Auston Matthews and Mitch Marner, you have likely heard, are going to sign with the Toronto Maple Leafs for not a penny less than a gazillion dollars this summer.  TSN’s talking heads have soberly warned us that only an eye-popping sum will let the Leafs keep their star players.  Or else the Arizona Coyotes, dual-wielding offer sheets like a Goldeneye character, will charge in and steal them.

Of course, if you’ve been watching hockey with an eye on the cap sheet for a while now, that doesn’t sound quite right.  Nobody offer sheets anyone anymore, and the Leafs aren’t the only team with good young players.  At the same time, lots of people will tell you exactly what Matthews or Marner is worth, which is especially fun if you want to experience the weird phenomenon where fans of a team suddenly criticize its best forwards to argue for cheap deals.  “Sure, he scores a lot of goals, but is that really what you want in a hockey player?”

If you’re someone who watches hockey for the sake of, y’know, hockey, all this can get a bit dizzying.  What actually determines the deal in these things? What matters in chats between Kyle Dubas and the agents for Auston and Mitch? Why won’t they goddamn sign???

Well, you’ve come to the right place.

What’s Going On With Marner And Matthews?

Auston Matthews and Mitch Marner will finish their entry-level contracts on July 1, 2019.  They will then need new contracts.  They could have negotiated an extension with the Leafs at any point after July 1, 2018, but they understandably waited because they both expected to have (and are having) big seasons.

Matthews and Marner will both be “restricted free agents.”  This means that other teams can send them offers for contracts after July 1, 2019, but the Leafs can choose to match those offers and keep the players on those terms, OR the Leafs can let the players go, but they will get draft picks from whichever team takes them.  As you would guess, this makes it a lot easier for the Leafs to hold onto their players.

“Unrestricted free agents” can sign with absolutely whoever they want after their contracts end, and their previous team gets nothing.  You may remember John Tavares did this recently and it was a cause of some displeasure over in Long Island.  Good times.  Matthews and Marner will be eligible to be unrestricted free agents as of July 1, 2023, if they aren’t signed to a contract on that date.  Everyone expects they will be—but the fact they could be UFA on that date impacts how these negotiations are going to go down.

Still with me?  Good.

What Are They Negotiating Over?

This might seem obvious (money x number of years), and that’s the core of it. But we ought to start with “what’s actually in the contract?”

Standard Player Contracts (SPCs) in the NHL are governed by the Collective Bargaining Agreement between the league and the player’s union.  The CBA, as you probably remember, is the big rule book that the two sides have a lockout over every seven or eight years.  It says what you can and cannot do.

For standard contracts, most of the clauses in the contract are already there word for word in the CBA and they have to be included.  These govern things like the players’ obligation to keep fit and when the players get paid.  If you care about this stuff in detail, some big nerd wrote a giant article exploring it.

Obviously, the biggest thing in the CBA and the reason we care about this is the salary cap, which limits the amount teams can spend on players. If the cap didn’t exist the Leafs could throw money at whoever they want, but they can’t.  So here we are, caring about SPCs.

There are different types of contracts—you’ve probably heard about Entry-Level Contracts or 35+ contracts—but for our purposes things are a lot simpler, since Mitch and Auston are both well under 35 and are negotiating their second deals. There are only really four things to talk about.

  1. Money/cap hit (how much in each year)
  2. Term (how many years)
  3. No Trade/No Move Clauses
  4. Signing Bonuses

Money should be obvious; how many dollars the player is paid in each year.  There are now rules about how much this number can move around to avoid embarrassing contracts like Shea Weber’s, where the actual money drops to near-league-minimum for several years at the end where he was obviously expected to retire, as a way of reducing the average value of the contract.  The cap hit is the amount of money that counts against the salary cap every year; if your cap hits go over the limit, the league will refuse to certify your contracts and you won’t be able to sign anyone else.  The cap hit based on the average value of the contract across the years, so the money can go up and down, but except in unusual situations like William Nylander, the cap hit is steady.

Term is what it sounds like. The Leafs will be able to offer eight years to Marner and Matthews.  No other team can unless Kyle Dubas goes insane and trades one of them before this year’s trade deadline, which won’t happen, so just treat it as “the Leafs can offer up to eight years and other teams can offer up to seven.”  It’s worth noting two key things about term:

  • Everyone generally expects the salary cap to go up because that’s what it’s done up to now
  • Players expect to make more in years where they would be unrestricted free agents than years where they would not be—because if they’re unrestricted every team can bid freely on their services and they can use the competition to make more money/

For Marner and Matthews, therefore, they will want more money the longer the deals go, because they expect that they would be making more money if they had a new deal in later years instead.  The Leafs, who think these players are very good and also young, have some incentive to try to lock them up for longer for the same reason.

No trade clauses, as you would guess, prevent a player from being traded without his consent.  Many of them are partial, where the player gives a list of teams he would be willing to be traded to and the clause keeps him from being traded to the rest of the league.  No move clauses are the same thing except they also block a player from being waived.  Players can only have these clauses in years where they would be unrestricted free agents—for Marner and Matthews, that means that the first date they could apply would be July 1, 2023.  You might remember that William Nylander was concerned about being traded; the Leafs could promise him that this wouldn’t happen, but they weren’t able to put a clause in the contract to guarantee it before 2023 (when he has a modified no-trade clause kick in.)

Signing bonuses are the happy thing if you’re a Leaf fan.  Teams can choose to pay their player some of the money in a big lump sum on July 1st each year, instead of as normal salary every two weeks.  This is very nice for the player for three reasons:

a) They get their money earlier, which is a bit like getting more money

b) They get some insurance in case the NHL has another lockout (the lockout would start in September, so payments on July 1st would already be made)

c) It makes the deal harder to buy out, though no one expects these contracts will be

For some teams, paying out a gigantic amount of money in one go would be a hardship.  The Leafs are richer than God, so they can do this no problem.  The John Tavares contract is almost entirely signing bonuses.  His actual non-bonus salary this year is, I’m not kidding, $650,000, which is the same as Tyler Ennis.

The Matthews and Marner contracts will definitely feature massive signing bonuses, and this is a competitive advantage the Leafs have over other teams.  (Especially Arizona.)

It’s worth noting that Matthews and Marner cannot sign deals with performance bonuses right now, or with funny conditions like you might have seen in the past. There are only signing bonuses, which are not tied to any activity other than putting pen to paper. Once you have the contract, you get them.

So there are really four things to negotiate here, and two of them are kind of a given (M&M will get trade protection from 2023-24 onward and lots of signing bonuses.) It’s worth noting, given how simple these deals are, that “progress” is kind of an odd phrase. The talks with William Nylander were often described as “progressing” and then no deal would happen; this is partly because these deals basically don’t have details to hash out the way other contracts in life do. Either you agree on money and term or you don’t.

So how do you go about doing that?

Comparables

This is the natural process of looking what other teams and players sort of like you did, and making a deal in line with those things.  The thinking goes: Auston Matthews is a bit better than Jack Eichel but not as good as Connor McDavid, so he should get somewhere between them on a deal of the same length.

This makes a lot of sense, and is legitimate.  People forget a few things when they do this, though:

  • Inflation.  The cap has gone up every year, though not by a consistent amount.  Jack Eichel signed for an extension worth $10M in October 2017, a season where the salary cap was $75M.  The extension actually took effect this season, a year where the cap is $79.5M.  So if the cap goes up to $83M next year, Matthews could quite reasonably argue that an equivalent contract to Eichel’s is actually $10.4M or $11.1M, depending how you want to frame it.  This clouds the picture a bit, but it matters.
  • No comparable exactly the same. You saw a lot of this during the Nylander contract negotiation, where people would just point at the Nikolaj Ehlers contract in Winnipeg and say “so it should be the same.” This is a fine way to argue things if you are six years old.  If you’re an adult and/or player agent, you might note the timing of the deal, the cap (as above), the different team situations, differences in particular stats, linemates and on-ice context, endorsement opportunities, future potential, cost of living, and a hundred other things./

You know, I’m going to step outside the bulleted list for a second because I want to emphasize this.  No one comparable is the answer.  Period.  If someone points to the John Tavares contract and says “John’s making $11M so Matthews has to make less”, that person is not serious.  If I could banish one thing from contract chatter, it would be people picking one fact and then asserting that that solves the whole thing.  That shit is dumb, man.

Okay, as I was saying:

  • Comparables as a whole aren’t binding.  The player and the team can take other contracts as a guide, but in the end, this is a deal between two parties.  Dubas and Matthews/Marner aren’t going to arbitration, so this is between them and whatever they decide.  Which leads to the next big point./

Leverage

Leverage is bargaining power, and if you want to be a cynic, it’s the only thing that really matters.  Which leads to a fascinating realization.

It is entirely possible for Auston Matthews and his agent to go into a meeting with Kyle Dubas, at which Dubas has prepared a thoughtful and well-reasoned offer, and hear him out, and for Auston to then say “I want $14M a year because the moon is made of cheese.”

It is no use for our GM to patiently explain that the moon is not made of cheese, or that this fact is not in any case relevant.  Auston can sit and wait and say “The moon is made of cheese” and then Kyle Dubas has to make a decision about that $14M per.  In the Nylander negotiation, Dubas could have gone on until he was blue in the face about the Ehlers comparable, but in the end, the Ehlers comparable didn’t mean much.

Now, I’m assuming Matthews, Marner, and their agents Judd Moldaver and Darren Ferris, aren’t going to go bananas.  Comparables are likely going to impact what they consider reasonable and how they bargain.  But the fact remains that what matters here is leverage.

The leverage the players have comes from two sources:

  • Offer sheets.  Remember way back up there when I talked about how teams can send offers to restricted free agents?  Well, that basically doesn’t happen and it probably won’t here (at least, I don’t think the players will sign the offers.) But it helps form a floor.  If Kyle Dubas tries to low-ball either player too hard, the player could solicit an offer sheet from another team; if another team sends one and he signs it, that forces a decision.
  • Sitting out.  The player can sit at home, as we vividly remember. I think a lot of the misjudgment of the Nylander negotiation was that we all underestimated how far a player could go when his team was a contender and he was willing to sit on his hands.  If the player is willing to not get paid—or even to go to the KHL—he can just wait.  And when the team is good and trying to win a Stanley Cup, withdrawing his services goes a long way.  Dubas doesn’t have Tavares and Nylander and Rielly and Kadri and Andersen and Muzzin all here to not compete, he wants to compete now, and ultimately losing either player for a year in a contract dispute seriously impairs that.  /

The team’s leverage:

  • Money.  I mean, duh.  If you’re not playing, you’re not getting paid, although Marner and Matthews have both made more money already than I will make in my entire life.  Still, missing paycheques stings, if it comes to that, and the KHL doesn’t pay like the NHL does.
  • The chance to play in the NHL, for a contender.  The Leafs remain the only avenue (barring an offer sheet) for these players to play for a top team in the best league in the world. For most athletes, that means something./

For a long time it was expected that teams could basically make their RFAs do whatever they wanted, because offer sheets almost never occurred and most players were determined enough to play.  Nylander has probably gone some ways to showing otherwise.  When a team’s Cup window is open, its star players have a lot of leverage just from being star players who are irreplaceable, and that brings me to my final and maybe most important point.

People who say Dubas should “make Matthews and Marner earn it” are dreaming.  Maybe they’re less determined to go to the wall than Nylander was, but they have power in this relationship and they, and their agents, know it.  Kyle Dubas held the line on Nylander as long as possible, but when it came time for a final offer he went up a bit and made it.  If these negotiations go that far—and I think everyone involved very much hopes they don’t—he’ll have a similar choice to make with Marner and Matthews.  He can rely on his leverage as much as the players can on theirs, but he doesn’t have so much bargaining power that he can dictate terms, and if you expect him to, you are going to be mighty disappointed.

Sum Up

  • Contracts are simple, negotiations are hard
  • Comparables are helpful but they aren’t conclusive
  • Both sides have power and that matters/

I wrote this as a guide to hopefully help all this contract chatter get a little more bearable for all of us.  But really, I hope everyone just signs and it’s all easy and we go win Cups.

I’m just not holding my breath.

Free Agents and Contracts