Aho Offer Sheet: Bergevin Skating On Thin Ice?

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.

Matt Duchene tells @DavidAmber he was close to signing in Montreal. Has tremendous respect for that franchise.#signingseason— John Shannon (@JSportsnet) July 1, 2019

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.

All signs point towards the #Habs and #Isles battling for Anders Lee— Andy Strickland (@andystrickland) July 1, 2019

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.”

Marc Bergevin

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!

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The Skinner Effect on Pacioretty? Not So Fast!

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The market value of a player is a constant moving target, everyone knows that. There are so many things factoring into how much players are worth, particularly when it comes to trade value. Age, production, health issues, statistics… and yes, even intangibles such as off-ice antics, grit and leadership. But really, a players isn’t worth what most General Managers would give up for that player, but rather what only one GM is willing to trade away to acquire him. Only one. And when assessing that, there are even more factors playing into what they are willing to sacrifice in order to get rid of or acquire a player.

We had a good example of that on August 2nd when the Carolina Hurricanes traded away Jeff Skinner to the Buffalo Sabres for what seems to be a relatively low return. Skinner, a 3-times 30 goals scorer, only has one year left to his contract and Hurricanes’ GM Don Waddell “settled” for a former third round pick in Cliff Pu, Buffalo’s second round pick in 2019 as well as their third and sixth round picks in 2020. Call it what you want but value-wise, this is low return for a proven NHL goals’ scorer.

Some people are quick at saying that Buffalo won that trade hands-down, but this will prove to be true only if they manage to re-sign Skinner or if they manage to get significant assets in return for him at the trade deadline if they don’t get him re-signed. If he walks away next summer, it will be a steep price to pay. But that’s beside the point.

Effect on Pacioretty’s value?

Many people were quick at pointing out that this trade should set the benchmark for Max Pacioretty‘s value in a trade. This is, in my opinion, a very superficial analysis of the Pacioretty situation. Yes, Skinner is a winger with one year left to his contract and yes, he has scored similarly to Pacioretty (in a shorter career though) but that’s where the comparison ends. One plays in all situations including short-handed, the other one doesn’t. And one is captain of his team, voted by his teammates. Skinner also had a no-trade clause, which Pacioretty doesn’t have, and came with a cap hit of $5.725M, which is over a million dollars more than the Canadiens’ captain. But then again, that’s all superficial.

In my humble opinion, Skinner is worth more than what Carolina received for him but there is no doubt that the Sabres had the best offer out there – at that time – and that’s the return that they got for him. Don Waddell settled. He’s sitting at the poker table, he flinched and panicked. Whether he was forced or not to trade Skinner at that time, only he knows, but this moves smells desperation. And for an experienced GM like him, that’s a no-no. Unless Skinner had requested a trade and had threatened to not show up at training camp (and even then), Waddell should have hung on to Skinner and even started the season with him in the line-up instead of giving him away for less than his value. That’s my opinion anyway.

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Marc Bergevin is holding for higher value for Max Pacioretty

Contrarily to Waddell, Canadiens’ GM Marc Bergevin has chosen to take the same approach as Joe Sakic did with Matt Duchene, and what Steve Yzerman chose to do with Jonathan Drouin back then: if the price isn’t what you feel is true value is at this moment in time, hang on to your asset. Someone will come calling later. Every team is a contender in August but injuries happen during a season, teams and GMs get desperate. Further, it seems rather obvious that Bergevin, for a second year in a row, won’t be spending anywhere close to the salary cap and that, even with Carey Price‘s new contract kicking in. This means that he will be able to accommodate a team by taking a contract to get more in return if or when he trades Pacioretty. But as we touched on recently, the Canadiens are, under no circumstances, in a position where they have to trade their captain.

So what’s Pacioretty’s value? His value is what ONE General Manager is willing to pay at a point in time. This will be dictated by the level of desperation that said GM will be in, and how Pacioretty picks up his game after a bad season, in what is now a contract year for him. In addition, a positive twist with Skinner being traded is that it’s one less asset available for those teams looking for a quality scoring winger. That also has an effect on value. Will the Canadiens get more for Pacioretty by choosing to wait? Time will tell but what we know now is that the offers aren’t anywhere close to his value.

In the meantime, be grateful that it’s Bergevin and not Waddell who runs the Habs as the return may not have been much different than what the Hurricanes got for Skinner. Go Habs Go!