Two Contract Extensions Down, Two to Go
One thing that the Philadelphia Flyers have been diligent about doing in recent years is making sure that key players receive contract extensions before they reach restricted or unrestricted free agent status. This has by no means guaranteed that the team's long-term plans would not change and the player traded within a year or so of the contract extension (Mike Richards, Jeff Carter, James van Riemsdyk), but the organization has at least been consistent about accomplishing the extensions in the first place.
Heading into the 2013 offseason, the Flyers were faced with a situation in which four key players -- Claude Giroux, Sean Couturier, Brayden Schenn and Matt Read -- were eligible to negotiate for contract extensions prior to reaching free agent status in the summer of 2014. Read can become an unrestricted free agent next summer, while the other three would become restricted free agents barring a pre-emptive contract extension.
Understandably, getting a long-term deal done with Giroux was the team's number one priority. The team captain is unquestionably the club's best player and would have been one season away from possible unrestricted free agent status in 2015 had a deal not been worked out to lock him up for both his final RFA offseason (2014) and potential UFA seasons beyond that.
It was a foregone conclusion that Giroux would get a huge raise off his current $3.75 million cap hit and receive the maximum eight-year extension allowed under the new Collective Bargaining Agreement. His new deal will carry an $8.275 million cap hit come 2014-15, requiring an additional $4.525 million of cap space to accommodate the contract.
While it is will not be known for certain until after next season how much the NHL salary cap ceiling will increase for 2014-15, the early projections are generally in the range of $5 million to $6 million. Beyond that, the Flyers currently would have an additional $10.825 million of salary cap space created if Kimmo Timonen ($6 million cap hit) retires and neither Andrej Meszaros ($4 million) nor Bruno Gervais ($825,000) are re-signed as UFAs.
In other words, despite Giroux's huge raise and the multi-year acquisitions of Vincent Lecavalier ($4.5 million cap hit) and Mark Streit ($5.25 million), Philly would have no trouble budgeting in all three players for 2014-15 while also continuing to work on contract extensions for Couturier, Schenn and possibly Read.
Yesterday, the Flyers signed Couturier to a two-year "bridge" contract. The deal represents a modest real-dollar pay raise and a 2014-15 cap hit increase of just $375,000, taking Couturier from the $1.375 million cap hit of his entry-level contract to $1.75 million come 2014-15.
This was a good deal for both sides. Couturier did not have much leverage this summer. He wasn't going to get a huge raise in Philly by signing early nor could he bank on a potential offer sheet from another team next summer. Meanwhile, he is not being financially "punished" for being primarily a defensive center at this point of his career. If he breaks out offensively within the next two seasons, he will be in position to make a lot more money in a future extension (he'll be eligible in the summer of 2015) or via arbitration or restricted free agency in 2016.
For the Flyers, it means that they get one of their key young players signed for the next two years at cap-friendly costs before they have to worry about another renegotiation. It also means they are not overpaying Couturier based solely on perceived future offensive potential rather than what he's demonstrated to date as a pro.
With the Giroux and Couturier extensions accomplished, the team can now turn its attention to Schenn and Read. As with Couturier, Schenn's current bargaining leverage is somewhat limited based up his current entry-level contract, demonstrated NHL production to date and the fact that he's a restricted rather than unrestricted free agent next summer. Read has more leverage to get a substantial raise based on being an unrestricted free agent next summer and being underpaid in his current contract relative to what comparable NHL players can receive on the open market.
Schenn's entry-level contract is a rather unusual one in its structure. Originally signed when he was a member of the Los Angeles Kings organization, the current deal is largely
steeped in performance bonuses. Although the full cap hit is a hefty $3.11 million, he has not collected anything close to that in terms of real-life paychecks.
Under the terms of his entry-level contract, Schenn's deal carried a relatively modest base salary of $900,000 in the first two seasons and $810,000 for the 2013-14 season. For Schenn to collect the maximum $2.35 million in bonuses he's eligible for next season, he'd have to have All-Star season, finishing among the league's point leaders and win a major NHL award.
If Schenn were NOT to sign this summer and have a major breakout season in 2013-14 then, yes, his next NHL contract would carry a higher cap hit than his current deal. However, what is more likely is that he'll continue to progress at a more modest pace.
As with Couturier, if Schenn opts now for the security of having a two-year or three-year bridge extension in his back pocket, the Flyers will pay him something akin to his current cap hit based on projected future development. In exchange, if he has a big breakthrough in production by the end of the 2014-15 or 2015-16 season, he'd have substantially more leverage the next time he becomes eligible for an extension.
I have no idea what numbers have been tossed around between the Flyers and the Schenn camp for a possible extension this summer. What I think could happen, though, is that his next deal will be what I described above. His cap hit will NOT increase from his current $3.11 million and actually could decrease in exchange for him receiving a much higher base salary (guaranteed money). I would say that a three-year deal in the ballpark of $9 million total value ($3 million cap hit) or a two-year deal in the range of $5 million total value ($2.5 million cap hit) be a good deal for both sides.
Assuming he does not re-sign early and stays healthy next season, Read is going to get a big bump on his current $900,000 deal. Something that many people fail to understand about NHL salary structures ("Player A is a better player than Player B, so why is Player B making more money?") is that unrestricted free agent eligibility inflates a desirable medium-range NHL player's salary potential well beyond what a non-star player would make during his RFA years.
Right now, Read is one of the NHL's biggest bargains. A versatile two-way role player who can play all three forward positions, play in all game situations, adapt to fit the responsibilities of playing on any of the four lines and has demonstrated the ability produce a 20-plus goal season in the process is an absolute steal at $900,000.
Unfortunately for the Flyers, Read's open-market value come next summer could potentially more than triple his entry-level deal. If he's going to sign an extension this summer or at any point before July 1 of next summer, the Flyers would have to pay him along the lines of a projected full market value. That could mean something like a three-year extension in the neighborhood of $9 million in total value; a cap hit of about $3 million.
It is hard to say if the Flyers would go that high for Read right now or if his agent is even advising him to try for an early extension rather than seeing what next season brings and potentially test the UFA market next summer. There is risk for him in doing that, however. If Read gets hurt again next season and/or has an unproductive year, the aforementioned market value would decrease significantly.
With that in mind, I would not be surprised if Read as well as Schenn ends up signing a contract extension. It may or may not happen this summer, but it very well could happen with plenty of time to spare before the next restricted and unrestricted free agent markets open on July 1, 2014.
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Sunday Reader Poll: The Flyers Teams of Your Heart
As frequent readers of my blog know, I do quite a bit of writing on Flyers' history. I will be 43 years old in September and I have been a hockey fan almost as far back as I can remember. Even as a young child, I was enthralled with the Broad Street Bullies teams and I've been obsessed with hockey ever since.
That manifests itself in my writing. I frequently talk about players spanning the entire history of the organization, dating back to three years before I was born. However, I realize that a significant percentage of HockeyBuzz readers and current-day Flyers fans either are too young to remember the Bullies era and Mike Keenan-era teams or started following the team later; perhaps in the Eric Lindros era or the 2000s.
I would be interested to find out what the readers' favorite era of Flyers hockey (meaning, the one to which you have the strongest emotional attachment) AND when they first became a fan. In most cases, it will be one and the same answer but some may prefer another time period in club history.
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Former Flyers forward Ian Laperriere, now the organization's Director of Player Development, will be participating in the Ironman Mont-Tremblant: North American Championship on August 18. Apart from competing in the triatholon, Lappy is raising funds for a variety of charitable causes: the IRONMAN Foundation, Ronald McDonald House, the National Pancreatic Cancer Foundation and Go4theGoal Foundation- Tunes4Teens. Laperriere has set a $10,000 fundraising goal. For more information or to make a donation,
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