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Blow away the smoke, and Mitch Marner’s choice is simple

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This contract mess isn’t nearly as messy as we’ve been thinking.

2015 NHL Draft - Portraits Photo by Jeff Vinnick/NHLI via Getty Images

Sometime between now and the start of the regular season on October 2, Mitch Marner has a decision to make. It’s a simple one, really, for all the discussion around his contract has made it seem complex and fraught with tension and high emotion. And higher numbers.

When something looks too complicated, the best course of action is to break it down and determine what the facts are.

Late-Signing RFAs

We’ll have to dig into how LTIR and the salary cap affects the Leafs as training camp gets going and cuts are imminent, but for now, we can look back to last year and the procedure for how you calculate a late-signing RFA’s salary and cap hit. We can use William Nylander as an example.

Cap Friendly explains the rules and provides the formula that is in the CBA:

The cap hit of the years after the first year of the contract is calculated first: Cap hit after the first year = (First year salary × season days remaining / total season days + contract value remaining) / contract years

The first years cap hit is then calculated:First years cap hit = cap hit after the first year × total season days / season days remaining

The first thing to understand here is that this calculation is done on salary. So the salary structure is important in determining cap hit in this one instance. Normally, we ignore salary when discussing just the cap implications of a contract. This means negotiations around the salary structure take on increased importance the closer we get to the ultimate December 1 deadline.

Nylander’s salary was negotiated to be:

  1. $12 million
  2. $9 million
  3. $6 million
  4. $6 million
  5. $6 million
  6. $6 million

The calculation from above on those numbers produced a cap hit for years two - six of $6,962,366 and $10,277,778 in year one.

In practice we use a lot of shortcuts for our mental model of how the salary cap actually works. We add up every player on the roster, pretend they’re on the team all season long and that’s the cap hit. But what actually happens is that the salary cap is calculated daily, and every player who only appears on the roster for part of the year has their cap hit effectively prorated to the number of days they play.

Every year at the trade deadline, we talk about adding players by their prorated cap hits. So Jake Muzzin last year cost the Leafs less than half of his $4 million salary (does anyone else suddenly find that to be a comically small number?).

That’s confusing enough to keep in your head, and the work around to this is to look at CapFriendly’s “Projected Cap Space” number as the season roles on and it will tell you what cap hits can be added.

When an RFA signs late, that inflated year-one cap hit is, in effect, prorated right back down again, since he’s only on the roster for a limited number of days. If you go back to last year, and look up William Nylander’s actual accumulated cap hit it’s $6,932,366.

LTIR Changes Everything

For the Leafs this year, things are different, and a quick jog through the numbers is a necessary evil.

First: The Leafs are over the cap without Mitch Marner on the roster by approximately $3 million. That’s approximate because it depends on which 23 healthy players they choose to begin the season with. If we had a magic wand to make Zach Hyman and Travis Dermott healthy now, the Leafs would still not be under the cap.

Second: We’re going to assume for this calculation that Mitch Marner signs after the start of the season, but before Zach Hyman is back off of LTIR, where it seems likely he will start the season.

Since the Leafs will be in LTIR space if Marner were to sign late, he would be considered a player that is added to the roster using the relief from long-term injury that the entire process of LTIR is designed to allow.

Let’s assume that Dermott is back at that time and one of the 22 men. CapFriendly’s armchair GM gives me $11.1 million in LTIR pool in that scenario with a plausible roster.

Now let’s have Hyman become healthy and get added back. I get $9.6 million in LTIR pool now available with 22 men on the roster and Marner unsigned.

When a player’s cap hit is paid for with the LTIR pool, it comes out dollar for dollar. There is no prorating involved.

To sign Marner late, the entire amount of his cap hit is drained out of that pool. The inflated year-one amount is not prorated down. To make that available pool look more pleasant, you can run the team with 22 or 21 men in total. This comes with some risks, but it can be done.

Therefore, the realistic maximum cap hit that can be added without some other major change to the roster is $10 million. This isn’t news, we’ve had these numbers for a long time.

Executive Summary

RFAs who sign late have their year-one AAV increased.

LTIR is used dollar for dollar on the AAV of such contracts.

The maximum LTIR pool likely to be available after October 2 on the Leafs is $10 million.

The Choice

Forget anything you may have heard over the last few days about deals that might have been offered in the summer before the current Leafs roster was set. None of that matters. That’s the smoke. There is little to no chance now for any kind of long- or even medium-term deal because there isn’t space for a high enough AAV.

This is the reality: Marner wants the Auston Matthews contract, and he can’t have it. Not “shouldn’t have it”, not “isn’t worth it” or any other consideration. He can’t have it.

The Leafs have LTIR space for a 9-10 million AAV in year one. Which means the choice for Marner is to sign a deal that’s 3 times 9.75 before October 2 or he sits out. It is that stark. There isn’t plausible wiggle room to have that year one amount pumped up.

The only thing left to discuss is exactly that issue we talked about yesterday: the desire to have year three be so high it guarantees a huge qualifying offer and therefore a huge raise in the next contract. One example is this:

  1. $7.5 million
  2. $9.75 million
  3. $12 Million

That provides an AAV that fits the space the Leafs have — just — and it sets up the next contract to be as large as Marner seems to want it. It’s also, as we talked about yesterday, so large the Leafs would be thinking about trading Marner before they ever agreed to give him that second contract raise. Unless he’d suddenly turned into the best winger in NHL history, that is.

Marner gains nothing by waiting beyond the start of the season (although it would be smart to delay past the 15th, to see if there is a new agreement to extend the current CBA). He has to decide if he can accept whatever version of that three-year deal the Leafs can stomach, and if not, he’s run out the clock and no deal is possible that isn’t actually less than that.

Will Marner agree to any version of that sort of a bridge? That’s his only question to answer.

For the Leafs, they’ve explored longer term deals at AAVs that are overpayments. But now, with the way they’ve structured their roster, they’ve tightened the opening they’ve left for Marner to a point where those deals would require some kind of roster-damaging move.

The team’s choice is simple as well. If Marner says no to some logical three-year compromise deal (without a huge final year salary), then they either let him sit out or take a crowbar to the team in order to fit his contract in. Any team that picks up the crowbar in the short term, is not keeping that player in the long term.

So in effect, the choice is this: Does Marner want to play for the Leafs or not?

And I’d be remiss if I didn’t say that Bob McKenzie said on the Bobcast way back when hockey was still being played that this was the real choice Marner had to make.

Do you know exactly whom you’re supposed to be, Mitch?