The Auston Matthews contract and everything you need to know about bonuses

The book on Lou is that he gets low too quick, so shoot high...no wait, that's the book on every goalie according to the Hockey Night in Canada broadcast, sorry. The book on Lou is he hates bonuses and won't pay them, and Auston Matthews will totally have to suck it up and take a bare-bones contract.

There are some media reports, apparently, it is believed that are willing to state as fact that the hold up (not quite four weeks since the draft) is Lou Lamoriello's personal intransigence on the issue of bonuses.

Maybe the holdup is bonuses. I have several new grey hairs after reading up on the issue and begging help from the noble Mr. Fulemin, who read the source documents over as well. It's a complex issue. Maybe the hold up is Auston's out shooting rattlers in the desert and isn't answering his phone.

In the interim, we can dig around in some facts about Lou and bonuses.

Lou hates bonuses

The spectre of Adam Larsson hangs over this narrative whenever he can get time off from haunting the the future Oilers as the ghost of bad decisions past, so I'll have a look at his history first.

The story goes that Larsson's contract negotiation was long and tortured because Lou didn't want to give him any bonuses, but the kid finally caved and took a basic contract.

This is sort of true. In fact, he signed his ELC on July 15, or near to, by the date on this story from the time, a few weeks after he was drafted fourth overall.

He signed a deal with no performance bonuses, but he did indeed receive the very standard maximum allowable signing bonus of $92,500.

The context of that signing is interesting, and was explained by beat reporter Tom Gulitti this way:

If Larsson's deal had included the "A" package of performance bonuses, it potentially would have increased the cap hit for 2011-12 to more than $3 million for 2011-12 because there will be no bonus cushion in the NHL for the seasosn with the CBA set to expire next year. With the Devils trying to squeeze in Larsson and re-sign Zach Parise, getting him to agree to a deal without performance bonuses was a huge coup for Lamoriello.

Lamoriello spun it this way:

Lamoriello made a point of giving Larsson credit for accepting a deal without any performance bonuses to be a Devil and fit in with all the other players in the organization.
"He understands what that means," Lamoriello said. "He does not want to be different than the players in that room and he made a decision to forgo all of those bonuses to get this signed, to get his career underway and to become a Devil and just get ready for training camp...He deserves all the credit in this."He also made the now famous statement in that interview about "not believing" in performance bonuses. Everybody has quoted it, so I will too.

"I am not one who is a believer in the rookie bonuses that is in the National Hockey League CBA — the A, Bs and Cs as they're called. Yet, everyone in the league that are drafted certainly in the top areas seem to get them. Nobody (with the Devils) has not gotten them and our conversations have been that this would not be something that's advantageous for us to do and the reason is because every player in our locker room that we have drafted have bought into that philosophy and nobody worries about individual things and only the team and it's a commitment that's made. Getting a young player who his peers who have been drafted below him and above him, for him to understand and agree to that — and also his representation — this young man is as mature as he can get at his age."That was then. A very particular then, with a very particular set of circumstances, and this is now. So instead of looking at what Lou did in his old job and focusing on the way he spun that into his oft repeated philosophy of team over individual, let's look at what the Leafs do under the new management.

The Leafs management isn't just one man, it's a team. You could almost liken them to an orchestra where each instrument plays their part, so it isn't just Lou's beliefs that matter.

This is the point in most stories on this topic where the author waves their hand and gives the briefest possible explanation about what these bonuses actually are. And I'm sorry, truly I am, but I'm not going to do that. After the explanation of the types of bonuses and how each works, I'll dig into what the league and the Leafs usually write into contracts. Spoiler: it's not quite what everyone seems to believe.

The three types of bonuses

Signing Bonus

First, the one that confuses the issue. Signing bonuses are part of the salary, count against the cap hit and are capped at $92,500 for players on ELCs. They are paid out in a lump sum in the summer, and the amount is not included in buyout calculations.

Nearly every player on an ELC in the NHL has a signing bonus, and a lot of them are at the max amount. It would be very unusual for a top draft pick to not have a contract structured that way.

The famous Larsson had a max signing bonus. All Leafs on ELCs have them, a few aren't max, but most are.

Performance Bonuses

There are two kinds of these, and herein lies the source of Lou's ABC quote, and a lot of confusion.

Schedule A Bonuses

They're called Schedule A bonuses because, well, they aren't actually. That's the common parlance term for them but the CBA defines them in Exhibit 5 as:

1. Individual "A" Bonuses Paid by Clubs
The maximum amount payable for any single category of Individual "A" Bonuses identified below is $212,500 per season. (For example, an Entry Level SPC may not contain bonuses of $212,500 for 20 goals and an additional $212,500 for 30 goals, provided, however, it may contain a bonus of $100,000 for 20 goals and $112,500 for 30 goals). An Entry Level SPC may contain any number of Individual "A" Bonuses; however, a Player may not receive more than $850,000 in total aggregate Individual "A" Bonuses per season. Individual "A" Bonuses are payable by the Clubs (as opposed to the League).Ahhhhhh!

The numbers that matter there are $850,000 in total and each type can't be more than $212,500 in total. You can sort the money around in any way you want that meets those two criteria.

The criteria for these A bonuses is fairly simple. They are all for tangible things with clear meanings. Goals, points, ice time and things like attendance at the All-Star game or being named to the All-Rookie team. The type and minimum threshold for the bonuses vary by position as well.

We'll look at the ones for forwards to get the gist of it.

(a) Forwards

(i) Ice time (aggregate and/or per Game). Player must be among top six (6) forwards on the Club (minimum 42 Regular Season Games played by Player and comparison group). (Note: an Entry Level SPC may contain bonuses for both aggregate and per Game ice time; however, the maximum aggregate amount the Player may receive on account of the ice time category is $212,500.)

(ii) Goals: 20 Goal Minimum

(iii) Assists: 35 Assist Minimum

(iv) Points: 60 Point Minimum

(v) Points Per Game: .73 Points Per Game Minimum (minimum 42 Regular Season Games played)

(vi) Plus-Minus Rating: Among top three (3) forwards on the Club (minimum 42 Regular Season Games played by Player and comparison group).

(vii) End-of-Season NHL All-Rookie Team

(viii) NHL All-Star Game (selected to play or plays)

(ix) NHL All-Star Game MVP

So, if I want to make sure my top draft pick forward does earn his max bonuses, I might agree to award him the max $212,500 for 35 assists, the NHL All-Star game, if I think he's a lock for that, and plus-minus because I plan to put him on a scoring line that won't get hemmed in, and well, you get the picture.

If I don't really ever want to pay that money, or if I think having these bonuses to strive for will genuinely work as a motivating factor, I might set the goals number very high, the points number high and give him something he might just be able to earn in his third year if he has a super hot season.

And now we're at the meat of it. That $850,000 might never get paid out ever. You could devise a level for most of those categories so unlikely to be achieved, you're sure the money isn't going to be spent. You can also structure them so that only some of it is likely to ever be earned.

We casually talk about these bonuses as money in the bank, but it is not, and they may rarely if ever be paid in full. You do have to get the player to agree to it, so the team does not have all the power here, but the only thing a player can do is refuse to sign and go back to whatever league he's eligible for in the interim until his rights expire.

The bonuses that are paid count against the cap. There is a cushion to allow a team to go over the cap because of bonuses, largely because they are unpredictable.

No team ever knows what their cap hit will be including bonuses, they can only guess. Guessing on $850,000 one way or another for every guy you have on your team on an ELC is reasonably easy to do, even when you stack a rebuilding team with rookies.

The Schedule B bonuses are a different story.

Schedule B Bonuses

To make this a little more confusing there are two types of these bonuses covered under type B.

The first type are paid by the league, not the team, and they do not ever count against the cap. They are paid out to any player on an ELC who hits one of the targets.

There are two broad categories within league-paid type B awards, and they have fixed dollar amounts. The first is for finishing in the top few in voting for or winning any of the NHL trophies given out at the NHL Awards. The second is for finishing in the league top ten in simple counting stats for your position—goals, assists, points, ice time, goals against average, save percentage or wins.

As a concrete example: John Gibson got $50,000 for winning the William Jennings Trophy last year since he was still on his ELC. Frederik Andersen did not get anything for sharing the award.

The second type of B bonuses are given for any of the same set of criteria, with a few minor differences in which trophies are included, but they are paid by the team, and the amounts for each bonus are negotiated by the team and the player's agent. They do count against the cap.

The total amount a player can receive in team-paid type B bonuses is $2 million. We just found the money in all this!

To continue with the John Gibson example, the Ducks could have negotiated a B bonus of any amount up to $2 million for winning that trophy, and he would be much richer today. He did not have any B bonuses in his contract, however..

Another example is Artemi Panarin who received all of his $1.775 Million in B bonuses for finishing top 10 in league scoring last year. According to General Fanager, the Blackhawks had written his deal with multiple chances for him to get that same amount from all of the available categories for a forward. Under the rules, he could only get the maximum of $2 million, no matter how many targets he hit.

This archived CapGeek page contains the full list of bonus criteria.

Exactly like the A bonuses, B bonuses can be easier or harder things to earn, and that's going to depend on the person. There's less discretion in the targets, it's a trophy or top ten in the league, but obviously some of them are earnable even in the first years of a player's career, albeit rarely. Sidney Crosby won the Hart Trophy in his second year in the NHL.

Like with the A bonuses, the team does not always know what they will owe or what their cap hit will be until the regular season is over.

What do other teams do?

A quick look at this year's top draft picks that have been signed so far shows a very unsurprising trend. The higher you went in the draft, the bigger the total bonuses are.

Generally, top draft picks get the full A bonus of $850,000. It's also very common for any highly-thought of player signed to an ELC to get those in full or in part.

Generally, top draft picks get B bonuses on a sliding scale that miraculously sets them up in a pecking order exactly matching their draft order. There has been upward pressure on these bonuses lately, as this chart shows (the dot marked Nylander applies to either of them as their contracts, like their draft position, are identical):

2016 top-10 draft picks:
• 6 signed
• 4 have highest AAV ever for their draft position
• 6 have topped average AAV pic.twitter.com/DAHyXdNx0M

— General Fanager (@generalfanager) 16 July 2016

Remember, that much of this money is never paid, particularly in the first year for an ELC. Artemi Panarin was the exception as an experienced professional plunked into the Stanley Cup Champions; he was in a much better position to cash in on the bonuses he had negotiated, and he hit on the top ten in points award.

It's difficult to find details on what exactly each player's bonus criteria is in their contract. What few are public seem to show that lot of teams simply pick the full gamut of minimum targets and offer a set dollar amount for each, not giving it a lot of thought until suddenly they're paying it when maybe they hadn't expected to.

General Fanager lists Connor McDavid's bonus structure as what could be called combo one, and shows the team and his agent did not spend a lot of time poring over the menu for a custom order.

Schedule A bonuses (max $850,000): $212,500 for any of the following achievements - top 6 forward on team in ice time (total or average per game, min 42GP), 20 goals, 35 assists, 60 points, 0.73 points per game (min 42GP), top 3 forward on team in +/- (min 42GP), All Rookie team, All Star game, All Star game MVP. Schedule B bonuses (max $2,000,000): $2,000,000 for any of the following achievements - top 10 forward in the league in goals/assists/points/points per game (min 42GP), top 5 in league in Hart/Selke/Richard voting, NHL First or Second team all star.What do the Leafs do?

The Leafs sign contracts with type A bonuses all the time.

William Nylander, Mitch Marner and Nikita Zaitsev all have max A bonuses. So does Kasimir Kaskisuo. Justin Holl has $182,500 in games played bonuses, a separate type that is included in the A bonus limit. Nikita Soshnikov and Travis Dermott do not have any. Andrew Nielsen and Dmytro Timashov do, but they aren't max.

While many media reports will tell you that Marner's contract was negotiated before Lamoriello came on board as some way to preserve the myth of Lou and his hard line, that is not true of many of those other examples.

The Leafs don't sign a lot of type B bonus contracts.

Nylander, as mentioned, has large ones. Marner has none, and just before you shout, "A-ha! Lou!" Morgan Rielly had none, and he was drafted fifth overall long before Lou came along. He had max A bonuses which gave him a contract identical to Marner's.

Just give the kid his money, Lou!

Back in the day, Lou could have done a number on Larsson. He could have concocted a set of bonuses he'd never have to pay, get the kid to sign it, preserve the outward forms of the pecking order, and walked away whistling.

He didn't do that. He spun it as a character issue, but he was straight with Larsson.

So, is there any real money at stake here? If, as so many speculate, absent of even a flutter of evidence to support it, that Matthews' agent and Lamoriello are locked in a desperate battle over B bonuses, how much will Matthews lose in actual dollars if he capitulates?

Maybe nothing or maybe nothing until his second or third year. At which point he's going to sign an 8-year deal for a lot of money. (The bridge deal seems pretty much a thing of the past.)

The Leafs could give him a t-shirt that says, "I'm #1!" and that might be as tangible a bit of recognition as $2,850,000 in imaginary money. It's not even Canadian Tire money, it's Monopoly money.

And even if some or all of it is attainable, I have sympathy for a team not wanting to have that much of a spread between the high and low on their potential cap hit. The Leafs aren't desperate for cap space, but they don't really want overage penalties eating into next year's cap when they want to be gloriously free of a lot of dead, dying or nearly useless cap hits.

I also have some sympathy for the idea that playing the pecking order game, helping Matthews measure his, er, worth against the rest of his draft class with imaginary money is really, really stupid and possibly counterproductive to building a cohesive team.

On the other hand, setting a B bonus on a really hard one to earn—top ten in goals say—and then watching Matthews prove he can earn it, because he seems the type, might be money well spent for the Leafs.

Not even mythical Lamoriello can totally con an agent into agreeing to a set of B bonuses that look good, but are absolutely unattainable. The pecking order motive is only part of it for the player and his agent. They want to see some of this as actual cash.

These bonuses are there to mitigate the comically low ELC salary for the very few elite players who are worth millions as teenagers. I have a lot of sympathy for players who want to get paid now before disaster has a chance to strike, rather than counting on their first real contract three years in the future.

However it shakes out, it's not as simple as one man trying to impose his will by stamping out his subordinates' individuality one shaved-bare face at a time. Nor is it as simple as just shrugging and saying pay the kid the max.

The time being taken could simply be explained by the sheer quantity of things to argue over in this system. An argument, remember, held between people who think winning is the principle business of life.

On the other hand maybe Matthews really is destined to be the star of Red Star Kunlun. It technically could happen.

***

All salary details in this story come from General Fanager. Any errors and omissions are my own.