[Signing] Leafs sign Auston Matthews to contract extension (5 yrs, $11.634 mil AAV)

[Oling_Roachinen]

Originally Posted by Enoch Root

2) From a player's perspective, I understand the allure of a shorter term, and it isn't about bolting to another destination, it is about being a free agent at 26 and being able to sign a max term, max dollar deal. Being a FA at 26 is completely different than being a FA at 29 or 30. At 30 (and higher) teams are very leery of too much term. But at 26? "Give him what he wants!" Also, there appears to be a strong expectation that contracts will continue to rise rapidly.

I think another reason is that it almost gives them the ability to have an additional big contract. If you signed max term for both contracts, that's 16 years, plus the 3 ELC. That's pretty much your entire playing career and might not be a ton of suitors looking at a 36 or 37 year old.

18-21 ELC
21-29 2nd contract
29-37 Final contract

But two shorter contracts:

18-21 ELC
21-26 2nd contract
26-32 3rd contract
32-39 Retirement contract

GM's do have a shelf-life and at 32 they can still get in 4 or 5 years of productive years for All-Stars without people really taking a second look at the contract length. But sign a 37 year old to a 3 year contract and they look almost desperate - like the Leafs giving Marleau's his contract.

[nik-]

lol

https://twitter.com/user/status/1092886567151169537

Not sure what the US share of the tax bill is.

[Textcritic]

Originally Posted by PeteMoss

Tkachuk won't fold. Its going to be a tough deal to make. His family has money.



His dad signed an offer sheet as an RFA (witch Chicago, matched by Coyotes) which was front loaded and then held out mid-contract until December one year (with Coyotes).



The old 'do what's best for the team' thing is going to be a tough sell.

I don’t believe Tkachuk will take a “hometown discount” for the good of the team, but I also don’t expect Treliving to be the one to flinch. I know the history with Kieth Tkachuk’s holdouts, but this situation is quite different. Unlike Walt—who played for a crappy team in godforsaken Winnipeg—Matthew will risk missing time on what could potentially be a Cup contending roster. That’s a very sensitive pressure point, which is not something that his dad really had to deal with.


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[transplant99]

Just pointed out on Tim and Sid...

Matthews will have the 2nd highest AAV in the NHL next year.

He is 82nd among forwards in icetime.

Babcock is going to have to start using him more.

[The Cobra]

Originally Posted by PeteMoss

Crosby's contract as a percentage of cap when signed: 13.53%
Matthew's contract as a percentage of cap when signed: 14.63%

Less than 1% difference.

Crosby's also has 3 years tacked on to the end with a low value as it was signed back when that was allowed.

Except that Crosby's covered all of his UFA years, Matthews just 1 UFA year.

Huge difference.

Matthews contract is arguably the beat contract ever signed by a player. Got the huge money, committed few UFA tears, and is still a UFA when he's very young.

[transplant99]

On July 1 of this year the Leafs have to pay out 50 Million dollars in signing bonuses to 8 players.

[Textcritic]

Originally Posted by The Cobra

Except that Crosby's covered all of his UFA years, Matthews just 1 UFA year.

Huge difference...

I think the point stands, though: It is unfair to compare new contracts to Crosby's last deal which is structured in such a way that is no longer permitted.

[Robbob]

Originally Posted by The Cobra

Except that Crosby's covered all of his UFA years, Matthews just 1 UFA year.

Huge difference.

Matthews contract is arguably the beat contract ever signed by a player. Got the huge money, committed few UFA tears, and is still a UFA when he's very young.

In 5 years he will probably sign 7 or 8 year deal worth well north of 100M. Never thought I would see a NHLer get to 200M career earnings.

[delayedreflex]

Seems like this is going to make negotiations extremely painful for GMs for the upcoming batch of RFAs, since they're all going to point to this Matthews contract with all that money up front. $15M each year for the first two years blows away any notion that "RFA years should be worth less than UFA years". I suppose the heavy signing bonus structure is taking full advantage of the Maple Leafs' big market bankroll, but I am sure other GMs and owners are hating this.

[Enoch Root]

Originally Posted by Weitz

93.1%?

lol

For some reason, I used $11M for Matthews. Oh, the ironing...

[GioforPM]

Originally Posted by PeteMoss

Tkachuk won't fold. Its going to be a tough deal to make. His family has money.

His dad signed an offer sheet as an RFA (witch Chicago, matched by Coyotes) which was front loaded and then held out mid-contract until December one year (with Coyotes).

The old 'do what's best for the team' thing is going to be a tough sell.

Tkachuk won't be easy, and his dad is tough, but so is Treliving. And Tkachuk loves to play, and is way earlier in his career than when Keith was a holdout. Keith was happy sitting around and getting fat.

[Oling_Roachinen]

Crosby's first contract (after ELC) was:

43.5M/5 years, 8.7M cap hit. That was 17.30% of the cap at the time.

Matthews first contract (after ELC) was:

58.15M/5 years, 11.63M cap hit. That was 14.63% of the cap today.

Crosby still got significant more of the cap after his ELC...

Once again, people fail to see how high the cap has risen. You'll be surprised in 4 years when another star player signs another huge contract when the cap goes up even more thanks to Seattle.

[Bunk]

Originally Posted by nik-

lol

https://twitter.com/user/status/1092886567151169537

Not sure what the US share of the tax bill is.

If the league views this structure with an Average Annual Value of $11.634m, perhaps our tax laws should too. This is very plainly tax evasion!

[Enoch Root]

Originally Posted by nik-

lol

https://twitter.com/user/status/1092886567151169537

Not sure what the US share of the tax bill is.

Interesting.

So (assuming Matthews qualifies as a non-resident in Canada, and I would assume he would), he is essentially just a US taxpayer, with no state tax. In other words, other than the $700K per year salary (and who gives a #### about that), he will pay the same taxes he would if he were in Texas or Florida.

(for clarity: he would pay the 15% in Canada, but get a tax credit for that in the US, so he effectively just pays his US taxes)

Nice job, Mr Matthews agent!

[Enoch Root]

Originally Posted by Bunk

If the league views this structure with an Average Annual Value of $11.634m, perhaps our tax laws should too. This is very plainly tax evasion!

Well, it isn't tax evasion.

But yeah, you would think it will get the attention of CRA and they will take a very good look at it.

[The Fonz]

Originally Posted by Enoch Root

Well, 88%, but math is hard.

Hard, indeed.

[Weitz]

Originally Posted by Enoch Root

Well, it isn't tax evasion.

But yeah, you would think it will get the attention of CRA and they will take a very good look at it.

I'm no tax expert but:

Canada’s Taxation of Non- Resident Employee Athletes
Under Canada’s domestic tax rules, non-resident employee athletes must file a Canadian tax return and report all salaries, fees, and performance-related bonuses relating to services rendered in Canada. In addition, the non-resident athlete must report a signing bonus relating to an agreement to perform in Canada. More specifically, the athlete must report the bonus to the extent that a Canadian taxpayer can deduct that payment from its income.

But a tax treaty may provide relief from Canadian tax. For instance, the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital ( (the “Canada-US Tax Treaty”) generally allows Canada to tax US athletes on income earned from a performance in Canada. But this rule does not apply to the employment income of an American athlete who competes in a league with regularly scheduled games in both Canada and the United States. In this case, the Canada-US Treaty applies a 183-day test: The non-resident athlete pays Canadian tax on his or her employment income only if his or her presence in Canada exceeds 183 days. So, whether a non-resident league athlete pays Canadian tax generally depends on whether he or she is employed by a Canadian- or US-based franchise.

https://taxpage.com/articles-and-tip...dent-athletes/

Sort of sounds like since the NHL runs over 6 months someone like Matthews pays Canadian tax due to the Tax treaty?

[nik-]

Is a signing bonus a performance related bonus?

edit: derp, next line

But this just suggests that the income is taxable, it doesn't confirm it's all taxed at the same rate.

[Jacks]

His agent must have threatened to go to offer sheet, the Leafs pretty much gave everything.


BTW, why are people comparing Matthews to Crosby? Sid is/was a tier above.

[Enoch Root]

nm