[Signing] Sabres re-sign Ryan O'Reilly

[WHL rocks]

Never mind it's heavily front loaded.

10. 8, 7.5, 5, 5, 5, 5

Makes it easier to trade later on when the young kids are ready and ROR is declining.

Just read Freidmans tweet and according to him these numbers are bonuses and he will actually only make 1 mill a year. Very intriguing

It just means he gets all but $1 million per year upfront, before the NHL season begins and the $1 million is receieved in installments. Makes it so ROR has the money all at once , upfront so he can invest it and it can earn him more money.

Also its believed by some to be escrow free so that's a big thing for the player. There is no clarity on this subject that I've come across. If true this is a bad trend because eventually most UFA's will demand contracts structured this way.

[LoudProudNuckFan]

Don't get the O'reilly love

[UFCanuck]

Semin got $7M per season and O'Reilly's much better overall.

[WHL rocks]

Yep. Just did the math. You and CanucksLegacy are right. I'm much less happy now... lol

Why do you keep repeating you made a arithmetic error. It seems like every 3rd post in this thread is about a math error.

Fact is you did not do any math nor do you need to in the matter. You didn't know (or forgot) the cap is AAV for length of contract. This is not a math error this is a knowledge error. You don't need to do any math for this.

Well i'd say your point is still valid, the contract could be attractive to some teams. To my knowledge, the signing bonuses are paid by the Sabres since they were the ones who "signed" him to his contract. Although the cap hit is quite high, a team would only have to pay $1m salary (actual cash) each year if they acquired O'reilly.

For examples sake, say Canucks acquire him next season, his cap hit is 7.5m but the Aquillinis would need to pay him $1m each year for the remainder of his contract. More attractive to owners (who pay salaries) than it is to GMs (who need to fit cap hits under the limit).

I don't believe that's how it works. Bonus is paid on July 1st of every year. The team who has rights to ROR pays the bonus money. It's just structured that way so the player gets most of his money in advance so he can invest it and earn interst/profit from it.

If the Sabres traded him on July 2nd his bonus for the coming year would already be paid and the new team would only pay $1 mill salary for that 1 year. So possibly his trade value could be increased if Sabres were to negotiate this detail in a potential trade.

[SabreFan1]

Why do you keep repeating you made a arithmetic error. It seems like ever 3rs post in this thread is about a math error,

Fact is you did not do any math nor do you need to in the matter. You didn't know (or forgot) the cap is AAV for length of contract. This is not a math error this is a knowledge error. You don't need to do any math for this.

I would have put 2 and 2 together had I done the math along with remembering that contract hits are AAV. The way I was talking about it, all of the numbers made sense in my mind at the time I was posting. Once I realized my double error I made the edit statement and calmly figured out why the contract was structured the way that it was.

[WHL rocks]

I would have put 2 and 2 together had I done the math along with remembering that contract hits are AAV. The way I was talking about it, all of the numbers made sense in my mind at the time I was posting. Once I realized my double error I made the edit statement and calmly figured out why the contract was structured the way that it was.

But you did not make a math error you keep talking about. I went back and read your posts a 2nd time. There is no match error anywhere. And there is none to be made in this case

You don't need to do any math for this so how can you even make an math error. Cap is the AAV. The cap hit doesn't go up or down regardless of salary so you don't need to do any math. You claimed that due to the SPC being front loaded and bonus laden cap hit becomes less every year....... This is not a math error. This is a knowledge error but you keep making post after post claiming math error.

Bonuses are less heavily taxed than salary so that helped bring his demand down from 8M to 7.5M.

With an incredibly front loaded bonus laden contract where a cap hit becomes less every year, he could easily be traded after 3 years. His new team would then only have to pay out of pocket 1 Million per year and his actual cap hit would be pretty low.

GMTM knows his sh*t people!! It's cheating/playing the system, but it's perfectly legal under the rules.

*edit* Well CanucksLegacy just rained on my parade and proved me wrong with math. I take my posts back. ROR is overpaid.....

Heck you even thought TM had somehow figured out a loophole to cheat the system. Not a math error, anything but........

[CanucksLegacy]

Why do you keep repeating you made a arithmetic error. It seems like every 3rd post in this thread is about a math error.

Fact is you did not do any math nor do you need to in the matter. You didn't know (or forgot) the cap is AAV for length of contract. This is not a math error this is a knowledge error. You don't need to do any math for this.

I don't believe that's how it works. Bonus is paid on July 1st of every year. The team who has rights to ROR pays the bonus money. It's just structured that way so the player gets most of his money in advance so he can invest it and earn interst/profit from it.

If the Sabres traded him on July 2nd his bonus for the coming year would already be paid and the new team would only pay $1 mill salary for that 1 year. So possibly his trade value could be increased if Sabres were to negotiate this detail in a potential trade.

FireGillis and shazzam also mentioned it earlier (re: signing bonus). My mistake, wasn't entirely sure.

[SabreFan1]

But you did not make a math error you keep talking about. I went back and read your posts a 2nd time. There is no match error anywhere. And there is none to be made in this case

You don't need to do any math for this so how can you even make an math error. Cap is the AAV. The cap hit doesn't go up or down regardless of salary so you don't need to do any math. You claimed that due to the SPC being front loaded and bonus laden cap hit becomes less every year....... This is not a math error. This is a knowledge error but you keep making post after post claiming math error.

Heck you even thought TM had somehow figured out a loophole to cheat the system. Not a math error, anything but........

You're like a dog with a bone. I said that I hadn't considered the AAV rule in my previous post.

Here is where I made my math error that CanucksLegacy pointed out to me.

Signing bonuses: 10 + 8 + 7.5 + 5 + 5 + 5 + 5 = 45.5 then add the 1m salary x 7 years = 52.5m.

52.5m over 7 years = 7.5m caphit.

I hadn't added all of the numbers correctly. Had I done that correctly myself before CanucksLegacy pointed it out, and saw the descrepency, I would have realized that I was dead wrong which would have eventually lead to me smacking myself in the forehead after realizing how I originally screwed up regarding the AAV of the cap hit which he pointed out as well.

[SabreFan1]

FireGillis and shazzam also mentioned it earlier (re: signing bonus). My mistake, wasn't entirely sure.

The mistakes were mine, not yours. That's why I made sure to add in those edits pointing it out. I just can't get WHL rocks to see where my original mistake, with the yearly bonuses/salary was. I added it all up quickly in my head and didn't realize the numbers didn't add up until you pointed it out.

[SabreFan1]

*double post*

[WHL rocks]

FireGillis and shazzam also mentioned it earlier (re: signing bonus). My mistake, wasn't entirely sure.

I wonder if/how this affects escrow. I read up on it a while back but there wasn't real clarity. Escrow isn't calculated and deducted until after the regular season starts. They make adjustments every quarter I believe. It doesn't seem like bonus money is subject to escrow but it does get counted towards player's share of revenue.

So if escrow is 12% he would only pay $120k on the $1 mill salary instead of $1.32 million on the $11 mil he would make next year.

At the end player share is tied to revenue so if they don't take money off ROR but his money still counts towards players share of revenue than all the other players combined take the hit and pay ROR's escrow.

[SabreFan1]

I wonder if/how this affects escrow. I read up on it a while back but there wasn't real clarity. Escrow isn't calculated and deducted until after the regular season starts. They make adjustments every quarter I believe. It doesn't seem like bonus money is subject to escrow but it does get counted towards player's share of revenue.

So if escrow is 12% he would only pay $120k on the $1 mill salary instead of $1.32 million on the $11 mil he would make next year.

At the end player share is tied to revenue so if they don't take money off ROR but his money still counts towards players share of revenue than all the other players combined take the hit and pay ROR's escrow.

Now I have some studying of my own to do. I hope that's not the case or ROR is going to have the whole league peeved off at him.

You just know that between this deal and the Kane and Toews deal that Stamkos is getting his money counting fingers all warmed up. He's due for a new contract after this season is over.

[SabreFan1]

Here's a cut/paste from the Buffalo News:

----------------

The unusual deal apparently allows O'Reilly to skirt around high escrow payments. Players has about 14 percent of their base salaries withheld in escrow this past season until the league's final revenue numbers were released.

It also is pretty much a buyout-proof deal. Even if the Sabres opted at some point to terminate the deal, as they did this week with Cody Hodgson, O'Reilly would collect his bonuses while the Sabres would only be able to buy out one-third of the $1 million per year salaries.

http://sabres.buffalonews.com/2015/07/03/sabres-sign-oreilly-to-seven-year-52-5-million-extension-thats-the-largest-in-club-history/

----------------

It looks like the escrow has more to do with the league making sure it gets it's money before the players get theirs.

Also, like the last paragraph says, if at any time the Sabres decide to buy him out, they would only take a 667k hit on the $1M dollar salary.

So when it boils down to it, the Sabres have their butts covered on this contract. It can be bought out at any time and the ccap hit would be very small.

*edit* This can't thrill the NHL. They are only going to be able to hold 140k of his money in escrow each year. I'd love to see them send him an invoice on any overages/underages on the league revenue. I wonder how well that would go over with his agents and himself.... lol

[WHL rocks]

Now I have some studying of my own to do. I hope that's not the case or ROR is going to have the whole league peeved off at him.

You just know that between this deal and the Kane and Toews deal that Stamkos is getting his money counting fingers all warmed up. He's due for a new contract after this season is over.

Well I'd be choked if I was a NHLPA member. I'm not 100% but this is what I found when looking into Weber's front loaded contract a while back. If you find more clarity be sure to post it.

I think this is pretty good for the type of player ROR is. If you think about it no way you would ever think he'd get less than $7 per year, $8 would have been high. So this is about where one would think ROR would sign for. He's only 24 so 7 years brings him thru his prime years. He's highly talented and pbbly one of the best 2 way players in the league. The young kids in Buffalo will learn to play the right way by watching ROR every day. So all in all this is a pretty good extension.

Edit: just saw your above post. Yep, that's what I thought. He's avoiding millions of $$ in escrow. Other players pbbly won't be too happy.

Also I doubt Sabres will ever buy him out anyways, he's top flight and proven talent. He's still very young. Only thing to keep him out of the NHL would be injury.

[SabreFan1]

Well I'd be choked if I was a NHLPA member. I'm not 100% but this is what I found when looking into Weber's front loaded contract a while back. If you find more clarity be sure to post it.

I think this is pretty good for the type of player ROR is. If you think about it no way you would ever think he'd get less than $7 per year, $8 would have been high. So this is about where one would think ROR would sign for. He's only 24 so 7 years brings him thru his prime years. He's highly talented and pbbly one of the best 2 way players in the league. The young kids in Buffalo will learn to play the right way by watching ROR every day. So all in all this is a pretty good extension.

Read my Buffalo News post and post your thoughts. It looks like GMTM avoided any high dollar cap hit if ROR is ever bought out by making his salary only 1M/yr.

I wonder if this is how other rich teams will start structuring their biggest contracts....

[WHL rocks]

Read my Buffalo News post and post your thoughts. It looks like GMTM avoided any high dollar cap hit if ROR is ever bought out by making his salary only 1M/yr.

I wonder if this is how other rich teams will start structuring their biggest contracts....

Yeah I read after i posted and edited my post. I guess we were both typing at the same time...

This is more of ROR getting what he wants. With a player like ROR there is no realistic chance he gets bought out so cap hit from a buy out wouldn't be a big issue. Even if he does get bought out ROR gets almost all of his contract paid out instead of standard 2/3 over twice the contract length so he wins there.

This is something the agent negotiated for and won out on. Bonuses are completely protected from any sort of work stoppage, lockout, strike etc, they are immune to escrow and the player gets all his money upfront before the season ever starts. He can invest this money and make more money from it, just at a 5% return would earn him half a million from his 10 million bonus in the first year of the contract. So this is all for ROR's benefit.

GM's/Owners can't be happy about this, now other teams are going to be forced to do these types of deals. When Philly offer sheeted Weber they front loaded the first 4 years with $13 million bonus per year and $8 mill for cpl more years. They knew NSH was a low revenue team and would not want to put up $13 mill on every July 1st before any money came in from ticket sales etc. There is no money coming in at that time of year so the owners pay this out of pocket. They matched but were obviously upset.

Now most stars will demand these types of structures in attempts to avoid paying escrow. Rank and file of NHLPA will be very upset if/when this becomes standard operating procedure because they'll be paying higher escrow to cover these types of SPCs.

[SabreFan1]

Yeah I read after i posted and edited my post. I guess we were both typing at the same time...

This is more of ROR getting what he wants. With a player like ROR there is no realistic chance he gets bought out so cap hit from a buy out wouldn't be a big issue. Even if he does get bought out ROR gets almost all of his contract paid out instead of standard 2/3 over twice the contract length so he wins there.

This is something the agent negotiated for and won out on. Bonuses are completely protected from any sort of work stoppage, lockout, strike etc, they are immune to escrow and the player gets all his money upfront before the season ever starts. He can invest this money and make more money from it, just at a 5% return would earn him half a million from his 10 million bonus in the first year of the contract. So this is all for ROR's benefit.

GM's/Owners can't be happy about this, now other teams are going to be forced to do these types of deals. When Philly offer sheeted Weber they front loaded the first 4 years with $13 million bonus per year and $8 mill for cpl more years. They knew NSH was a low revenue team and would not want to put up $13 mill on every July 1st before any money came in from ticket sales etc. There is no money coming in at that time of year so the owners pay this out of pocket. They matched but were obviously upset.

Now most stars will demand these types of structures in attempts to avoid paying escrow. Rank and file of NHLPA will be very upset if/when this becomes standard operating procedure because they'll be paying higher escrow to cover these types of SPCs.

I don't think it's a matter of one side winning a negotiation. There's benefits to both the team and the player. Both GMTM and ROR's agents were wringing their hands with joy while writing up this contract. This is all pocket change for Pegula.

The rank and file won't be paying more into the escrow account for these kind of star contracts. Let's say that the NHL wants 200k back from each player after the year's revenues are totaled up. They would have o send an invoice to ROR demanding that he pay back 60k.

You hit the nail on the head though with the investment part though. While ROR will be drawing interest on his investments, The rest of the league's players will have their money tied into the non-interest bearing NHL escrow accounts.

Kane and Toews must be giving their agents the "stink-eye" right about now for not getting them similar structured deals. Chicago is another team that can afford it.

[THERETOOL]

ugly contract .. he doesn't deserve that much

[WHL rocks]

I don't think it's a matter of one side winning a negotiation. There's benefits to both the team and the player. Both GMTM and ROR's agents were wringing their hands with joy while writing up this contract. This is all pocket change for Pegula.

The rank and file won't be paying more into the escrow account for these kind of star contracts. Let's say that the NHL wants 200k back from each player after the year's revenues are totaled up. They would have o send an invoice to ROR demanding that he pay back 60k.

You hit the nail on the head though with the investment part though. While ROR will be drawing interest on his investments, The rest of the league's players will have their money tied into the non-interest bearing NHL escrow accounts.

Kane and Toews must be giving their agents the "stink-eye" right about now for not getting them similar structured deals. Chicago is another team that can afford it.

Regarding escrow can you provide source for this information please. Very interesting info you just dug up. I'm sure you just didn't make that up. Totally takes the joy out of discussion when posters just make up facts. can you provide the link so I can read it and understand it as clearly as possible because I'm confused with the bolded part, $200k and $60k. Not getting across to me, guess I'm tired lol. So yeah link please thx. I'm very interested in how this works so more info the better.

Regarding the structure of contract Pegula is not the only rich owner, most of them are billionaires. This structure is something the player would negotiate for and it's considered a win for him. At the end of day you can only spend to the cap and this contract structure won't change that fact unless he's bought out which isn't even on TM's radar, if it is he shouldn't have signed the player to a contract. No gm would think, oh wait I'm signing this guy to a $50 million contract, let me set it up so he gets all his money instead of 2/3 when I buy him out in 4 years. ROR is a 24 year old star player, I'm not sure why anyone would think he'd be a buy out candidate. He's premiere 2 way C who's game sense is sometimes compared to Datsyuk's.

It's not the first time a contract has been structured this way, see Weber's contract. He's getting $68 million in bonus money from his contract and that was signed many years ago, so TM didn't just find a CBA loophole. He gave in to ROR's demand to pay his contract up front. This is a win win for ROR.

Even if he was bought out it wold save around $2 mill per year on the cap so I wouldn't read too much into the buyout thing.

[mpt]

One word: ridiculous