Gaudreau and Monahan not signed yet? Don’t panic, it’s complicated

On July 1, two of the best draft picks in the history of the Calgary Flames became restricted free agents. Calgary’s 2011 fourth round pick Johnny Gaudreau and 2013 first round pick Sean Monahan, together the two highest-scoring Flames last season, have been without contracts since Canada Day. Given that the dynamic duo is going to be eating up a large chunk of the Flames’ salary cap and that they’re likely to get two of the richest deals in the history of the franchise, the lack of signing announcements has caused some hand-wringing and brow-furrowing among the fanbase.

Why are these deals taking so long? Shouldn’t they been done by now?

Relax. It’s complicated.

The first problem that the Flames have to solve with each camp is the length of the deal. The maximum length for each is eight years, which would take Gaudreau until he’s 30 and until Monahan’s 29. The main key in length discussion is how many years of unrestricted free agency each side is comfortable with buying, as you’d expect the average annual value of the contract to move upwards for each season of free agency a player forgoes.

You’d expect the conversation to go something like this:

  • Gaudreau Camp: How many years are you thinking?
  • Treliving: How about eight?
  • Gaudreau Camp: How many years are you getting Monahan for?
  • Treliving: Eight, we think.
  • Gaudreau Camp: How about seven, then?
    (And visa versa.)

Each player’s representatives have an incentive to have their deal expire juuuust a bit before the other one does, as that way they would have the opportunity to get their big “Please don’t go to free agency” raise before the other guy does (and effectively get the maximum piece of the Flames salary cap pie rather than negotiate against each other). That’s probably something that plays into it.

Bear in mind that Don Meehan, Monahan’s agent, has a reputation as a shark. He also reps Jarome Iginla and Steven Stamkos. (Gaudreau is represented by Lewis Gross, who previously repped Martin St. Louis and currently extols the virtues of Torey Krug and Brandon Saad.)

Let’s just say, for argument’s sake, that the Flames and both sides have agreed on general terms. They’ve figured out how many years and they’ve agreed in principle on similar contracts from comparable players. For argument’s sake, let’s say that Monahan wants eight years at $6.5 million and Gaudreau wants eight years at $7.5 million. Once those things have been nailed down, two things need to be figured out: year-to-year salary distribution (e.g., how much money will be paid out in a given league year) and how much is paid in salary and how much in bonuses.

The current CBA can potentially expire at the end of the 2021-22 season and agents are understandably wary about salaries being rolled back. So, we’ve seen the rise of something known as “Lockout Proofing.” Rather than paying out the $7.5 million equivalent to Gaudreau every season in salary (for example), the sides could negotiate a combination of salary and signing bonuses. Salary can be rolled back, but bonuses can’t. So the amount paid out each season and the composition of what is paid out is a huge factor in current negotiations league-wide.

And once you’ve settled on a contract length and how much is being paid out (and how much is salary or bonuses), then each side has to haggle over no-trade and/or no-movement clauses. (They can kick in once the players are into their UFA seasons).

In short? On their own, the Monahan and Gaudreau negotiations are each the most important contract in the history of the Flames franchise. These are hugely valuable assets that the club is trying to sign long-term, and the negotiations are not only going on during a hugely tumultuous time in the NHL’s history – on the cusp of expansion and as the end of the current CBA looms – but these important negotiations are concurrent to each other.

Brad Treliving is playing two simultaneous hands of high-stakes poker. He’s going to be handing out the two most expensive deals in the history of the franchise. And he’s negotiating with two camps that have an incentive to try to wrangle and wriggle their way to more favourable deals than the other is getting.

Deals will get done. Gaudreau falls into a weird black hole in the CBA where he hasn’t played enough seasons to receive offer sheets, and the Flames would definitely match any offer sheet given to Sean Monahan. If the contracts were simple, they’d be done by now. But they’re not. They’re arguably the most complex negotiations in franchise history.

Step back from the ledge. Take a deep breath. Relax. The situation is complicated.

  • jupiter

    Add to this the possibility of there agents looking at the tax break of having your primary residency in another country, like the owner.

    AAhhh the life of millionaires. It must be tough.

    • wot96

      @ Jupiter – Edwards didn’t go to London for a tax break. He went to get separation from a bad situation in his personal life and better access to capital markets for his activities. That’s been reported elsewhere.

      Even assuming you don’t believe that, I don’t think there is much of a tax break in the UK compared to Alberta. Even if there was, that advantage, or most of it would be consumed by the outrageous cost of living in London relative to Calgary.

      Regarding the article, the other thing the Flames need to consider is this: If they had to choose between their two stars and the one coming after, Bennett, how does that play out particularly in the context of a lot of cash being paid on defence. Bennett isn’t going to just take whatever is left. He will demand as much as he can, less any loyalty discount he may choose to concede.

      I don’t think the difficulty in relation to these negotiations stops at term and $ for these two players. There is a longer view that must also be considered.

      • freethe flames

        The Bennett contract will likely be less stressful as there will more money available next year. With Wideman, Smid, Engs, Bollig @13m gone signing him and one of the two goalies will be affordable. The replacement players are all currently in the system and under contract. The following year another @5.5m comes of the cap when Stajan and Bouma’s contracts expire.

        The one big issue with Johnny and Monny deasl being delayed is that it prevents BT from knowing what he can pay to upgrade the team now. If he could make 1 trade to clear up cap space(Wideman) then he could still address some other issues.

        • Baalzamon

          There’s also the fact that Bennett won’t have the track record to demand six million+ per. So far he has one 11 game playoff with three points, and one near-40 point season. Monahan and Gaudreau both have two 60+ point seasons. Unless Bennett gets like 70 points next season his next contract is going to be pretty painless.

          • freethe flames

            The only issue with this reasoning(I tend to agree with you) is that Bennett’s contract could be a bridge contract. Would it better to pay him a little more for a long term deal or do a bridge where the next contract goes up significantly.(maybe it doesn’t)

          • piscera.infada

            Bridge contracts do make sense under certain circumstances, of course. I mean, much of what will dictate Bennett’s next contract will centre around what he does this upcoming season. If he truly takes a leap forward, then it’s going to be moot, and he’ll be paid accordingly. If he doesn’t, then perhaps bridging him is the best course of action.

            The reason Monahan and Gaudreau’s contract situations are tough, is because you’re paying them based on past performance as well as trying to extrapolate that to future performance.

    • The GREAT Walter White

      Poor owner; he moves to UK to avoid paying Alberta/Canadian taxes…..and then 3 months later BREXIT happens….

      We better build him an arena before he threatens a FLEXIT!

      WW

  • Thunder1

    Monahan just told Gino Reda that he and Johnny are getting together tonight and looking for something to get done soon. He was clear that both want to remain Flames together for as long as possible.

    Sounds promising!

  • StarIV

    I believe that both Gaudreau and Monahan have 4 years of RFA status remaining (please correct me if I interpreted the CBA incorrectly). Obviously, 4 or 5 year deals would not be good for Calgary. I think that the deals need to be a minimum of 6 years in length, but preferably 7 or 8 years.

    From the player’s perspective, I would think they would want a 4-6 year deal. Both players would hit the open market in their prime and could land a contracts similar to Jamie Benn’s 9.5 AAV (Gaudreau) or Ryan O’Reilly’s 7.5 AAV (Monahan).

    Obviously, like Ryan mentioned, many moving parts. Guess it’s just time to play the waiting game.

  • Druds

    I was worried about this…

    brad…so 7.5 million for 8 years? right Johnny?

    Johnny rocket… do I have to wear that *&*&*(* cowboy hat?

    brad…uhh sorry yes…Mr King demands it of all Flame employees.

    Johnny ….okay…then 9.5 million for 8 years…

    brad….ummmmmmmmmm

    • The Sultan

      At least it wasn’t as bad as this conversation:

      Chiarelli: How would you like a number one overall pick, one of the top left wingers in the league?

      Shero: Sure. We’ll give you Larsson. But no picks. Or anything else.

      Chia: LARSSON?! DEAL!!!

      Bennett: hahahahaha how does it feel? That’s not Oliver Ekman-Larsson.

      Chia: Yeah, well, that’s not Mikael Granlund.

      Bennett: We’re idiots.

      Kekäläinen: Me too!

      Treliving: *signs Gaudreau and Monahan to very long, very nice deals*

  • Baalzamon

    Uh… hang on a sec. Can anyone explain to me why the Sens would trade Zibanejad for Brassard?

    What’s with all these GMs trying to compete with Jim Benning for the title of “absolute worst ever”?

    • MarbledBlueCheese

      I have a theory about this–the GM is under orders from an owner who thinks they should be not only in the playoffs, but competing for a cup legitimately.

      As such, the GM is cashing chips for “established” players. The idea is that Brassard has scored more than Zibanejad and the Sens are feeling a need for veteran presence to put them into that playoff position. This explains the Phaneuf move as well.

      Analytically it appears moronic due to the fact that Brassard is quite a lot older than Zibanejad, and will decline sooner. To top it off, the Sens had to part with a second round pick for some reason.

      Both moves will probably help them next year but be really regrettable within 2-3 years. Canadian teams just can’t stop shooting themselves in the foot, it would seem.

  • FoE

    Sadly, Yak for Wides is a flames fan fantasy. Yak is worth more off the Flames roster than Wides is as a powerplay specialist. Hope it happens but even Chia Pete isn’t that stupid.

    • DoubleDIon

      I’d be even happier if the return was a 7th rounder. The key here is cap space, not return. Yakupov isn’t an NHL player, more of a liability we’d take in return for them taking our bigger cap hit. If Eberle or Yakupov could be traded for assets without retention they already would have been.

      • supra steve

        Well, I’d rather take the former first overall draft pick with a $2.5mil cap hit for one season who will then be a RFA. Not sure how many would rather have a 7th round pick, but I’m thinking you are in the minority.

        I also doubt that EDM would take that risk, moving a former highly touted player to their provincial rival…just in case he catches fire in a new environment.

        • DoubleDIon

          Sure, lots of people would disagree with me and it’s certainly debatable. I just think at this point his negative play outweighs his potential. At some point potential needs to be translated into actual play. For me, once you’re entering your 5th year in the league you kind of are what you are. He doesn’t score, win battles or play well defensively. I don’t really think he’s even an NHL caliber player. Others still see the shot and think eventually he’ll hit a corner with it.

      • FoE

        It’s not the return, I just can’t imagine Chiarelli being kind enough to take a player he let walk for $5M once before just to help a division rival out of cap crunch.
        I say that but hey Brad got a roster player, a prospect and a 2nd for Kris Russel so I’ll just shut up.

  • PrairieStew

    Here’s probably what is holding up the negotiations. Agents for the players are telling the team what the UFA years are worth. In Johnny’s case he’s probably asking for $11 million per for years 6,7, and 8.( Kane is $10.5 now – add 5 years of 2% inflation and you are pushing $12) For Monahan $9.5. The players have little leverage now, but will in a year when they have arbitration rights. Without that leverage they are only “worth” $2m each right now, but their value jumps from next year onwards.

    Since you cant have a contract that has more than doubling of the salary from the lowest year to the highest, this brings the annual salaries in to that $5m to $8m range. It’s those UFA years that have inflated the value on the comparables like McKinnon and Tarasenko.

    My question is do they have to buy up the UFA years? I don’t think that they can afford to have both of them at those costs, ( look at what Chicago has needed to do ). Bennett continues to develop as well and will need to be signed, Tkachuk, Kylington etc. Sign them both to 5 year deals at more affordable rates. Sell it to Gaudreau’s camp that instead of $56 over the next 8 years and being a UFA at 30, make $25 over 5 and be a UFA at 27 when your next contract could be worth $85 to 90 million.

    Do we really want to be committed to big dollars after guys turn 27 ? Jarome’s best year was when he was 24. He led them to the final at 26. 4- 5 years from now we will probably be looking at Brodie, Hamilton, Kylington, Monahan, Bennett, Gaudreau, Tkachuk and if they develop like we think they can, there’s no way to afford all of them. The likelihood however is that we will want to walk away from one or two of them and signing them to shorter terms gives the flexibility to do that.

  • Howie Meeker

    My thoughts are Wideman has a lot to play for this coming season and will want to increase his value to the max….the payoff will be more then Russell come trade dead line.