The media in every NHL city is going to make a big deal about their team’s strategy and tactics for the 2021 NHL Expansion Draft. Which players are they protecting, how many no-movement clauses are they saddled with, how they will position themselves in the year leading up to the draft, etc. All of this is important, and we’ll be covering it in later articles. But they’re neglecting something.
There are really three interested parties when it comes to selecting players to fill out the Seattle roster: the Seattle franchise; the existing NHL teams; and the players. Today we’re going to look at the ways in which current and soon-to-be NHL players can position themselves in advance of the draft, and some tactics that they can use to avoid being selected in the event that their team leaves them unprotected.
Why Not Seattle?
Let’s put ourselves in the players’ shoes for a moment, and remember that moving to a market like Seattle is not a trivial matter for these guys. This isn’t like being traded, where the player has possibly been into the city and the rink a couple of times before. Maybe he knows some of the guys who have played there in the past, or heard stories about playing there from his teammates. From this he can cobble together at least a vague picture of what he’s walking into.
With Seattle, it’s a complete unknown. Unknown city, unknown management, unknown coaches, staff, facilities, fans, media; all of it is new, and it’s highly unlikely that the team will get everything running smoothly straight out of the gate.
And let’s not forget the guys who are married will be uprooting their wives and children, looking for a new place to live, they may have kids changing schools, it’s a lot of stress on a family.
Plus there’s the travel. For guys who are in the Atlantic Division, the furthest they go on a regular basis is a 30-minute flight to Buffalo or Detroit. The worst they get is the thrice-a-year trips to Florida (with their golf clubs, gee darn…) and annual two-week west coast swing. Playing for Seattle, they will absolutely spend more time on planes in a season than they will on the ice, and when they return from most road trips it’s going to be raining.
Make no mistake: we all love this team, and we love this city, but I doubt there are many NHL players that are excited about the possibility of playing here. This will not be an easy transition for a lot of guys, and don’t think that there will be players lining up to pack their bags for the Pacific Northwest. In fact, it will be quite the opposite. And that’s where we begin.
Young Players Have The Power
Surprisingly, the guys who have the most control over their destiny are the youngest ones we’ll be looking at. The guys who have been drafted but haven’t signed a professional contract yet are holding all the cards. If they don’t want to be selected by Seattle, then they just won’t turn pro. Yet.
Players who have not completed two seasons as a professional are exempt from the draft. So for young players who like the team who drafted them, and are considering signing a contract — just, don’t. If a player doesn’t sign a pro contract until the end of the season in 2020, he is automatically exempt. Wait a year, stay in Juniors or the NCAA, and that takes care of that problem. There are risks associated with this, to be sure. But it’s an option.
The window for this is mostly closed, because under most circumstances players either sign their professional contracts or declare that they’re leaving for the big leagues once their amateur season concludes in the late spring. But don’t think this wasn’t on the minds of younger players in this position. Certainly their agents made sure they considered this factor.
Sign Me Up
For players already in the professional ranks the options are fewer, and for the most part the options available to them are limited to the terms of their contract. For the guys with the clout, it will be easier; guys with less experience or fewer years in the league will have a harder time of it.
The first one is the obvious one: sign a contract with a full no-movement clause, which guarantees that the player will be protected in the expansion draft. Not many players can make an NMC a requirement for their new contract, but the ones that do will absolutely use this as a bargaining chip in their contract negotiations.
Whether negotiating an extension with an existing team or wading into the UFA market, players like Brayden Schenn, Torey Krug, and Mike Granlund are going to have their agents laugh and hang up at teams that aren’t making a no-movement clause part of the package they are offering. Similarly, players like Niklas Backstrom and Mike Hoffman are going to want to upgrade from their current NTC to an NMC. This guarantees that the team they sign with will be the team they play with after the Expansion Draft is complete.
If an NMC isn’t possible, then a NTC can potentially ward off consideration. Teams like flexibility, and in particular Seattle is going to want to start monkeying with its roster almost immediately to put together the on-ice product it envisioned. Having players who can’t be traded or who have a say in where they go limits those options.
Looking back at the 2017 NHL Expansion Draft, the (not Las) Vegas Golden Knights selected only 5 players with any kind of no-trade clause — 1 with a full NTC, and 4 more limited — but then traded 2 of those players away within 2 weeks. So plainly there is a preference for players without an NTC as part of their contract, and players can use this to their advantage.
Another way to help reduce the chances of being chosen is to have multiple years remaining on your contract at the time of the draft. Of the 30 players selected in 2017 draft, fully 15 of them had a single year left on their contract. Only 3 players with 2 or more years left on their contracts were on the Golden Knights’ opening day roster. So, again, this is something players can use to help reduce the chances of being chosen.
Or, do the opposite: sign a deal that expires at the end of the 2020-21 season. (Not Las) Vegas chose only 4 UFA players in the draft, and 3 of them signed with different teams 10 days later. So an expiring contract not only reduces a player’s chances of being chosen, but he then has the ultimate flexibility in being able to sign anywhere on July 1st.
Having said that, the Golden Knights also chose 6 restricted free agents in the draft, and every one of them ended up signing with Vegas before the season started. So if a player isn’t into UFA territory yet, it’s going to be less effective.
Lethal Contract Clause
One remaining tactic that players may choose to go for is the “poison pill”. The phrase comes from the cyanide pills that spies would carry with them, preferring to kill themselves when in danger of being captured rather than submit to interrogation and revealing sensitive information to the enemy.
It was later adopted by corporate lawyers at the dawn of the leveraged buyout boom in the 1980’s, referring to stipulations in corporate by-laws that would make the company less attractive to hostile takeover bids. We’re using it here in the same manner. The execution of this tactic gets a little tricky, so stay with me.
First you need to know a little bit about the “standard player contract” as it’s referred to in the collective bargaining agreement. The amount of money that applies to the team’s salary cap every year is called the average annual value, or AAV. The AAV is calculated as a function of:
( $ total salary + $ total signing bonuses ) / contract duration in years
So a contract with a 3 year duration totaling $10 million in salary and $2 million in signing bonuses — $12 million total compensation — has an AAV of $4 million. Easy!
There is also something called the salary variance. Now, the variance is defined by such a convoluted set of guidelines incorporating persnickety definitions and mathematical acrobatics that it’s difficult even for spreadsheets to handle properly. What you can use as a rule of thumb is: a player’s total compensation can vary no more than 35% from one year to the next; and the highest year can be no more than double the smallest year.
So in a contract where the total compensation in the lowest year is $3 million, the amount in the year with the highest compensation can only be $6 million.But there would have to be at least one year between them to bridge the gap — $6 million is more than the allowed 35% variance from $3 million year over year.
Lastly, there’s the matter of payment terms — when the player actually receives the money. Salary is paid in specific increments at prescribed times during the regular season. Signing bonuses in the first year are paid when the contract is signed; signing bonuses in any other year are paid on July 1st of that year. With me so far? All right. Now to the “poison pill”.
Player A signs a 5-year contract. The total compensation is $25 million. The contract is paid as $25 million in salary, and there are no signing bonuses. The salary is paid equally over all 5 years — $5 million each year. The AAV is $5 million, as you would expect. Simple. This means that if the player changes teams after year 2, the team who acquires him is liable for the upcoming 3 years of salary — $15 million, or $5 million per season.
Player B signs a 5-year contract, and the total compensation is $25 million. This contract is also paid as $25 million in salary, with no signing bonuses. But the salary is distributed unevenly this time: $3 million and $4 million in the first two years, and $5/6/7 million the last 3. So if the player changes teams after year 2, the acquiring team is liable for $18 million in salary, or an average of $6 million per season. But that’s all in salary, meaning it’s meted out in little checks over the course of 3 years. And remember that the amount that counts towards the salary cap — the AAV — is still $5 million.
Here’s where it gets fun. Player C signs a 5-year contract, total compensation of $25 million. This contract is paid out as a combination of salary and signing bonuses. Salary in the 1st and 5th year is set at $3,787,878.00; salary in the 2nd and 4th years is set at $4,924,242.00; salary in the 3rd year is an even $1 million.
The remainder of the contract is paid out as a signing bonus in the third year, July 1st of 2021 to be exact. To save you having to get out your calculator, that signing bonus would be $6,575,757.00.
So if this is the real world, and Player C is selected by Seattle in the expansion draft in late June of 2021, then the following week he will be humming and skipping his way up to Tod Leiweke’s office to collect his check for over $6.5 million.
O U C H.
Note that the highest total compensation amount is in year 3 ($1 million salary + $6.575 million signing bonus = $7.575 million), and that amount is precisely double the lowest compensation years ($3.787 million * 2 = $7.575 million); note also that the intervening year compensates for the variance between years 1 or 5 and year 3. So the contract is compliant with the variance rule of the CBA.
Plus, the contracts for Player A, Player B, and Player C all have the exact same AAV — $5 million.
Just How Effective?
Teams hate these signing bonus clauses. From a salary cap perspective, it makes no difference to a team’s overall situation whatsoever, because the AAV on a contract remains the same no matter what salary or signing bonus is paid in what year. The reason is that they are loathe to have to shell out that kind of actual cash if it’s not absolutely necessary.
A recent example is how Chicago was aggressively shopping center Artem Anisimov in the run-up to the trade deadline. Nobody would bite, even after the season was over. In fact nobody would answer the phone until after July 1st of this year — when the Blackhawks had to pay out his $2 million signing bonus.
Anisimov was subsequently traded to Ottawa on July 16th for Zach Smith, who saves the Blackhawks over $1 million in cap space and is more than fair return for a center struggling at the face-off dot. Ottawa and Chicago were both out of the playoffs, so this deal could have been done on April 15th. But nothing got done until mid-July.
Given that, it’s clear that the signing bonus was the sticking point. If teams are reluctant to acquire a player to avoid having to pay out a paltry $2 million, you can see just how effective these kinds of signing bonuses could potentially be.
So given the example above, assuming Players A, B, and C are of comparable on-ice value to Seattle, you can understand why Player C will never make it on to the list of guys they are considering. Player A or B will give you the same quality game for the same AAV, without the $6.5 million nut-punch.
We’re coming up on the halfway point in our preview of the 2021 NHL Expansion Draft. Next up is a look at the current teams in the league, how they are already preparing their rosters and their prospects for the upcoming draft, and how the (not Las) Vegas Golden Knights are set up to make out like bandits — at Seattle’s expense.