While many players remain unsigned in this anything-but-normal offseason, we wanted to take a look at some of the highest-profile signings thus far. Joining forces with Sam Forstner (@SamForstner) and Idriss Bouhmouch (@thehockeycode), we employed a three-pronged approach, combining data-driven predictions (The Projection), thorough knowledge of the realities of the CBA and contract negotiations (The Reality), and how the player brings value to the table (The Process).
Stop us if you’ve heard this one before, but the 2020 offseason is far from a normal one. Our projections were built using historical data, drawing from past years in which fans were in seats and where general managers made roster investments with the confidence that they’d enjoy medium and long-term flexibility as the salary cap was widely expected to rise year-over-year. It was a challenge to estimate and account for the extent of the impact of key elements such as increased escrow, flat salary cap for the foreseeable future and uncertain hockey-related revenues across the league would have on this particular marketplace.
Today, we will take an in-depth look at the contracts signed by Alex Pietrangelo and Max Domi.
Signing Team: Vegas Golden Knights
Actual Contract: 7 years x $8.80 Million (Full NMC)
Projected Contract: 8 years x $10.539 Million
Projected AAV on 7-year contract: $9.783 Million (Expected to include a no-move clause)
Pietrangelo opted for a long-term and high-value contract, albeit with a somewhat more modest cap hit than our projections.
We predicted an eight-year term, as we like many St. Louis Blues fans out there thought the former Captain would be sticking around. This conclusion was in large part due to his point production (54 in 78 GP in 2017-18, 41 in 71 in 2018-19, and 52 in 70 in 2019-20), time on ice percentage, and special teams responsibilities.
Once again, we correctly identified that Pietrangelo would receive a no-move clause, and our lofty predicted salary of over $10.5 million was due to the aforementioned factors, as the player stands out as a bonafide all-situations number one defender.
In this case, we overestimated the player’s AAV on a seven-year deal by roughly $1 million, and we’ll further discuss below potential reasons for that deviation (beyond the aforementioned “it’s 2020” explanation).
Having control over his destination with a full no-move clause was clearly a priority for Pietrangelo. It was reported that St. Louis was hesitant to grant such a clause in order to preserve their own cap flexibility moving forward. This critical misalignment in what each party valued opened the door for Newport’s Mark Guy to explore other destinations for the former Stanley cup champion.
Additionally, signing in Vegas grants the player more cash in his pocket, where his effective tax rate will be roughly 39% instead of nearly 46% in St. Louis. This difference translates to the player taking home $695k more in after-tax dollars during the 2024-25 season, where he’s earning the highest total salary ($12.5M) in his 7-year deal.
Further, 56% of the contract consists of signing bonuses, and the contract is backloaded so that most of the money will be given out in years with far lower escrow than the 20% rate applied for the 2020-2021 season.
Last but certainly not least, the move is a compelling one for Vegas from a hockey perspective as well. In addition to being a cup contender at present, much of their core is locked in for at least the next three seasons (Pacioretty, Marchessault, Stephenson) and in some cases the next five (Stone, Karlsson, Lehner, Theodore). The management team of GM Kelly McCrimmon and President of Hockey Operations George McPhee has demonstrated that this team is in win-now mode, and the team has not hesitated to dole out significant financial commitments even in these uncertain times. Culture usually comes from the top, and there is no doubt that owner Bill Foley is committed to the success of his franchise in Vegas.
Vegas has the unique advantage of not having to fear the Seattle expansion draft, as they are exempt. We certainly expect to see the Golden Knights front office take advantage of the Kraken chaos which will take over the League in the next few months.
Finally, plugging in Pietrangelo on their right side allows him to mentor their young stud, right-handed defenseman Shea Theodore while potentially also being strategic with the deployment of Theodore’s minutes.
Signing Team: Columbus Blue Jackets
Actual Contract: 2 years x $5.30 Million
Projected Contract: 3 years x $5.380 Million
Projected AAV on 2-year contract: $5.270 Million
This was an interesting projection, as our forecast was relatively evenly split between Domi receiving a three-year and a seven-year deal. We chose to make a decision at the margin based on marketplace knowledge, and again it paid off, as Domi ultimately took a two-year deal.
To go along with his term projection, we predicted an AAV of $5.380 Million on a three-year deal or $5.270 Million on a two-year contract, both very close to what he actually signed for (3-yr: +$80k over actual, 2yr: -$30k under actual). Domi’s point production and specifically his playmaking abilities (36 assists in 82 GP in 2017-18, 44 in 82 in 2018-19, and 27 in 2019-20) drove his elevated cap hit projection even on a short-term deal.
While it’s somewhat more difficult to unpack the reasons for a projection with two divergent likely outcomes, some factors that worked in Domi’s favor include his offensive play-driving ability and time on ice percentage.
First and foremost, this is a win for the player and his agent Darren Ferris as this contract walks him to Unrestricted Free Agency (UFA). This is generally avoided, especially for high-impact players like Domi, as there is a real risk of losing the player for nothing in return (something Columbus knows all about with recent departures Artemi Panarin and Sergei Bobrovsky).
Naturally securing terms and money is the best of scenarios for the player, but Domi clearly had limited leverage. He didn’t match his 72-points season of one season ago and his arbitration eligibility which prevented him from offering his services to multiple clubs.
However, from the term’s perspective, GM Jarmo Kekalainen chose to go a low-risk route by only giving two years of term. If Domi doesn’t fit as the team’s second-line center, the Blue Jackets could potentially flip him at the trade deadline for assets (i.e. sell Domi as a rental) or simply choose not to give him an extension and expose him to Seattle at the expansion draft.
This stands in stark contrast to Montreal Canadians GM Marc Bergevin’s decision to grant Josh Anderson, the player Domi was traded to Columbus for, a lengthy seven years. Further, GM Kekalainen stuck to his managerial culture by not giving out any signing bonuses as part of this deal, and preserved flexibility moving forward by not doling out any type of no-move or no-trade clause. With some major decisions on the horizon for Columbus with star young players Pierre-Luc Dubois (negotiations are ongoing for the RFA with no arb rights), Seth Jones (UFA at the end of the 2021-22 season), and Zach Werenski (RFA with arb rights at the end of the 2021-22 season), the team was wise in taking a conservative approach to free agency.
Once again, the agent structured the contract to minimize the impact of escrow, with $4.3 million in the first year and $6 million in year two while allowing his client Domi to hit the market again hopefully under better conditions. There will always be demand for reasonably priced offensive-minded centermen who can distribute and drive play. Domi’s mixed experience in Montreal reinforces the idea that sometimes there just isn’t the optimal fit between organization and player. Style of play, depth chart, and timing are all things that influence a negotiation – this case was no exception.