FlamesNation Top 25 of 2020: #11 — The good and bad of Jacob Markstrom’s contract structure

The good and bad of Jacob Markstrom’s contract structure

Breakdown

Via PuckPedia, the yearly breakdown of salary and signing bonuses.

Season	Salary	Bonuses
2020-21	$4,000,000	$0
2021-22	$4,000,000	$0
2022-23	$8,000,000	$0
2023-24	$8,000,000	$0
2024-25	$3,500,000	$2,500,000
2025-26	$3,500,000	$2,500,000

TSN’s Frank Seravalli referred to this on Twitter as “the hump,” as the payouts across the deal resembles a camel with low salaries early and low salaries late and the prime earning done in the middle of the deal.

Escrow

Season	Salary	Bonuses	Escrow %	Payout
2020-21	$4,000,000	$0	20% (+10% deferral)	$2,800,000
2021-22	$4,000,000	$0	18%	$3,280,000
2022-23	$8,000,000	$0	10%	$7,200,000
2023-24	$8,000,000	$0	6%	$7,520,000
2024-25	$3,500,000	$2,500,000	6%	$5,790,000
2025-26	$3,500,000	$2,500,000	6%	$5,790,000

(Escrow is on salary, but the 10% deferral is on all money in the system including bonuses. The deferral gets paid back throughout the remainder of his contract, but it’s unclear how much and when.)

Buyouts

Season	Original Cap Hit	New Cap Hit	Cap Savings
2023-24	$6,000,000	-$333,333	$6,333,333 ($8m minus $1.667m)
2024-25	$6,000,000	$4,166,667	$1,666,667 ($3.5m minus $1.667m)
2025-26	$6,000,000	$4,166,667	$1,666,667 ($3.5m minus $1.667m)
2026-27	$0	$1,666,667	-$1,666,667 ($0 minus $1.667m)
2027-28	$0	$1,666,667	-$1,666,667 ($0 minus $1.667m)
2028-29	$0	$1,666,667	-$1,666,667 ($0 minus $1.667m)

Okay, let me explain the oddity of the negative cap hit in 2023-24. Each season’s buyout cap hit is calculated as the difference between the original salary paid out that said and the salary paid out in the buyout. Because 2023-24 has such a high amount of salary ($8 million), the savings exceeds the cap hit from that year in a weird CBA loophole. But that’s off-set by the fairly high cap hit in 2024-25 and 2025-26, which probably act as a deterrent for buying Markstrom out that early.