exceed twenty-five (25) percent of the stated Player Salary and Bonuses of the first League Year of such Front-Loaded SPC. Additionally, under no circumstances may the stated Player Salary and Bonuses in any League Year of a Front-Loaded SPC be less than Page 26 of 71 sixty (60) percent of the highest stated Player Salary and Bonuses in a League Year of that same Front-Loaded SPC.

The effect of this means to me that my assumption of a bridge deal being preferable to agents could be wrong.  A max term deal allows A LOT more flexibility to push money into later years and effectively increase the take home on those dollars by 20% (once escrow is mostly out of the picture).

The "non front loaded" language just says that the raise/decrease from consecutive year to year can't be more than 50% of the lower of their salary/bonuses of the first two years of the contract.  It doesn't say anything about how any year can't be more than XX% higher or lower than any other year.

If I am reading that right, that could mean an 8 year contract with almost all paid out in years 5-8.

$4 million in year one
$4 million in year two
$5 million in year three
$7 million in year four
$9 million in year five
$11 million in year six
$13 million in year seven
$15 million in year eight
= $8.5 AAV

A structure like that escapes millions in escrow in the early compared with a bridge deal that doesn't have the ability to take advantage of backloading that much.  The agent would be betting that escrow is dramatically reduced or eliminated in the later years of the contract when all the new TV money is coming in and the players have paid back the owners what they will owe.

 

This is probably behind the Pietrangelo walking away from negotiations when his camp said that it wasn’t the AAV, but the “structure” that was the problem and St. Louis not willing to move on that.  Obviously teams will (oddly) want to front load star contracts now as they get 20% back right away and it will cost them millions less in real dollars over the contract.
 

Edited by Provost
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Junkyard Dog Canucks All-Star

Junkyard Dog

Posted
Posted
On 9/24/2020 at 9:13 PM, skategal said:

Not that I'm questioning the work ethic of our star, but anyone else wondering why there is ice at RA at this time?  And...why would he be working out there?  Isn't there any contractual issues that prevent players from interacting with coaches/using team practice facilities during the off season?  

I think Bettman said they have to treat this off-season differently in regards with training with COVID. We might not play till December/January and non playoff teams last year would have gone a long time away from quality training and hockey. 
 

It’s good to see Petey taking advantage. Hope that other players are like OJ. 

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mll Canucks All-Star

mll

Posted
Posted
19 hours ago, Provost said:

I was just looking deep at the currently permitted contract variability in the new CBA extension.  Folks have been talking about it as an absolute limit on the amount a contract can vary from start to finish.  I hadn't actually read the language before so didn't question it.

The ACTUAL language only pertains to FRONT LOADED contracts (where the average of the first half exceeds the average of the 2nd half).  In this flat cap/escrow world, we aren't like to see front-loaded contracts often at all.  Players and agents are going to want to push money to the end of the contract and avoid as much escrow as possible.  This is a unique situation.

CBA §50.7(a) amended to provide as follows: For all "Front-Loaded SPCs" (as defined below), the difference between the stated Player Salary and Bonuses in any immediately adjacent League Years of that SPC cannot exceed twenty-five (25) percent of the stated Player Salary and Bonuses of the first League Year of such Front-Loaded SPC. Additionally, under no circumstances may the stated Player Salary and Bonuses in any League Year of a Front-Loaded SPC be less than Page 26 of 71 sixty (60) percent of the highest stated Player Salary and Bonuses in a League Year of that same Front-Loaded SPC.

The effect of this means to me that my assumption of a bridge deal being preferable to agents could be wrong.  A max term deal allows A LOT more flexibility to push money into later years and effectively increase the take home on those dollars by 20% (once escrow is mostly out of the picture).

The "non front loaded" language just says that the raise/decrease from consecutive year to year can't be more than 50% of the lower of their salary/bonuses of the first two years of the contract.  It doesn't say anything about how any year can't be more than XX% higher or lower than any other year.

If I am reading that right, that could mean an 8 year contract with almost all paid out in years 5-8.

$4 million in year one
$4 million in year two
$5 million in year three
$7 million in year four
$9 million in year five
$11 million in year six
$13 million in year seven
$15 million in year eight
= $8.5 AAV

A structure like that escapes millions in escrow in the early compared with a bridge deal that doesn't have the ability to take advantage of backloading that much.  The agent would be betting that escrow is dramatically reduced or eliminated in the later years of the contract when all the new TV money is coming in and the players have paid back the owners what they will owe.

 

This is probably behind the Pietrangelo walking away from negotiations when his camp said that it wasn’t the AAV, but the “structure” that was the problem and St. Louis not willing to move on that.  Obviously teams will (oddly) want to front load star contracts now as they get 20% back right away and it will cost them millions less in real dollars over the contract.
 

 

$4 million in year one            2020/21       20% escrow
$4 million in year two            2021/22        14%-18% dependent on revenue
$5 million in year three         2022/23        10%
$7 million in year four           2023/24         6%  thereafter
$9 million in year five           2024/25              
$11 million in year six          2025/26
$13 million in year seven                    automatic extension or renegotiation  
$15 million in year eight

 

Escrow drops to 6% as of 2023/24.  It's more likely going to be a bell shape on long term deals.  Less at the start but also at the end of the contract.  Players are going to want to guard themselves from a buyout.  Don't see teams wanting to pay that high signing bonuses towards the end as it does not allow for a buyout.  Would think that it's still more advantageous for players to get the bulk of their contract during their productive years.  They will likely structure the contract in a way where a buyout does not become a better option than letting the player play out the rest of his contract.  

 

Also 2026/27 could be an automatic extension or a renegotiation.  There isn't a fix escrow for that year so could be another reason why players might prefer less on those later years.   

 

In event of an Extension Year, (i) the Escrow Percentage for the 2026/27 League Year shall not exceed 9% and (ii) there shall be no year-over-year increase to the Upper Limit as compared to the Upper Limit for the 2025/26 League Year. Subject to the limit described above, the Escrow Percentage for the 2026/27 League Year shall be set with the goal of ensuring that the Escrow Account for the 2026/27 League Year is sufficient to pay off the remaining Escrow Balance plus any estimated Overage for the 2026/27 League Year.

 

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DeNiro Canucks Hall-of-Famer

DeNiro

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Posted
16 minutes ago, Down by the River said:

Apparently Petey was out at Rogers working on some lacrosse drills. Going to have hands like Rob Schremp. Love that this kid only took like a week off before getting back to training. 

Wait till Hoglander comes over.

 

Something tells me those two will have some healthy competition with who can pull off the most skilled move!

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