Friedman: Gaudreau negotiations will be put on hold during World Cup

[sureLoss]

An agent went on Buffalo radio and explained how insurance would work for unsigned players at the World Cup:

http://www.todaysslapshot.com/nichol...nce-questions/

“Well, there’s certainly risks for the teams on any player, signed or unsigned,” agent Steve Bartlett noted on Buffalo’s WGR 550 Tuesday morning. “No matter what the contract status, you don’t want to lose an asset. I guess that’s the risk that goes along with the game.

“But from the insurance standpoint, the way it works… the NHL contracts that the players have in place are covered in the World Cup just as though they were playing for their NHL team. So if a player has a multi-year contract – three, four, five, six, whatever years it may be – and they get injured in the World Cup, they get paid as long as that contract would be if they’re injured and can’t play.

“As far as the unsigned – or I have a guy who has one year left on his contract – they go ahead and make sure that you have at least the equivalent of two years’ coverage. The maximum is $3.5 million that they will cover, but at least in the case of my player, who is making less than that at this point, they project that he’s going to sign a new contract that will be of a significant level and go ahead and give him coverage for the year that he’s not covered. Or, in the case of an unsigned player or a restricted free agent, they would cover him for two years.

“So I think at the end of the day, the player is reasonably well-covered. There’s always some risk, but there’s nothing that can protect the team if someone were to go out and they lose an asset. But I guess the World Cup, you almost have to look at as an extension of NHL play to some degree, and I know team competitiveness-wise, everyone is sharing some risk with their best players being there. I guess much like the Olympics, or even the world championships, it’s hard to take all risk out of the game.”

Whether it’s a restricted free agent like Johnny Gaudreau – a young star without a contract in line for a large payday – or someone similar, should projected career earnings be covered in case of a potential career-ending injury?

“Well, it’s like all insurance. You have to balance the cost versus what you get,” said Bartlett. “The one point I will make about career-ending disability insurance – if someone literally were not able to play – that insurance comes to the player tax-free. So, in essence, when you figure a tax rate for a professional athlete, to cover $10 million of earnings, you probably only have to insure $5 million because it’s tax-free – as opposed to a taxable salary.

“But again, I don’t think you’re ever going to – within a reasonable cost to the player, unless someone says, ‘Hey, I don’t care how much it costs. I’m going to go out and spend $200,000 to buy $20 million of insurance,’ or whatever it may be. But it’s pretty staggering. Especially if you’re an older player. The insurance market works that the younger players, the cost of insurance is less. They worry about players who have a little more mileage on them, and who are maybe closer to being in a position where, ‘Okay, that’s a career-ending injury.’

“The younger the player, the cheaper the insurance. So Gaudreau, for instance, would be able to insure himself for a lot less than Jaromir Jagr.”

[pseudoreality]

So I am still confused about this. Let’s say Jonny plays in the World Cup without a contract, gets a broken leg or torn MCL or something else that sidelines him for half the season. It’s in the best interest of the Flames to continue to negotiate with him in good faith as he’s a long-term asset, but there’s no rush to get a deal done if he can’t play right away. So would he get insurance money at that time? How much? Would it be at last year’s contract value or his next one?

[sureLoss]

Originally Posted by pseudoreality

So I am still confused about this. Let’s say Jonny plays in the World Cup without a contract, gets a broken leg or torn MCL or something else that sidelines him for half the season. It’s in the best interest of the Flames to continue to negotiate with him in good faith as he’s a long-term asset, but there’s no rush to get a deal done if he can’t play right away. So would he get insurance money at that time? How much? Would it be at last year’s contract value or his next one?

He would likely continue to get paid by insurance for whatever he was insured for.

What ever he ends up signing for is immaterial IMO. He buys insurance for X amount of $ and if he gets hurt his insurance will pay out X at the agreed upon rate.

[JohnnyTitan]

It sounds like in your example pseudoreality - where Johnny blows out his knee and misses half a season:
- An unsigned Gaudreau would only be eligible through the NHL / NHLPA for 50% of a maximum $3.5M insurance policy.
- A signed Gaudreau would get 50% of his actual contract amount...which most around here expect to come in at around double - $7M.

And that's just a half-season injury. The longer he's out, the more it would cost him.

Of course, that's just what the NHL / NHLPA will cover him for. I'm sure he could buy additional coverage...at his own out-of-pocket expense.

Summary (in my mind) -> there is good financial reason for Johnny Hockey to be under contract by mid-September!

[sureLoss]

^ keep in mind Friedman said Gaudreau already has bought the extra insurance.

[Street Pharmacist]

Originally Posted by sureLoss

^ keep in mind Friedman said Gaudreau already has bought the extra insurance.

But that wouldn't pay him for a similar salary as what's expected, would it?

[FlamesAddiction]

I wonder if any teams are thinking of making an offer sheet if he remains unsigned for much longer. Or if Gaudreau's agent starts looking for one just to get the move on.

[sureLoss]

Originally Posted by Street Pharmacist

But that wouldn't pay him for a similar salary as what's expected, would it?

That would depend how much he is willing to pay for insurance and like the agent said, disability insurance payouts are tax free so to get equivalent $ back you only have to insure yourself for roughly half your expected before tax salary.

[sureLoss]

Originally Posted by FlamesAddiction

I wonder if any teams are thinking of making an offer sheet if he remains unsigned for much longer. Or if Gaudreau's agent starts looking for one just to get the move on.

They can think all they want, Gaudreau isn't eligible to sign an offer sheet.

[FlamesAddiction]

Originally Posted by sureLoss

They can think all they want, Gaudreau isn't eligible to sign an offer sheet.

Oh, I didn't realize that.

[Toonage]

So if Gaudreau signs prior to the World Cup is he SOL so far as money paid out for insurance? Not that it matters, I'm sure he can afford it, I'm just curious.

[calgaryblood]

Originally Posted by Toonage

So if Gaudreau signs prior to the World Cup is he SOL so far as money paid out for insurance? Not that it matters, I'm sure he can afford it, I'm just curious.

Makes no sense for him not to keep it to the last second.

[Rick M.]

Originally Posted by sureLoss

^ keep in mind Friedman said Gaudreau already has bought the extra insurance.

Do you think he might be bluffing?

[Enoch Root]

Why buy it so early? Why not wait until he knows he needs it?

More likely that he has simply priced-out the insurance.

[Textcritic]

Originally Posted by sureLoss

^ keep in mind Friedman said Gaudreau already has bought the extra insurance.

Did he say that Gaudreau already purchased insurance? From what I can recall Gaudreau said that he intended to buy insurance for the WC in the event that he was without a contract.

[sureLoss]

Originally Posted by Textcritic

Did he say that Gaudreau already purchased insurance? From what I can recall Gaudreau said that he intended to buy insurance for the WC in the event that he was without a contract.

The quote was "Players can purchase extra insurance to cover themselves and it’s believed he did so." from the OP.

[TheScorpion]

http://www.todaysslapshot.com/from-t...ontract-front/

Friedman: Nothing imminent on Gaudreau contract front

“It’s not imminent, from what I understand,” relayed Friedman. “Johnny Gaudreau put a bit of a soft deadline on this for the World Cup of Hockey; that once he reports for the Team North America lineup on Sunday, there will no discussions that involve him until after the World Cup is over. And I’m told it seems unlikely it’ll be done before then.

“One of the things I’ve tried to check and see is if there’s a short-term deal in the possibility here. It doesn’t sound like it. It sounds like both sides are looking at a long term. I’ve been told they’re grinding away, trying to get things done, but it doesn’t look like anything is imminent – even with the Monahan deal done – with the Gaudreau one.”

[Cappy]

Originally Posted by TheScorpion

http://www.todaysslapshot.com/from-t...ontract-front/

Friedman: Nothing imminent on Gaudreau contract front

Well that is atleast nice to hear that Johnny is thinking long-term as opposed to leaving first chance he gets.

I could imagine JG wants top 10 player money for the next 7-8 years, Flames are looking for something less.

[Tinordi]

I think the sticking point is on the length. If you're Gaudreau you want your deal to end a year before Monahan's. Much more leverage that way when you're the first guy up to be re-signed. Conversely, the Flames probably want both players expiring in the same year so they have more flexibility on who they re-sign or on their package cost.

[Hot_Flatus]

Originally Posted by Enoch Root

Why buy it so early? Why not wait until he knows he needs it?

More likely that he has simply priced-out the insurance.

You usually can't just buy an insurance policy for 12 days or whatever. He probably had to commit to 30/45/60 days or something and decided to do it earlier than later.

Either way I'm pretty convinced this wont be decided until October now....hopefully early October.