Frank Vatrano’s recent contract extension had people talking again around the league.
As in, talking deferred payments.
My colleague Chris Johnston had an excellent piece on this subject in November after Jake McCabe’s extension with the Maple Leafs.
But Vatrano’s deal is next level, with half of his three-year, $18 million deal deferred until 2035. Starting 10 years from now, he’ll get $900,000 a year for 10 years.
It led to a critical tweet from veteran player agent Allan Walsh, who doesn’t like the practice of deferred payments:
Assuming inflation rate of 2% per yr for 10 yrs and invested funds in a SP500 index fund rises 7% per yr compounding annually (the time value of money), this is a questionable tax strategy. A player (even paying CA income tax) could well end up better off not deferring. https://t.co/07u3orPmao
— Allan Walsh🏒 (@walsha) January 5, 2025
I won’t get too deep into the weeds of this, but the general point — one most player agents agree about — is that the real value of money now is higher than that of money deferred.
But one aspect that has to be considered there is that Vatrano isn’t getting $18 million from the Ducks if he signs a standard extension. The total dollars would have been lower. His camp was able to grow the pot by being willing to take deferred payments, which also made sense for the player because he plans to retire in Florida, where there’s no state income tax.
So he got more money than he would have otherwise and he won’t see that $9 million in 10 years’ time be subject to California’s 14 percent state income tax.
The Ducks, in return, get a lower cap hit of $4.57 million. So you get why the team would like this set-up.
Anaheim’s front office kept the league’s head office informed throughout this process. The NHL obviously signed off on it, though that shouldn’t be interpreted as the league being a big fan of it or deferred payments in general, even if they’re allowed in the current CBA.
The league, I think, would take issue if a team attempted a deferred payment set-up that it thought circumvented the core fundamentals of cap accounting and variability. In the specific case of Vatrano’s deal, which the Ducks kept the league apprised of at every step, my understanding is that the league feels the deferred payments were added for legit reasons that both parties saw benefits of — not for CBA circumvention.
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But let me be clear again: The league isn’t a big fan of this, generally speaking.
That’s why this is something the league may decide to address when CBA talks commence for real with the NHL Players’ Association sometime next month. And I should state that the NHLPA, dating all the way back to the Bob Goodenow days, was always against deferred payments for players. So maybe both sides will agree it’s for the best to take that option out of the next CBA.
Again, the vast majority of player agents I’ve talked to about this concept since last summer also generally don’t like deferred payments. They want the money for their client now — for the ability of their client to grow that money now.
We’ve seen four deferred payment contracts since the summer. Will we get a few more before the door closes on them — if it does?
That brings me to the two highest-profile pending unrestricted free agents: Mikko Rantanen and Mitch Marner.
Would the Colorado Avalanche and Maple Leafs, respectively, consider the deferred payment route to try to massage the average annual values on their next deals?
In both cases, there’s an internal cap hurdle in those negotiations. The Avs would rather not pay anyone more than superstar Nathan MacKinnon’s $12.6 million AAV, and the Leafs have franchise captain Auston Matthews at a $13.25 million AAV.
On the one hand, you can understand a team’s perspective on wanting to preserve that internal cap.
But from the agent and player perspective, the fact is that the salary cap is going up and may go up pretty aggressively depending on how CBA talks go between the league and NHLPA. It’s not about the cap number for the agents repping Rantanen and Marner. It’s about the percentage of the cap.
Could deferred payments help solve that riddle? Only if the player in each case believes he’s doing the team a solid as far as the cap. But I’m pretty confident that neither player’s agent would view it as sound financial advice to recommend deferrals. I don’t believe either camp would be terribly interested in that scenario.
Still, food for thought now that the cat’s out of the bag with these deferred payment contracts. Perhaps either the Avs or Leafs try to sell that as a solution.
Canucks listening on Miller and Pettersson
Fun times in Van City, eh?
As a basic fact, let’s just start here: League sources have confirmed that the Vancouver Canucks are listening on both J.T. Miller and Elias Pettersson.
With the season going the way it has and the drama in the room involving the players, Canucks general manager Patrik Allvin is wise to at least see what the market is for each. It doesn’t mean either will be moved, but the mere fact we know for sure the Canucks are talking to teams on each player is certainly not nothing.
One of the complicating factors is that the Canucks have told teams in those conversations that they don’t want to do a futures deal involving either player. The Canucks are in a competitive window. They would need an apples-for-apples transaction for it to make any sense. And they value each player very highly despite their struggles this season. That’s also been communicated to teams.
The Canucks are listening on forwards Elias Pettersson and forward J.T. Miller. (Anne-Marie Sorvin / USA Today)
One would assume that it’s mostly playoff teams looking at Miller and Pettersson, and why would a playoff team want to unload a core piece in-season?
I say “mostly” because one rumor that won’t go away — and it’s one that I haven’t been able to confirm — is the Rangers potentially being a fit for Miller.
Miller has full no-move protection, and as of Tuesday evening, he has not asked for a trade and the Canucks had not asked him to waive.
As for Pettersson, my teammate Chris Johnston reported on our TSN Insider Trading segment Tuesday evening that the Carolina Hurricanes are among the teams believed to have talked to the Canucks about Pettersson. That isn’t entirely surprising because those teams were in talks last season on the same player before Pettersson signed an extension with the Canucks.
Whether the Hurricanes decide to bring this conversation to the next level, time will tell. I would imagine part of the conversation within the Hurricanes front office is about what they think of Pettersson’s eight-year deal paying him $11.6 million a season. He’s in Year 1 of that deal.
And finally, let’s point out the situation with reigning Jack Adams Award winner Rick Tocchet, whose contract expires at the end of this season. The Canucks have a team option for next year on him, but my understanding is that Tocchet has the ability to decide if he would sign up for that option year — so basically, it’s a mutual option.
I’m not saying there’s anything more to read into this beyond those basic facts. Coaches work to the end of their deals all the time before signing extensions. Look at Rod Brind’Amour last season in Carolina. So it could very well be that the Canucks extend him at some point.
But if this drama-filled season doesn’t straighten itself out, how does Tocchet view things in Vancouver? Just something to file away.
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Matthews 4 Nations
At some point, there will need to be a conversation between Auston Matthews and the Toronto Maple Leafs about the 4 Nations Face-Off.
That conversation has not happened yet. Still too early. But I suspect sometime two weeks or so from the mid-February event, Leafs GM Brad Treliving and Matthews and his camp, led by agent Judd Moldaver, will connect on it.
And maybe it will be as simple as everyone agreeing that Matthews hasn’t missed a beat since coming back last weekend and Matthews saying he feels fine and can’t wait to play for Team USA.
Let’s hope for everyone that’s the case, because Matthews feeling 100 percent is great news for both the Leafs and Team USA and No. 34 himself.
Nobody wants to see an unhealthy Auston Matthews playing in the 4 Nations. (Claus Andersen / Getty Images)
But because he’s been out of the lineup for two separate stretches this season, no one can know for sure how he’s going to feel three weeks from now when everyone involved needs to have that conversation. (Team USA GM Bill Guerin is also waiting until closer to the event to check in on Matthews again.)
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By any measure, it’s a delicate conversation. The 4 Nations is not the Olympics, and from a Leafs perspective, if their franchise captain isn’t 100 percent come the Feb. 12 to 21 event, I can’t imagine they would love the idea of him playing through that. But on the flip side, Matthews has never been able to play best-on-best for his country, and that’s an opportunity the Leafs recognize. I also don’t think Matthews would put himself at risk if he’s not 100 percent.
So I don’t anticipate any issues. I think everyone involved will be on the same page. And at the end of the day, it will be Matthews’ call.
But I think it would be naive to think this isn’t something everyone involved is thinking about. It is.
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(Top photo of Frank Vatrano: Ryan Sirius Sun / Getty Images)
