Courtesy of Point Park University

How NHL lockout threat affects new contracts


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Victor Hedman's deal is partially lockout-proof. -- MATT SUNDAY / DKPS

The current NHL collective bargaining agreement is set to expire following one of two upcoming seasons, setting up the possibility for a lockout.

As it stands, the CBA will expire following the 2021-22 season, which could possibly lead to a lockout during the 2022-23 season. The NHL and NHLPA each had the right this summer to decide to end the CBA in 2020, which could lead to a lockout in 2020-21. The NHL notified the NHLPA that it will not opt out of the current CBA early, and the NHLPA has until Sept. 15 to make its decision.

In short, if a lockout were to happen, it would either be in 2020-21 or 2022-23.

Now, if there is a lockout, players don't receive any of their base salary, and obviously no performance bonuses. The only fully guaranteed money in any NHL contract are the signing bonuses. The player doesn't have to play a single game that season — he could even be bought out — and he would still receive his signing bonus in full.

While the name may suggest that the bonus is given out at the time a player actually signs, these bonuses can be structured in a way that they’re given in any or all of the years of the contract.

Some players have nearly their entire contracts paid out in signing bonuses, making them almost fully guaranteed. In 2018-19, John Tavares made the league-minimum $650,000 in base salary, and $15,250,000 was paid out in a signing bonus. For the remainder of his contract, his base salary is only $910,000, with anywhere from $7,040,000 to $14,990,000 being paid out in signing bonuses. No matter what happens, Tavares is getting paid.

Artemi Panarin's contract is structured in a similar way. His base salary for all seven years of his contract is $1 million, and his signing bonuses range from $7 million to $13 million each year.

Contracts like those of Tavares and Panarin are typically reserved for highly coveted free agents, or a team re-signing a franchise player. They're not common, because if things go awry, it makes it difficult for a team to unload the contract.

A trend we're seeing now, though, is contracts being partially or fully guaranteed for just the two potential lockout seasons.

Victor Hedman was one of the first players to earn one of these contracts. He signed an eight-year extension with the Lightning in July 2016 with an average annual value of $7,875,000. He receives a signing bonus in each of the 2020-21 and 2022-23 seasons, and then again in the final two years of his contract, each for $3 million. His contract isn't entirely lockout-proof, but he still gets paid his partial salary in the event of a work stoppage.

Leon Draisaitl's contract extension is an example of a contract that is almost entirely lockout-proof. He signed an eight-year extension with the Oilers in August 2017, and his contract carries an average annual value of $8.5 million. He only has signing bonuses written into two years of his contract: 2020-21 and 2022-23, each for $7 million. His base salaries in each of those years are $2 million and $1 million respectively. This ensures that in the event of a lockout in either of those seasons, Draisaitl still gets paid.

The Coyotes signed Clayton Keller to an eight-year contract extension on Sept. 4 that was clearly impacted by the threat of a lockout. The contract is set to kick in beginning in 2020, following the expiration of his current contract, and carries an average annual value of $7,150,000. He receives a $3 million signing bonus in each of the possible lockout seasons, as well as a $2 million signing bonus in the final two years of the deal.

Jacob Trouba is another example of a partially lockout-proof contract. On July 19, he signed a seven-year contract with the Rangers with an average annual value of $8 million. His contract is front-loaded, and $22 million of the contract's $56 million value is paid out over signing bonuses in the first three seasons. In the event of a 2020-21 lockout he only stands to lose up to $2 million, but in the event of a 2022-23 lockout he stands to lose up to $6 million.

Who on the Penguins already has a lockout-proof deal, and who is due for a contract extension in the coming years and could potentially receive a lockout-proof extension?

Evgeni Malkin's current contract is actually already partially lockout-proof for the 2020-21 season. His eight-year deal carries an average annual value of $9.5 million, with the first six years of his contract receiving the straight $9.5 million through base salary. For the final two years of his contract, in 2020-21 and 2021-22, he receives $5 million through signing bonuses in each year and $4.5 million in base salary each year. If a lockout happens in 2020-21, he's partially protected. If the NHLPA doesn't opt out of the current CBA early, leaving the possibility for a lockout in 2022-23, he could try to secure a lockout-proof deal when signing an extension.

Matt Murray's contract is set to expire following the upcoming season, and a lockout-proof deal could be a factor in negotiations.

Brandon Tanev's six-year deal carries an average annual value of $3.5 million. In each of the six years, his base salary is $2.5 million and he receives his signing bonus, making the contract partially lockout-proof in each of the two possible lockout seasons, and partially buyout-proof, as well, for the duration of the contract.

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