The Toronto Maple Leafs and William Nylander entered training camp with the former first round pick having one-year left on his contract and no extension signed.
If the two sides don’t get a deal done, the Toronto Maple Leafs are at risk of losing Nylander next summer for nothing.
There have been rumours that the GM Brad Treliving wants a deal between $8-9 Million per season, while Nylander wants $10 Million or more.
Back in June, we looked at what fair value would be for the Calgarian-Swede which I believed was an eight-year deal worth $8.8 Million per season.
While it may be fair market value for Nylander, it makes no sense for him to jump to that contract right now. He is coming off his first 40-goal season, back-to-back 80-point seasons and is a lock for 30-goals a season. Even if Nylander was to have a down season, he has built up enough of a resume that the $8.8 Million per season would be the bottom end of contract offers he would receive on the open market.
If the $10+ Million is truly what Nylander is wanting, he would be requesting to be paid in a category that only 15 other players in the league earn.
So, who holds the cards in the negotiations? The team or the player?
Nylander could likely wait until next July and get a deal from any several teams in the area of seven years and $10 Million for a total of $70 Million. Assuming he isn’t traded.
However, what he won’t be able to get is that eighth year, which if the Treliving comes up to $9.5 Million, Nylander could walk away with $76 Million. In addition to the eighth year, the Maple Leafs organization can offer players something that not many teams can and that is a signing bonus.
Toronto Maple Leafs: The Signing Bonus is More Valuable Than You Think
While many players get a large amount of their contracts paid in some sort of salary bonus, no team pays more in bonuses than the Toronto Maple Leafs. From Capfriendly.com, of the 15 players making $10+ Million, only three make an annual salary of under $1 Million for each year of their contract and that is John Tavares, Auston Matthews and Mitch Marner.
Every player in the NHL has to earn a league minimum salary throughout the year and what the Maple Leafs do is offer their stars the minimum with them paying the rest of the contract in signing bonuses.
An average fan may think that the signing bonus isn’t that big of a deal as the player is just getting the money at a different time and no matter what they get paid the same amount at the end of the deal, however, the value of getting the money early drastically changes.
Auston Matthews signed an annual average salary of $13.25 Million that kicks in next July 1. As part of his deal, he actually gets $15.925 Million up front, nearly $3 Million four and a half years ahead of time rather than getting paid the same amount throughout the deal.
That $3 Million invested in safe S&P Index Fund compounding at 8% per year would see that money turn into approximately $4.1 Million over four years. This is just the one signing bonus and doesn’t take into consideration the other years and the contracts being front loaded.
A Nylander contract at $76 Million could actually be worth much more, however it makes no difference to the player if he signs the deal today or next June. The only risk Nylander takes is some sort of career altering injury.
The answer to who holds the cards is both Nylander and the team. The player’s value isn’t going to go below $8.8 Million and only the Maple Leafs can offer Nylander an eighth year and a front loaded contract heavy in signing bonuses.