The Toronto Maple Leafs have built a reputation of using analytics and the Collective Bargaining Agreement to their advantage as they have the resources to do so. Using such things like Long Term Injured Reserve list for cap relief, assignments in the AHL to avoid waivers, and loaning players to other teams to help development just to name a few. While these have helped the Toronto Maple Leafs in the past, Kyle Dubas and his team need to look at the present and toward the future. More specifically, the situation involving William Nylander. The Toronto Maple Leafs are currently a month in to the season and have yet to sign Nylander.
While some are saying that it is a ploy to save the cap hit on future years of his contract, others have reported that he is asking for $8 Million whereas Dubas has his number around $6.5 Million.
I believe that there is one more option here which is a combination of both of those. I believe that the Toronto Maple Leafs are waiting until the right time (which I will explain) to sign William Nylander to a max deal for one year. That’s right, $15.9 Million for the rest of this season.
Now this may sound absurd to some, but hear me out for a minute. There were rumblings last season that the Toronto Maple Leafs would use their cap space this season to give John Tavares a $15.9 Million contract for one year to bring his next contract (which we assumed he would sign in Toronto) down in AAV. While the Toronto Maple Leafs were lucky enough to sign John Tavares at a team friendly $11 Million AAV, that means that a large portion of their cap space is unused this season. According to Cap Friendly the Toronto Maple Leafs currently have $11,435,887 in projected salary cap space from now until the end of the season.
That number will be important in just a second, but let me swing back to that earlier point where the later Nylander gets signed, the lower his cap hit will be after the first year of his contract. Cap Friendly posted a tweet back on September 27th where they had a chart of how much the Toronto Maple Leafs could save if they were to sign Nylander on different dates, contract lengths and salary. Depending when the Toronto Maple Leafs and Nylander come to an agreement, the first year would be prorated and then bring down the AAV of the years after this.
Is there a future cap benefit if #Leafs wait until after the season starts to sign Nylander?
Based on a league bylaw, RFA's who sign multiyear deals in-season see a higher cap hit in year 1, but a reduced cap hit in years 2+
Details ? https://t.co/WwjlPimlfH
Few examples ? pic.twitter.com/GNJY3vGj44
— CapFriendly (@CapFriendly) September 27, 2018
According to the graphic in the tweet, the highest savings can be obtained with a $7.5M AAV contract for Five years signed on December 1, 2018 (the last possible date to make him eligible to play this season), which is only $475,806 per year. What if Kyle Dubas doesn’t think that the $475,806 will be enough to keep the Toronto Maple Leafs afloat in those later years. What if he needs something more? Enter the $15.9 Million one year contract.
Cap Hit = Payment X (Days Remaining in Season / Total Days in Season)
Remember I mentioned that Nylander’s first year would be prorated because he signed the contract mid-season, well that can be used on a one-year deal also. In that tweet CapFriendly posted, they also included an equation that I found quite intriguing. For those who aren’t as fluent in math, it allows me to determine the prorated amount of that first year of the contract. My next step was erasing the future years from the equation. As you can see in the equation, it requires three numbers to give us the fourth. With the total days in the season, the days remaining in the season, and the payment, we can determine the prorated cap hit for Nylander’s contract. Now remember that I am using the projected cap hit to determine the date in which the Toronto Maple Leafs can sign Nylander to that $15.9 Million contract. Things can arise which change that projected number such as a player going on IR, sending a player to the AHL or any player transaction for that matter. I am not entirely sure how Auston Matthews being out for four to six weeks is calculated but I am assuming that the number provided is static and won’t change.
As you can see above, any date prior to November 23 would put the Toronto Maple Leafs above the number of the projected salary cap at $11,435,887. Nylander can not sign before November 23 without a transaction of some kind to provide the extra space needed. For Nylander to be eligible to play this season he will have to sign before the December 1st deadline, meaning for this to work there are eight possible dates which the signing can happen. As you can see, the longer the two sides wait, the more cap relief is provided to the Toronto Maple Leafs for this season. A whopping $598,387.10 difference in just eight days.
Above, you can see my calculations for determining how much money Nylander could potentially make over the two contracts if he were to take $15.9M this season. The reported asking price is $8 Million AAV for eight years which would provide a total dollar amount of $64 Million.
On the second line is a $7 Million AAV for eight years plus the $15.9 Million one-year contract for a total of $71.9 Million over the two contracts for nine years. This provides the team with $1 Million of cap relief during the second contract. This means that Nylander would be lowering his price $11,111 per year while also getting him a ninth year of guaranteed money. The third line is for a $6.5 Million AAV deal after the first contract of $15.9 Million, where Nylander would be lowering his asking price $455,556 per year to $7,544,444 AAV over the nine years but also providing the Toronto Maple Leafs with $1.5 Million of cap space below his asking. The last line you can see the number for a $6 Million AAV on the second contract providing the team with $2 Million in cap space and ending up with an AAV over the two contracts of $7.1 Million.
In summary, if William Nylander was to sign a $15.9 Million one-year contract, he would have to sign it after November 23rd and before the December 1st deadline. This would consume all of the Toronto Maple Leafs projected cap space this season, but if combined with a second long-term contract would provide a longer-term option which Nylander was looking for and a lower cap hit for the Toronto Maple Leafs to work with during the second contract.