After signing Kasperi Kapanen and Andreas Johnsson today, Kyle Dubas met with the media to tell us things we already know:
- He hasn’t signed Mitch Marner yet
- He really likes Mitch Marner
- He talks to Mitch Marner’s agent all the time.
He also pointed out that none of the other elite young RFAs are close to signing a deal.
Dubas also talked very pointedly about how the Maple Leafs will absolutely use their ability to pay about half their salary obligations in signing bonuses to entice players who understand the “present value of money”. I’m not sure I’ve ever heard a GM talk about that before.
What this means is that money you’re going to earn later is actually worth less now, it’s present value, or put a way that makes more sense: the signing bonus is valuable because the player gets it sooner and has the opportunity to invest that money and earn a return on it that money he gets apportioned out in a pay cheque twice a month can’t match. This is true of any sum, but when you start getting into millions it multiplies.
Chris Johnson provided this breakdown of the contracts:
Breakdown of Kasperi Kapanen's #leafs extension:— Chris Johnston (@reporterchris) June 28, 2019
2019-20: $3.7M signing bonus/$700,000 salary
2020-21: $1M SB/$1.86M salary
2021-22: $1.54M SB/$800,000 salary
Breakdown of Andreas Johnsson's #leafs extension:— Chris Johnston (@reporterchris) June 28, 2019
2019-20: $4.3M signing bonus/$700,000 salary
2020-21: $1M SB/$2.6M salary
2021-22: $1.75M SB/$750,000 salary
2022-23: $1.75M SB/$750,000 salary
I used a simple investment calculator to give a valuation on Johnsson’s $4.3 million bonus in four years when this contract is up. The result at a low interest rate of 2.5% is $4,751,741. Which is not a massive amount, but you have to add to it the other three bonuses and their increase in value, and it adds up to the equivalent of a higher AAV contract even on his relatively small deal. And the further into the future you go, the more that effect compounds.
But the point of all of this is that this is an advantage the Leafs wealth (and the Scotiabank sponsorship which pays in every July 1) allows them. And Dubas is not apologizing if other teams don’t like it.
As per Elliotte Friedman in 31 Thoughts, Leafs management took some heat at the ECHL Board of Governors meeting from teams that didn’t like the Leafs stacking the Growlers with players on AHL deals. All teams do this, but no one quite matches the scale the Marlies have achieved in the last two seasons in Orlando and now St. John’s. Whoever was there, Laurence Gilman, I assume, gave them the old “baseball minor leagues model” speech we’ve all heard before and told them it makes the league better if teams do this to develop AHL talent, so suck it up, haters. I think that last part might be my paraphrase.
The attitude is the same from Dubas today. Other teams use their advantages in terms of tax rates and cost of living, which Toronto will never have (and the league will never adjust for), and this is Toronto’s response. Suck it up, haters.
The other disadvantage Toronto has right now is a lack of cap space, and when asked about the Leafs in free agency and particularly their actions right now in the so-called discussion period with UFAs, Dubas was candid. More than candid, he really did put out the ‘help wanted’ sign. He was up front that the Leafs are looking to add players like Tyler Ennis last season on minimum contracts (that’s $700,000 this season). They are carefully calling players, and trying not to be insulting about it, but Dubas said, “They know that when we call, it won’t be the most lucrative phone call they’ll get on that day.”
The Leafs are offering a chance to play in the fishbowl of Toronto media with good players, and if you’re a defender, a wide-open path to ice time. If you do well, everyone is going to hear about it. If Tyler Ennis does get a really good deal on July 1 this year, and if he does, it will be with some other team, then that’s the best advertisement for the Maple Leafs Career Regeneration Service. Dubas might just find the UFAs start calling him.
As far as Ron Hainsey goes, the official word there is that he’s likely too expensive for the Leafs. But Dubas plans to call him when he’s had a chance to talk to all the other teams calling for his services on the blueline and make his own pitch. That pitch is going to be less money than anyone else will pay and more ice time. It’s not even a question, and it has nothing to do with Mike Babcock’s alleged love of Hainsey. The competition on the team for roster slots is just that thin.
Tomorrow I’ll have a piece up looking at some possible cheap UFAs, and come Monday or maybe Tuesday, we’ll see who answered this help wanted ad.