A lengthy Elias Lindholm extension would be risky, but contract structure could mitigate the risks

With just under a week before main training camp begins for the Calgary Flames, there’s a lot of chatter about Elias Lindholm. Not only did Lindholm speak to the media prior to the club’s golf tournament, he was one of the few that was more definitive about his desire to be in Calgary long-term.

The premise of a lengthy contract extension for Lindholm makes some fans excited and others nervous. Both reactions are completely rational, as Lindholm is currently a very good hockey player… but nobody can be sure how his game is going to age, and that brings some risks to a potential long-term deal.

With that in mind, let’s delve into some possible ways to mitigate the downside risks of a long-term Lindholm extension.

First and foremost, let’s acknowledge a few basic premises: Lindholm is a 28-year-old, right shot Swedish centre. (He’ll turn 29 on Dec. 2.) Since arriving in Calgary in the summer of 2018, he’s become one of the team’s best and most important players. In 369 regular season games with the Flames, usually playing top six minutes against the other team’s top six, he has 139 goals, 325 points and has won 53.1% of his face-offs. He was runner-up in Selke Trophy voting in 2021-22 and finished 10th in 2022-23 despite much of the team having an off year.

No reasonable observer would argue that he’s not good at hockey. Folks are allowed to disagree about how good he is, but there has to be a basic acknowledgement that since arriving in Calgary, he’s been quite good.

A Lindholm extension would begin in the 2024-25 season and, as somebody born in December 1994, Lindholm would turn 30 in the first year of his new deal. Father Time remains undefeated, and there’s no guarantee how Lindholm’s body and game will age over the course of a potential eight-year deal that brings him past his 37th birthday. There are obvious risks, but within existing contract structures there are ways to mitigate some risks.

On Sportsnet Today with Logan Gordon on Wednesday, The Athletic’s Julian McKenzie mentioned that this is probably Lindholm’s big chance to “get that bag.”

Given that, the main market comparable for Lindholm’s deal is probably Bo Horvat’s contract with the New York Islanders. Horvat’s annual cap hit is $8.5 million over eight years on a deal that begins with a salary cap that’s $83.5 million, so Horvat’s deal covers 10.3% of the Islanders’ cap. Considering that the salary cap is widely expected to go up to around $87.5 million in 2024-25, a deal with the same proportionate cap hit as Horvat’s – factoring in cap inflation – would see Lindholm make $9 million per season.

So what carrots can the Flames dangle to Lindholm to sweeten the pot? Well, Lindholm can only sign an eight-year deal with the Flames at present, which increases the amount of total compensation this deal can give him. The Flames could also load the deal up with no-trade or no-move clauses and swap out regular salary for signing bonuses.

And when you factor in how contracts are allowed to be structured from year-to-year and the addition of bonuses, you can find a way to make a deal worth Lindholm’s while… while allowing the Flames to mitigate some risk on the back end of the deal. Signing bonuses can’t be bought out, only salary can, and depending on the jurisdiction you’re in, bonuses may be handled differently than salary on a taxation basis.

Under the 2020 CBA, compensation within a long-term deal can’t vary by more than 25% of the first season’s value, and the lowest yearly compensation can’t be less than 60% of the highest year’s. Additionally, a player has to be paid, at minimum, the mandated league minimum salary (currently $775,000) but bonuses can be stacked on top of that.

So… let’s think about this hypothetical contract structure. (We don’t have it in the table, but we’ll copy the clauses Horvat got from the Islanders: a full no-trade for the first four seasons and then a 16-team no-trade for the last four seasons.)

So how is this good for Lindholm? Well, it’s $72 million, with 73.6% of the deal being bonuses. Horvat’s deal contained no bonuses at all. And when you look at Lindholm’s teammates, this deal would contain a higher proportion of bonuses than Jonathan Huberdeau (73.2%), Nazem Kadri (22.4%), MacKenzie Weegar (16.0%) or Jacob Markstrom (13.9%). Heck, with this salary structure, Lindholm would get paid more than Huberdeau for two seasons and then the same amount of him for two more seasons.

On the back-side, though, the shift to salary-heavy from bonus-heavy gives the Flames the option to buy Lindholm out if his play falls off a cliff. Buyouts give players two-thirds of their remaining salary over twice as many years as were bought out, with the buyout payments layered onto whatever bonuses were built into their existing deal:

The hypothetical deal isn’t perfect, by any means, and throwing that much money at a player entering his 30s isn’t without its risks. But right now, Lindholm is the Flames’ best centre. He’ll probably be effective for awhile yet.

And there’s probably a deal structure available to the Flames and Lindholm’s camp that can balance the risks for both sides and make everybody fairly comfortable with signing on the dotted line. We’ll see if they can get there.