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Backloaded Deals Might Be A Trend This Offseason

(Photo Credit: Photographer Brandon Andreasen)

If there’s one thing we’re starting to learn to count on it’s that there will never be a shortage of comments from NHL agent Allan Walsh. While he’s seemingly done discussing his client Marc-Andre Fleury’s future (for now), Walsh explained a way a team like Vegas could entice a high-end free agent by paying them more later than now. It would allow a front office to go out big game hunting, potentially attracting a veteran free agent like Alex Pietrangelo.

I’ve never seen this kind of activity. The only time that compares to what’s happening right now was in 2005 when we were opening free agency after losing a whole season to the lockout… In 2005, teams had the ability to use two compliance buyouts and take money out of the system and that doesn’t exist right now. There’s a lot of teams right now that are bumping up against the top of the upper limit and still have a number of their own players to sign. Let alone look at the free agent market and see who they can be in on to bring on board and into their city. -Allan Walsh, NHL agent

The Golden Knights are one of those teams up against the cap but unlike other clubs, it won’t stop them from adding players they desire. Vegas is desperately trying to move certain players to free up cap space but the organization can get creative when talking about real salaries as their owner is never afraid to spend to make his team better, something many other owners are not.

While the hunt can’t begin until officially until tomorrow, Vegas has probably been sniffing out their competition. Sources have told that the Golden Knights intend on making a real effort to sign Pietrangelo. With the uncertainty of the cap, their internal budget, and the players’ demands, Walsh explained how a club like Vegas can entice an attractive UFA to ditch their old club for Sin City.

There’s an escrow cap this coming season in 2020-21 of twenty percent. There’s a ten percent deferral that will be deferred until three, four and five years from the coming season. If you can defer money, and by that I mean put the money into the outer three years of let’s say a six-year deal, the escrow cap in those years is six percent. That means you will get your negotiated face value of the contract up to six percent that you could lose to escrow. That’s a huge difference. -Walsh

That type of salary structure would be more attractive to an established player like Pietrangelo, who already has money in the bank. Vegas’ willingness to defer would make this an even more attractive place to a free agent than it already is. There’s already the tax benefits, but pushing money to the back end of the contract would mean even more money for the player over the course of the term by skirting the high escrow year.

If the Golden Knights intend on making a significant offer to Pietrangelo, a backloaded deal might set them apart from other suitors. Sure, there’s the fear of a buyout down the road, but the hope would be that never comes into the picture. With an estimated $48M career earnings, Pietrangelo would absolutely be happy to push the money towards the end of the contract to avoid escrow. It’s smart business for both, especially if they can win multiple Cups together.

A player might decide to throw as much cash as they can into the outer years of the deal and take advantage of the six percent escrow. I think we might see very creative structures going forward atleast this year and potentially next year where we see contracts heavily backloaded. -Walsh

The trick here is that all of this is in real dollars and cents, not cap space. Whether Pietrangelo was to take 90% of his contract in the final year or space it out equally over the term, the cap hit would be identical. This is simply a tactic to lure him to pick Vegas over anywhere else. If it works, it would then be up to Kelly McCrimmon, George McPhee, and Andrew Lugerner to figure out how to make it work against the cap. Unfortunately, there aren’t as many creative loopholes there.




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  1. Daryl

    This might be an unpopular thought but just curious to me…. With Vegas wanting to sign Pierta and needing to save cap money, is it possible to resign Engelland to another 1yr base salary and try to trade Holden while not signing Merrill? Thought is one of the younger guys, similar to Whitecloud, will end up being ready to play and you would use Engo for spot duty and to help develop the younger guys. You aren’t wasting much money on Engo and you are freeing up money by letting the other two go. I personally don’t see a drop off b/n Engelland and Holden, at least not that would make a difference. Best option would be one of the other 3 AHL defenseman end up being ready and you wouldn’t have to use Engo much.

    I think if any of the young guys are ready to play, they would replace Holden anyway. With my scenario, you aren’t wasting millions on a player who will mostly sit the bench

    • Rob

      Holden only makes 1.7M next year. With bonuses, Engo probably costs you 1.2-1.5, and he’s a serious downgrade from Holden.

      • Daryl

        Engo only makes $700k and bonuses. I thought Holden was making closer to $2.2 next year. But I disagree on the serious downgrade. Holden had a decent streth where he played pretty good but overall, I thought he has played fairly bad. And remember, there was a stretch this past year where he was on the ice for somewhat like 22 of the 26 some odd goals scored on us. He even knocked in 3 goals himself. And if we are talking about a player who would only play spot duties, would you rather pay that person 2.2 or 700k???

    • Tim

      Daryl whats this man crush with Engelland let him get some experience coaching the Silver Knights. He’d help the kids down there a lot more then he’d help the Golden Knights.

      • Daryl

        I get that he is probably done, I’m looking at ways to save money. I think Holden is a comete waste of money and bringing back Merrill would be really stupid (as was the Holden signing). It’s not like I say he should come back and start or even ay very much. But for the price, yeah I would rather have Engo over Holden or Merrill especially considering their playing time

      • Daryl

        For the record, I would say VGK should keep Merrill over Holden as well if they could keep him for $700k instead of the $2.2 it costs for Holden…. and I think Merrill is worse than Holden or Engo. My comment was more about keeping a 7th Dman that doesn’t hurt the program for the lowest amount of money so they can sign a top 4 defenseman.

    • Daryl – Ehgo is history at any price. I admire your loyalty but it is getting in the way of your common sense which I know reading some of your posts is much greater than many. Would you spend 700,000 dollars and leave it sitting in the driveway certainly not Foley didn’t accumulate millions with decisions like that. Players are an asset not a liability and you can’t afford to have $$$$s sitting idle with the idea maybe I can use them a little. Businesses lay off or get rid of workers (players) that are no longer useful – the reality of the world even though not likeable or painful but fact. I am sure they are questioning their investment for him this past season. This has absolutely nothing to do with not liking the guy – his time has passed and you know as well as any what you did for the team yesterday is of little consequences – VGK mgt has proven this time and time again – its business. Funny I know you know this – like I said I admire your loyalty. Next few days are going to be interesting and sad I am sure in many regards.

      • Daryl

        I completely agree with everything you stated as well as agreeing that more than likely he is done. I’m simply looking at it as would you rather have Holden sitting on the bench at $2.2m or Engo at $700k? I know I am probably in the majority (lol) here but yes I do think Engo is just as good as Holden. If VGK is able to get Pietra that bumps Holden to 7th man, unless they get rid of other Dmen which is very likely. Yes I know it would be a very long stretch

        • Daryl – with their cap situation no one l repeat no one is safe. They have back themselves into a corner. Announcing the Lehner deal before having somehing in their pocket for MAF was probably one of the more stupid things they have done. Now maybe they realized getting rid of him wasn’t such a great idea and didn’t care – questionable but who knows. If they got what they wanted for him great if not we will keep him in the fold and rotate like they announced was the original plan As we have found out they are full of surprises. As bad as many believe he has become they could have something up their sleeve to justify their stupidy announcing something before having an alternative. Time will tell.

          • Daryl

            You are so right…. I really think if they rotated goalies as stated they had planned while working a deal for MAF they probably could have gooten what they wanted for him. They have nothing to barter with. This is probably their biggest screw up to date.

  2. VGK2020

    3 guys may be gone soon. Fleury, Stastny, and Holden IF they sign Pietrangelo.

    Fleury $7m, Stastny $6.5m, and Holden $2.2m= $15.7mill in cap space

    IF Pietrangelo is signed, then Holden becomes an overpaid 7th dman and must go.

    Stastny is still wanted back by Winnipeg, they said so recently. a younger, faster center like Krebs to replace him

    and of course, they need to dump Fleury’s cap hit without giving up too much in sweeteners. sign a vet backup goalie (Khudobin maybe?)

  3. Julie

    This sounds to me like Walsh is helping teams look at Fleury. Fleury staying will be in a real backup role, so if there is a place to be a starting goalie, I am guessing Walsh wants to get him out of Vegas.

  4. Rob

    I think you’re going to see Schmidt and Stastny get traded to clear space, possibly Marchessault too. They will have to buy out Fleury if they want him gone, since I think Walsh has been extremely crafty with Fleury’s no-trade list to make it virtually impossible for VGK to move him.

    • VGK2020

      the buyout window is now CLOSED

    • Daryl

      I definitely see them looking hard at moving Schmidt

    • Tim

      Rob your right I’ve been saying the same 3 for the last month. I don’t view Schmidt as that bad but the other two will be gone. Maybe they signed Holden to trade him and get a draft pick, This is our fourth year time to bring some kids up.

  5. Tim

    ST. Louis back in negotiations with Piertangelo and if he signs the Splash brothers have there work cut out. Please no Krug to much for not enough bang and may sign with Boston anyway. There are 20 goalie free agents what’s the chance of Fleury getting signed. What a fine mess you got us into this time Stanley.

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