Shea Theodore turned 23 years old today. (Happy birthday Shea, now stop reading this, it’s not ideal for you) He’s currently one of the best defensemen on the Golden Knights and is only scratching the surface of how good he can be. Theodore averaged 20:21 of ice time on the Western Conference Champions, he scored six goals, had 29 points, and a Corsi rating well over 50%. Simply put, as long as Shea Theodore is property of the Golden Knights, he’ll be a key cog in the future plans of this team.
All that being said, the Golden Knights do not have to, nor should they, offer Theodore a long-term deal right now, unless it’s on their terms, and by that I mean, really team-friendly terms. Let me explain.
Theodore is a restricted free agent (RFA) and does not have arbitration rights this offseason. Thus, per the NHL’s collective bargaining agreement, to retain Theodore’s services, the Golden Knights only have to offer Theodore a contract of about $1 million for one year (a qualifying offer). Again, as collectively bargained by the players and the owners, Theodore must sign that contract or he is not eligible to play in the NHL.
$1 million is a massive underpayment for a player of Theodore’s caliber and everyone knows it, but due to his lack of leverage, the Golden Knights hold all the cards… for now.
Next year, Theodore has arbitration rights and will be in the exact same situation the Golden Knights are dealing with in the William Karlsson negotiations. Three years after that, so four years from now, if he’s contract-less, he’ll become an unrestricted free agent.
So let me recap, before we move on.
Heading into the 2018-19 season (right now) – Age 23 – RFA
Heading into the 2019-20 season – Age 24 – RFA with arbitration
Heading into the 2020-21 season – Age 25 – RFA with arbitration
Heading into the 2021-22 season – Age 26 – RFA with arbitration
Heading into the 2022-23 season- Age 27 – UFA
Thus, the next four years, unless there’s an offer sheet (which hasn’t happened since 2007), if the Golden Knights want Theodore, they’ve got him, and aside from arbitration, he has very little negotiating power.
So, a one-year deal is out, because the Golden Knights benefit in absolutely no way giving him more money when they don’t have to.
A two or three-year deal doesn’t make a lot of sense for the Golden Knights either. Let me walk through the process of what happens if the Golden Knights do not offer that contract this season to explain.
- Year 1
- Theodore is extended a qualifying offer of about $1 million. He is forced to accept.
- Year 2
- Theodore is an RFA with arbitration rights.
- Vegas once again extends him the qualifying offer of around $1 million.
- This time, Theodore does not have to accept. Instead, he files for arbitration, looking for a raise.
- When the contract reaches arbitration, because the player was the one to file, the team gets to select the term (1 or 2 years)
- Arbitration awards Theodore his salary.
- Year 3
- If VGK elects 1-year term, he repeats Year 2 process again
- If VGK elects 2-year term, he gets paid that amount again
- Year 4
- Either he has a deal in place left over from arbitration in Year 3, or he’s once again eligible for arbitration.
Ok, now let’s play around with some numbers.
- Arbitration awards $3 million (Theodore remains steady)
- $1 million + $3 million + $3 million = $7 million = $2.33 million AAV over 3 years
- Arbitration awards $4 million (Theodore gets a little better)
- $1 million + $4 million + $4 million = $9 million = $3 million AAV over 3 years
- Arbitration awards $5 million (Theodore gets much better)
- $1 million + $5 million + $5 million = $11 million = $3.66 million AAV over 3 years
You can play around with it however you would like, and it gets especially interesting when you add the fourth year in there, but no matter what none of that looks bad for the Golden Knights. The reason for this is because arbitration is specifically designed to pay a player what they are worth.
Instead, it all looks pretty darn good from a team perspective. $2.33 million AAV for a darn good developing young defenseman is great. $3.66 for a defenseman who takes the next step and becomes borderline elite is an absolute steal.
It’s after Year 4 where things get tricky because that’s when Theodore becomes an unrestricted free agent (UFA) and could leave. So, the Golden Knights should be (probably are) looking for a deal with a length of five, six, or even seven years, to push back the timeline of when Theodore becomes an unrestricted free agent. But that deal has to be based mostly on what Theodore has shown to this point. Thus, as a good puck-moving defenseman with above average offensive abilities but prone to mistakes, and without the ability to negotiate with any other team but Vegas until 2023, Theodore is probably in the neighborhood of $3-4 million. Extend that over five or six years and you are looking at a potentially insanely team-friendly deal for what could be a perennial All Star in the future.
That’s the kind of team-friendly deal the Golden Knights should be looking for, otherwise, there’s no reason to extend him long term. Instead, force the qualifying offer and play the arbitration game next year and the following and so on. As shown above, the “worst” case scenario, which involves Theodore playing incredible hockey (for the Golden Knights) year in and year out, isn’t bad at all. If there’s one year of slippage, arbitration will not be as kind.
Younger players simply do not have much negotiating power under the current CBA. George McPhee knows this and in order to manage their cap as best as possible, he has no choice but to take advantage of it.
I like Shea Theodore, I would love for him to be a Golden Knight well into his 30s, and that may end up being the case, but right now, understanding the way the system works, if he’s not willing to take a long-term deal at a very reasonable price, there’s no reason to lock him up now.