You sort of expect it to happen every year, but it doesn’t. Yet, it’s totally legal according to the Collective Bargaining Agreement. Every single year, there’s a tool totally under-utilized by NHL General Managers for what seems to be a boys’ club unwritten rule. And then BOOM! There it is. A good young Restricted Free Agent signs a contract with a team other than their own. And the Montreal Canadiens shocked the hockey world on this Canada Day of by going for it, by signing a good young talent to an offer sheet. But it comes at what risk?
Desperate times call for desperate measures… and it seems like Canadiens’ GM Marc Bergevin has reached that desperation level. The Canadiens apparently were in discussions up until the very end with two high profile pending UFA’s in Matt Duchene and Anders Lee.
But as we know, Duchene put pen to paper with the Nashville Predators, a seven year deal worth $56 million. Tennessee has the third most attractive tax rate amongst NHL teams after the two Florida teams. In order to match the Preds’ average of $8 million, the Habs would have had to offer him around $71.4 million ($10.2M AVV) for the same net pay in Duchene’s pockets.
Having missed on Duchene, then the news came out that it was down to the Habs and the Islanders for signing Anders Lee.
But just before the official announcement that Lee had signed an extension with the Islanders, the Canadiens announced that they had signed restricted free agent Sebastian Aho to an offer sheet.
The offer sheet signed by Aho
While I won’t deny that Bergevin and his team had this option lined up for a while, it seems pretty obvious that it was plan C for them. Seeing that plan A (Duchene) and B (Lee) didn’t work, Bergevin certainly didn’t want to come out of yet another free agency summer without at least trying something. To me, this is a sign of desperation not because Aho isn’t a worthy candidate, but because Bergevin is willing to risk his relationship with fellow GMs to make something happen.
According to sources, Carolina got calls from 3 different teams today on Sebastian Aho, hinting at an offer sheet. The ‘Canes told them they would match any offer sheet. Carolina did tell them they would entertain trade conversation. Believe that Habs is among 3 teams who called— Pierre LeBrun (@PierreVLeBrun) July 1, 2019
What I will give full credit to Bergevin for is how he handled the situation. As mentioned by NHL Insider Pierre LeBrun, the Canadiens’ GM did call his homologue Don Waddell prior to presenting an offer to Aho. And in his press conference from Carolina, Waddell acknowledged that fact.
Bergy did things right though. Waddell did say that the #Habs contacted him trying to work out a trade prior to the offer sheet. #GoHabsGo
Bergevin a fait les choses proprement. Waddell a dit que les #Canadiens l’ont contacté pour compléter un échange avant l’offre hostile.— 📰 J.D. Lagrange 🎙 (@Habsterix) July 1, 2019
In his own press conference, Bergevin qualified his offer as tactical based on Carolina’s “situation”. It’s a well published fact that the Canes’ owner, Thomas Dundon is in hot water, having invested $250 million into the Alliance of American Football that shut down soon after. So their offer to Aho was heavily bonus structured, with all bonuses due on the first of July except the first one, due 5 days after the approval of the contract. Here’s how the contract is structured:
Aho agreed to a five-year, $42.27 million deal, coming with a cap hit of $8.45 million cap hit. As shown above, only $3.65 million of the $42.27 million is actual salary. The rest ($38.62 million) is bonuses.
Interesting to note that the first $11.3 million will be due 5 days after the contract is made official. Then he will get paid $700,000 the following season, with an additional $9.87 million bonus due on July 1st, 2020. Based on Gary Bettman‘s historical negotiation tactics, we may very well see a lockout that year, affecting revenues. So that’s a grand total of $21.87 million in hard cash within the first 12 months! Can Dundon swallow that pill?
According to Forbes the #Habs made $90 million at the gate, operating income $102 million.
Canes $27 million at the gate, -$3.9 operating income.
Dundon does not like to spend, and this team makes zero money…this week will be a hard one to guess what will happen.— Eric Lepine (@ericlepine26) July 1, 2019
The risk is real
As we’ve explored on this very blog, breaking the Code as GM can be costly. As former Philadelphia Flyers’ GM Paul Holmgren mentioned in Jay Greenberg‘s book “The Philadelphia Flyers at 50”, offer sheets can have serious repercussions. One of the reasons Holmgren stepped down from the general manager’s job was because he sensed other GMs didn’t want to deal with him after he signed restricted free-agent Shea Weber to a 14-year, $110-million offer sheet in 2012.
“It’s hard to do this job if you have a bad relationship, or at least a perceived bad relationship, with any number of GMs,” Holmgren told Greenberg.
Holmgren said that even though restricted free-agent offers are legal, they are “really frowned upon” and that his relationship with a lot of other general managers “changed.”
And it had. After the Weber offer sheet was signed and matched, Holmgren has completed 12 trades, all of them considered minor trades. To the point where he felt like it was best for the team to step down and let Ron Hextall do the General Manager’s duties.
With that information, you can choose to ignore this reality, like many fans I’ve exchanged with on Twitter by finding 1,000 excuses, or you can be legitimately concerned about Bergevin’s ability to further improve his team with the NHL GMs blacklisting him. Yes, it’s a “what if” scenario and no one is hoping more that yours truly that GMs will get over it. But ignoring that possibility is a huge mistake.
Either way, I’m truly hoping that the Habs are successful as Aho is a very good young player. Either way, the damage could already be done. Let’s hope not. Go Habs Go!