The Edmonton Oilers not too long ago locked up considered one of their cornerstone gamers, Leon Draisaitl, with an eight-year, $112 million contract extension. This deal cements Draisaitl’s future in Edmonton and raises questions on how such contracts may affect future NHL negotiations.
Within the video beneath, Frank Seravalli from Every day Faceoff joined Ailish Forfar and Justin Cuthbert on The FAN Pregame to debate the intricacies of Draisaitl’s extension and its potential ripple results throughout the league.
The Construction and Timing of Draisaitl’s Contract
Seravalli opened the dialog by shedding gentle on the method behind Draisaitl’s contract. Whereas no important “fact-finding mission” was concerned, the Oilers and Draisaitl’s camp took two months to finalize the deal. For Draisaitl, the choice wasn’t nearly locking within the {dollars}—it was about understanding the Oilers’ potential to win the Stanley Cup. Coming off a season the place the Oilers reached Recreation 7 of the Stanley Cup Last, Seravalli believes that Draisaitl knew that Edmonton was on the cusp of greatness. This context and a profitable supply made it a simple resolution for the German star.
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Nevertheless, what stands out about this deal isn’t simply the $112 million whole however the contract’s construction itself. A staggering $104 million of that sum is assured via signing bonuses, making the contract probably the most financially safe offers in NHL historical past. Seravalli famous that the main target of the negotiations doubtless revolved round this construction, because the Oilers sought to unfold out their monetary commitments cap-efficiently whereas nonetheless rewarding Draisaitl handsomely.
Will Future NHL Contracts Shift Towards Deferred Cash?
Maybe essentially the most fascinating a part of the dialog got here towards the top. Seravalli then shifted his evaluation to the broader implications of Draisaitl’s deal, notably concerning deferred cash in NHL contracts. This idea was not too long ago highlighted in Seth Jarvis‘ distinctive contract, which included deferred wage—a method not generally used within the NHL however one which Seravalli believes may achieve traction.
Deferred cash permits gamers to obtain a portion of their wage at a later date, which could possibly be financially advantageous relying on the funding local weather. Nevertheless, this method requires a departure from conventional participant considering, which has been centered on getting as a lot cash upfront as doable. For brokers and gamers, the priority is that the worth of a greenback right now is larger than the identical quantity acquired years later, given inflation and funding alternatives.
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Seravalli defined that for deferred cash to turn into a extra widespread observe, each gamers and groups must embrace this technique. By deferring some wage, gamers may give their groups extra flexibility underneath the wage cap, doubtlessly permitting them to construct stronger rosters and enhance their probabilities of successful. Nevertheless, this requires excessive belief within the crew’s administration to make use of these financial savings properly. Draisaitl is all-in with the Oilers. He trusts the crew and the group.
Contemplating the Way forward for NHL Contracts
Draisaitl’s contract and others prefer it may sign a shift in how NHL contracts are structured. As extra gamers discover themselves in comparable conditions—on a aggressive crew with an opportunity to win and negotiating their third main contract—deferred cash may turn into a extra widespread software in cap administration. This alteration may result in extra contracts closely weighted with signing bonuses or deferred wage, offering monetary safety for gamers and cap flexibility for groups.
Finally, as Seravalli identified, such contracts’ success is dependent upon gamers’ willingness to undertake new monetary methods and the power of normal managers to make use of these financial savings successfully. If achieved proper, it could possibly be a win-win scenario for each gamers and groups, permitting star gamers like Draisaitl to receives a commission whereas giving their groups the pliability wanted to construct a championship-caliber roster.