By Nick Richard
On Tuesday afternoon, Auston Matthews’ new contract extension with the Maple Leafs was made official. The young star and his team came to terms on a five year deal at an annual average value of $11.634 million, bucking the recent trend of star RFAs signing for the maximum of eight years coming out of their entry level contracts and potentially resetting the market. Kyle Dubas and his management group are surely happy to have the face of the franchise locked up before the offseason rolls around but, as has been widely reported, they’ll have to wait until the summer to hammer out a deal with another budding star in Mitch Marner. In just three seasons, both Matthews and Marner have already played enormous roles in reversing the fortunes of the long struggling Maple Leafs franchise and every team around the league would be all too happy to have either one of them. While they’ll have to wait at least five more years after this one for a crack at Matthews, teams around the league will have the opportunity to approach Marner and his camp with an offer sheet if he and the Leafs don’t have a contract in place by July 1st. If Marner were to actually sign an offer sheet with another team, it would leave Kyle Dubas with the option of matching the contract to retain the player or letting him go and accepting compensation in the form of draft picks.
Offer sheets haven’t exactly been prevalent in the NHL with Ryan O’Rielly being the last to sign one back in 2013. The last player to actually change teams via offer sheet was Dustin Penner when he went from Anaheim to Edmonton in the summer of 2007. In order to acquire a player through the offer sheet process, a team has to be willing and able to pay more than the player’s original team and give up significant draft picks at the same time. Historically, NHL teams have either avoided paying such a price or have been unable to convince restricted free agents to sign. The bottom line is offer sheets are rare.
But this is setting up to be a unique summer in the NHL with the Matthews contract perhaps changing the landscape and several of the game’s young stars potentially headed for restricted free agency. There are plenty of worthy candidates if a team decides to attempt an offer sheet: Marner, Brayden Point, Mikko Rantanen, Sebastian Aho, Patrik Laine, and Matthew Tkachuk, to name a few, could be targets if they haven’t signed extensions with their current teams by July 1st.
Speculation from the top insiders in the business has Marner and his camp seeking a contract with an AAV of at least $10 million, leaving no reason to believe that he would be willing to risk leaving the team he cheered for as a boy to sign an offer sheet for anything less than that. The compensation for the Leafs, if they decided not to match such an offer, would be the signing team’s next four first round draft picks. Signing a shorter term offer sheet seems highly unlikely because teams won’t want to part with that much draft capital without some guarantee that Marner would be with their franchise long term.
Aside from the hefty price of four first round picks for any team that would sign him, there are other advantages the Leafs have when it comes to retaining their young star. As we’ve seen with the recent contracts for John Tavares, Auston Matthews and even William Nylander, the Leafs have still found a way to flex their financial muscle under a hard salary cap by structuring contracts to have most of the money paid out through signing bonuses up front. Matthews’ new contract will have the Leafs cutting him a cheque for a lump sum of $15.2 million on July 1st for the next two years and the first three seasons will see him earn $42.25 million of his $58.15 million deal. Not every team around the NHL has the ability to pay out that much cash at once and players have proven to value the lockout protection provided by a contract that is paid out mostly in signing bonuses. The Leafs also have the ability to sign Marner for eight years while another team can offer him no more than seven years on a new contract.
The other, perhaps larger, advantage the Leafs have in defending against an offer sheet is that standard contracts are inherently structured differently than offer sheets. While a standard contract’s cap hit is derived from the total value of the contract over the number of years, offer sheets have their cap hit derived by the total value of the contract divided by no more than five years. For example, the Leafs could sign Marner to a seven year, $77 million contract and be charged with a cap hit of $11 million per season whereas a team signing Marner to a seven year, $77 million offer sheet would be saddled with a cap hit of $15.4 million. A seven year, $70 million offer sheet would result in a cap hit of $14 million for his new team. A six year, $60 million offer sheet would still have a cap hit of $12 million per season. Those numbers would make anything longer than a five year offer sheet tough to swallow, even if it meant acquiring a star like Marner, and the Leafs won’t let Marner walk away if the price is $10 million per year. Never mind the four first round picks the signing team would be sending to the Leafs on top of that.
If another team around the league has legitimate designs on luring Marner with an offer sheet that the Maple Leafs can’t or won’t match, they’ll likely have to accommodate a cap hit north of $13 million on a long term deal. Looking around the league today at what teams have committed in salary for the coming season, there are only a handful of teams that project to have that kind of money to throw around. Several of those teams still have their own players to try and get under contract, and most of them are in no position to part with four first round picks. So while Marner may or may not be looking to use a potential offer sheet as leverage in extension talks with the Leafs, the reality is that he won’t have an abundance of suitors or the choice to go wherever he likes. Besides, word is he seems to like it quite a bit where he is right now anyway.
*Photo courtesy of The Globe and Mail
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