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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NHL’s Top-20 Current Worst Contracts

Market. Competition. Desperation. Self-preservation. All factors dictating, justifying and/or describing NHL General Managers’ actions during the summer months, but mostly in the early days of July when free agents hit the market. All of which contributing, in one way or another, in bidding wars bumping up the so-called market value of a player, or players within the same category, numbers used at a later date by other players’ agents in justifying the new bar for their clients in future negotiations. The best General Managers are those who can resist succumbing to the temptation of getting into betting wars, by simply sticking to their plans going in… but “simply” just isn’t that simple as it’s often easier said than done.

The irony of this whole phenomena is that the NHL imposed a hard salary cap in an attempt to stop that process, in a way to protect GMs from… themselves. But as we’ve witnessed over and over again, it hasn’t worked. All it has done is kill GM’s abilities to “fix their mistakes” by trading their bad contracts, making it less exciting for fans as in-season trades are few and far between.

“If you look at history in the NHL, the biggest mistakes are made in early July. Worst contracts, guys who underperform. The biggest mistakes are July first. You have to be careful.” ~ Marc Bergevin

As the July 1st Free Agents’ Frenzy is once again upon us, let’s take a look at the NHL’s current worst contracts. Taken into consideration are factors such as cap hit, production, games played, no trades protection, protection against buyouts (signing bonus), age and number of years remaining to the contract. In order to understand the buyout protection, signing bonuses don’t count in the case of a buyout, only the player’s salary. For example, for every year of his contract, Andrew Ladd’s base salary is $1M. The rest is all signing bonus. So the Islanders would still be left with $4.833M of his $5.5M counting against their cap.

20. Antti Raanta (G) 30 – 12 GP – 2.88 GAA – 0.906 SV%

19. Scott Darling (G) 30 – 8 GP – 3.33 GAA – 0.884 SV%

18. Ryan Johansen (F) 26 – 80 GP – 14G – 64 PTS

17. Brandon Dubinsky (F) 33 – 61 GP – 6 G – 14 PTS

16. Cory Schneider (G) 33 – 26 GP – 3.06 GAA – 0.903 SV%

15. James Neal (F) 31 – 63 GP – 7 G – 19 PTS

14. Justin Abdelkader (F) 32 – 71 GP – 6 G – 19 PTS

13. Erik Johnson (D) 31 – 80 GP – 7 G – 25 PTS

12. Ilya Kovalchuk (F) 36 – 64 GP – 16 G – 34 PTS

11. Bobby Ryan (F) 32 – 78 GP – 15 G – 42 PTS

Keep in mind that with the upcoming expansion draft, only those with No-Trade Clauses (NTC) can be left unprotected for Seattle. A player with a No-Movement Clause (NMC) MUST be protected by their team. This has a huge impact on how bad the contract is considered.

10. David Backes (F) 35 – 70 GP – 7 G – 20 PTS

9. Niklas Hjalmarsson (D) 82 GP – 0 G – 10 PTS

8. Karl Alzner (D) 30 – 9 GP – 0G – 1 PT

7. Corey Perry (F) 34 – 31 GP – 6 G – 19 PTS

6. Ryan Kesler (F) 34 – 60 GP – 5G – 8 PTS

And now down to the nitty-gritty, the five worst contracts in the NHL.

5. Nikita Zaitsev (D) 27 – 81 GP – 3 G – 14 PTS

4. Andrew Ladd (F) 33 – 26 GP – 3 G – 11 PTS

3. Kyle Okposo (F) 31 – 78 GP – 14 G – 29 PTS

2. Loui Eriksson (F) 33 – 81 GP – 11 G – 29 PTS

1. Milan Lucic (F) 31 – 79 GP – 6 G – 20 PTS

With the news that Erik Karlsson just signed a contract extension with the San Jose Sharks giving him a $11.5 million cap hit, we might have to wait a few years but that contract might eventually find its place amongst the NHL’s worst contracts… particularly if he can’t stay healthy. Either way, desperate GMs are likely to fall, as they do every year, to the peer pressure of getting a much desired free agent but as you can see, the notion that teams “get them for free” is as far as it gets from accurate. Here’s hoping that Marc Bergevin doesn’t pull another Alzner. Could Matt Duchene be a good fit? We’ll find out soon enough. Go Habs Go!