Bonus-heavy deals signed by top-tier players could change NHL landscape

When Ilya Kovalchuk left the NHL five years ago, star players were agreeing to monstrous, front loaded-type deals that helped teams manipulate the salary cap. The type of deal such as the one Kovalchuk signed – a 15-year, $100-million contract signed with the Devils in 2010 and ultimately terminated in 2013 – are no more. Kovalchuk returns to the NHL on far different terms – a three-year, $18.75 million deal, due largely to the fact he’s now 35 and will have to prove he can adjust.

Those huge deals – and there were tons of them, such as Marian Hossa’s 12-year, $63.3 million pact with the Blackhawks – went away after the 2012-13 lockout and new collective bargaining agreement between the league and the NHLPA. Hossa’s contract, meanwhile, became a unique situation of its own once he stopped playing.

This most recent free agency period shined a light on a new trend – top-tier players signing contracts loaded with signing bonuses that could change the landscape of how future deals are negotiated.

John Tavares was the prized-haul of free agency. The Bruins were on the list of teams the elite center considered and they had a meeting with his representatives, but Tavares ultimately eschewed the Islanders to return home to the Maple Leafs. The terms? A seven-year, $77 million contract that included $70.89 million in signing bonuses.

Nikita Kucherov signed an extension with the Lightning July 10, shortly after the free-agent period window officially opened July 1, for eight years, $76 million, and $44.5 million in bonuses. Connor McDavid’s new eight-year, $100-million contract with the Oilers is expected to pay him $86 million in signing bonuses.

What exactly does this all mean for the future of the NHL, as well as the Bruins and their upcoming free agents? BSJ caught up with Dominik Zrim of CapFriendly.com, who provided all contract terms in this story, for some answers.


No language in the current CBA to prevent signing-bonus heavy deals: When the new CBA was agreed upon, there were variances put in place to prevent front-loading deals. According to the CBA, “Player Salary and Bonuses in any immediately adjacent League Years of that SPC cannot exceed thirty-five (35) percent of the stated Player Salary and Bonuses of the first League Year of such Front-Loaded SPC. A player’s base salary could not be 35 percent less than the initial year.” Hossa’s contract, for example, paid him $7.9 million the first seven seasons. That base salary was slashed to $4 million, in 2016-17, then $1 million in the remaining four seasons. The current CBA, however, does not limit excess signing bonuses. It only stipulates that a player’s salary and signing bonus may not be more than 20 percent of the upper-limit salary cap for any league year. Tavares will be paid a whopping $15.25 million signing bonus in the first year of his contract, while his base salary will be the league-minimum $650,000.

Players are preparing for another possible lockout: The current CBA is set to expire after the 2021-22 season and players are preparing themselves for a potential labor stoppage. Per the CBA, the lockout would take effect Sept. 15, 2022, presuming it is not terminated early in 2020. Signing bonuses are typically paid between July 1 and July 15, which means Tavares would still see a big chunk of that money. Tavares is set to make $7.95 million in 2022-23, but $7.04 million of it is in the form of a signing bonus. Should the NHL and NHLPA enter a lockout, Tavares would only miss out on the $910,000 base salary. “You’re seeing huge amounts of signing bonus money allocated to those years because the lockout would occur at the end of September,” Zrim said. “Everything shuts down. But because signing bonuses are paid on the first of July, they’ll get that money.” Same goes for McDavid, who’s set to make $12 million in 2022-23. Only $1 million of that is in base salary, which means he’d receive the remaining $11 million.

‘Buyout-proofing’ the deal: A buyout is probably the furthest thing from Maple Leafs fans’ minds. There’s a ton of excitement about the addition of Tavares and how he’ll give them one of the deepest center corps in the league. But if in five or six years, Tavares isn’t performing at the same rate that warranted the chase for him this summer (the hope is that’s unlikely to happen; Tavares is 27 and in the prime of his career), hypothetically though, the structure of the contract ensures it’s practically buyout-proof. If a player is bought out after they are 26, two-thirds of the remaining contract is spread out twice the remaining length, but signing bonuses are not included in the buyout equation. The only way Tavares doesn’t see the approximate $71 million he is guaranteed is if he retired or both sides agreed to terminate. Another interesting note about state taxes. Base salaries are subject to “away-game” taxes, so different rates will apply for games played in other cities and Canadian provinces. Kucherov’s extension will pay him $12 million next season, but only half of the $1 million base salary will be subject to away-game taxes. The $11 million signing bonus is signed in Florida, where there is no state tax, which means hefty savings for Kucherov.

Does any of this impact the Bruins?: In the immediate future, no, not really. “It’s becoming a trend for the bigger names,” Zrim said. “It’s really for the higher-end guys.” It’s not that the Bruins don’t have any players worthy of such a deal, they just don’t technically have them right now. David Pastrnak will not be an unrestricted free agent until 2023-24, and by then the current CBA terms could be changed. Zdeno Chara is on a one-year deal but will be 42. David Krejci and Patrice Bergeron are under contract for the next three and four years, respectively. Torey Krug is set to become a UFA in 2020-21.

Their biggest concern in the short-term will be signing Charlie McAvoy, who is scheduled to become a restricted free agent after the 2018-19 season. That’s a whole different ballgame from being unrestricted, which virtually gives the Bruins the upper hand here. An extension is an obvious solution and it likely won’t be dictated by enormous signing bonuses. Why would the Bruins shell out the money if they don’t need to? McAvoy can't become an unrestricted free agent until he accrues seven seasons, which gives the Bruins control until McAvoy is 26. Cap Friendly has an internal database that can project future contracts. It’s hard to figure for McAvoy since he only has played one full NHL season, though it was a stellar one. According to Zrim, McAvoy could command a deal such as the one Aaron Ekblad signed with the Panthers. The 22-year-old defenseman agreed to an eight-year, $60 million deal, which includes $29 million in signing bonuses. That's still almost half the contract, but not the bulk of it, which is the case for Tavares and Kucherov. A more reasonable contract could be one similar to the six-year, $32.4 million Seth Jones signed with the Blue Jackets in 2016. “Tavares and Kucherov, for lack of a better term, held all the cards,” Zrim said. “They were going to market and they could sign and go wherever they went. McAvoy is under club control for five more years, so they can easily tell him if he’s not happy, then just sit at home and you have no rights.” Of course, this is not projecting what will play out for the Bruins and their cornerstone defenseman, but it does offer a glimpse at what advantages the Bruins hold in that scenario.