PHR Mailbag: Blue Jackets, Deferred Contracts, Perfetti, Raymond, Rangers, Ducks, September Moves

Topics in this edition of the PHR Mailbag include a discussion on deferred contracts, Anaheim’s interest in moving out a pair of long-time veterans, and much more.  If your question doesn’t appear here, watch for it in next weekend’s mailbag.

User 1773920983: With Johnny Gaudreau passing away, what will happen to CBJ’s salary cap? They will fall below if it is removed.

vh33: I don’t want to be disrespectful, but I was wondering: due to the death of Johnny Gaudreau, what happens with the cap hit for the Blue Jackets and the salary? Will the cap hit be reduced? Or in the books for the remainder of his contract? And will the heirs receive his remaining salary? What are the rules for these tragic occasions?

Gaudreau’s contract comes off the books in full for Columbus which does indeed put them under the Lower Limit of $65MM for the upcoming season.  Per PuckPedia, they’re around $62.3MM with a 22-player roster at the moment so they do have a bit of work to do on that front.

It’s possible that they ask for some sort of waiver from the league to start the season below that amount given the circumstances but I think the NHLPA would need to sign off as well.  Their preference would obviously be that Columbus goes and signs a couple of free agents to make up the difference which is an option.  I expect the Blue Jackets will go the trade route and take on a player or two from teams needing or wanting to clear salary, picking up some draft picks in consideration for doing so.  Given that they’re a team that’s likely to sell at the trade deadline, I could see $67MM being a soft target, giving them a path to stay above the Lower Limit even if they move a player or two during the year.

As for what is and isn’t paid out, let’s start with the contract itself.  To the best of my understanding, the family won’t receive any of the remaining payments.  Assuming the $2MM signing bonus in his contract was already paid, that’s the last direct payment in the deal.

However, the family will receive some money.  Article 23 of the CBA provides some information on the insurance of contracts which is relevant here.  From my interpretation, there should be a $1MM life insurance policy as well as an accidental death policy valued at the base salary for that season which in this case is $7.75MM (it excludes the signing bonus).  There’s also a six-month extension of benefits for the family (added in the 2020 CBA extension) with an option to elect (purchase) continuation of coverage beyond that.

aka.nda: Deferred payments in contracts… how many can be in place, and for how much and what duration? How do they count against the cap if they’re paid out the day the season ends vs. some other time?

There are no restrictions on deferred payments in terms of how many can be in place, for how much, or for how long.

As for the second question, the end of the season still falls within the League Year so the quickest way to answer it is to go right to the CBA – Sec. 50.2(ii)(A):

Player Salary denominated as “Deferred” but payable within the term of the SPC shall be counted in the League Year in which the Player Salary is paid and shall not be treated as Deferred Salary.

That covers the day after the season ends but let’s look at another time.  More specifically, a deferral that is payable outside the term of the contract and payable outside the League Year (let’s say July 1st).  At that point, the value of the deferral is discounted to the present value of that compensation in the year it was earned.  Logically, the further out the payment of the deferred money, the lower the present value and therefore the lower the cap hit.  That’s my attempt at a simple explanation for a concept that isn’t all that simple.  PuckPedia has a nice breakdown with some more details of contract deferrals if you’re interested in reading up on it further.

I’m going to quickly comment on the idea of deferred salary in general having seen a lot of general speculation that the two deals Carolina did could lead to a spike in these types of agreements.  I don’t think that will be the case.  With escrow stabilizing, there’s going to be more effort into front-loading contracts as much as possible, especially for established top players.  They then get more money sooner which is the key objective.

Deferred contracts are more or less the opposite as players have to wait longer to get paid.  Presumably, they’re getting more in the end to make up for the deferral but they have to wait.  That’s how Carolina got around the perceived internal ceiling of Seth Jarvis’ deal being the $7.75MM that Andrei Svechnikov has.  The AAV based on total earnings is higher at $7.9MM but the cap hit is only $7.42MM based on the three deferred payments to the day after the contract officially expires.  It’s a creative solution but while we might see a few more of these deals (to be fair, Carolina’s two weren’t the first of its kind; they’ve happened before albeit rarely), this isn’t going to be the start of a new trend.

Cla23: What does a Cole Perfetti and Lucas Raymond contract look like?

For Perfetti, I think the two sides are going to hone in on a bridge deal.  He only has 75 career points under his belt so I have a hard time believing that the two sides can find a number that they’ll be happy with on a long-term agreement.  Perfetti wouldn’t lock in close to a max term for less than $6MM as he undoubtedly feels he has another level to get to offensively while given his performance so far, I doubt the Jets would go that high.  I expect a two-year term will be the target which should check in around $3MM per season, perhaps backloaded slightly to secure a higher qualifying offer.  That also fits nicely within Winnipeg’s current cap situation, giving them a chance to bank some in-season cap space.

As for Raymond, it looks like a long-term agreement is the goal and GM Steve Yzerman made sure to leave enough cap space to afford one.  His platform season was strong (31 goals, 41 assists) and there’s probably a belief that he can beat those numbers down the road.  I could see Raymond’s camp looking to best Cole Caufield’s contract (eight years, $7.85MM AAV) as he has better numbers now than the Montreal winger did at the time while Detroit is probably hoping to get that into the high-six range which lines up more with the cap percentage on Dylan Larkin’s post-entry-level deal.  I’ll go with seven years at $7.8MM or eight years at $8MM as the end result.

sha44ron! Due to the cap limits, the Rangers were unable to improve their bottom six so do you think that will hurt them this year?

I’ll start with this general thought.  If the bottom six is the biggest issue that a team has heading into the regular season, that’s a pretty good spot to be in.  And that’s where the Rangers are.

I’m not sure I agree that they haven’t been able to improve their bottom six.  As long as Filip Chytil stays healthy (granted, that’s far from a given), that’s a big improvement right there as he’s not passing Mika Zibanejad or Vincent Trocheck on the center depth chart.  If Reilly Smith’s addition pushes Kaapo Kakko onto the third line as well, now you have a third line that should be a capable secondary scoring trio.

I also think there’s room for internal improvement in the bottom six.  Will Cuylle should take a step forward while if they get a chance, Brennan Othmann and Adam Edstrom could contribute.

With New York’s overall talent, they’re in good shape for the season so they can be patient with their bottom six.  If the things I mentioned above happen and it’s a better group than expected, great.  If not, they can try to address it at the trade deadline.  If it’s still a problem going into the playoffs, then I’d be a bit more concerned but for now, I don’t think it will hurt them too much.

jminn: Ducks trying to move both Fowler and Gibson. Both guys overpaid and past their prime. Where do they end up, how much salary do the Ducks retain, and when do the trades happen (if at all)?

I’d be careful about putting the two in the same group.  A recent report from Sportsnet’s Elliotte Friedman indicated that the Ducks are exploring trade options for Cam Fowler with those discussions being in the early stages.  It seems to stem from the recognition that some of their younger defensemen will need to get a look or more ice time at some point.  That doesn’t have to be right away.  Contrast that with Gibson where Friedman suggested that they continue to shop John Gibson in the hopes of finding a trade.  Those are certainly not the same situations.

I don’t think Fowler is particularly overpaid.  While not an ideal number one blueliner, he can still hold his own in that role.  Two more years at $6.5MM for a player like that isn’t crazy; if he was on the open market today, I think he’d get close to that.  Having said that, if they want to maximize the return, maximum (50%) retention is the way to get there.

As to where he’d end up, Nashville comes to mind given that he can play on his off-side.  They’ve freed up some money with the Cody Glass trade to Pittsburgh and could send a reasonably-priced offset to Anaheim in Dante Fabbro ($2.5MM).  They also have three first-round picks at their disposal.  One of those with Fabbro for Fowler at 50% retention isn’t going to be the final deal but I think that’s a framework that could be built upon.  Having said that, Anaheim’s best shot might be waiting until closer to the deadline when more teams have cap flexibility.  I wouldn’t be surprised if he started the season in Anaheim.

That’s also my thought on Gibson.  I honestly thought he’d go during the offseason and that we were going to see a bit more of a goalie carousel than we ultimately did.  Now, with most teams having their tandem in place, how many landing spots are there that make any sort of sense?  Maybe Columbus if they wanted to swap Elvis Merzlikins in a change-of-scenery move?  I figure Pittsburgh will give Tristan Jarry another look; they’ve been a pie-in-the-sky type of scenario I’ve had from time to time.  Nothing else really comes to mind.

Gibson having three years left also makes a big difference.  Again, max retention would maximize the return but that would entail Anaheim retaining $9.6MM in actual salary over that span and what would they get?  A lesser goalie and even a second-round pick isn’t a great return for $9.6MM in sunk costs on a team with more of a strict operating budget.  They’d be moving him at the lowest possible value so unless there’s a one-for-one swap available of overpaid underachieving goalies, I think he stays the season and maybe options open up with only two years left (and ideally a better performance in 2024-25).

The other thing I’ll just quickly note here is that Anaheim is projected to only be $2MM above the Lower Limit, per PuckPedia.  That’s why my trade thoughts have players coming back as well as max retention on even one of them without a salary offset coming their way would put them under.  Just something to keep in mind as it’s another element that probably delays a swap of these players.

Schwa: With training camp coming up – do you expect any big moves still coming? Who (teams or players) could you see moving? Or will it be all RFA signings and PTOs at this point?

This is generally not the time of year that we see big moves.  Most general managers have the core of their roster in place and want to see how things look in camp and early in the season before making any sort of meaningful swap.  With that in mind, my inclination is to say no with the caveat that the Gaudreau tragedy is going to force the Blue Jackets to do something.  They might opt for one move with a pricey player going their way which might qualify as big-ish.

Having said that, I expect we’ll see some moves in general.  It wouldn’t surprise me to see Boston do something to add depending on what Jeremy Swayman’s price tag checks in at.  I feel like Colorado still has something coming to shore up their bottom six.  Meanwhile, are there going to be teams that need to move some money out depending on what happens with their RFAs?  New Jersey and Detroit (if Raymond and Moritz Seider push past $8MM apiece) come to mind there; who moves would be dependent on how much needs to be cleared.  So I do think there will be some trade activity coming but more of the quieter variety.

But in the meantime, yes, RFA re-signings and PTOs will dominate the headlines in the not-too-distant future, the traditional sign that camps are on the horizon and the season is soon to begin.  That’s a good thought to end this mailbag column on.

Photo courtesy of USA Today Sports Images.