Today an NHL rarity occurred, and it involved the Carolina Hurricanes. A few hours into the kick off of NHL free agency, it was announced that the Montreal Canadiens had signed Sebastian Aho to an offer sheet. The headline terms were a five-year deal at $8.454 million per year.

But the headline numbers do not tell the whole story.

The situation is interesting on many levels. Let’s step through at least most of them.


An odd move by the Canadiens

By pegging the salary where it is, the Canadiens would have to give up first, second and third round draft picks. Had they gone a bit higher another first round pick would have been added. In that regard, the salary offered looks like a steal for the Canadiens, but that only matters if the Hurricanes do not match it. There are issues with the payment structure (see below), but I would be utterly shocked to see the Hurricanes not match this.

So that begs the question of what Montreal was up to.

Did they really think that there is a chance that the Hurricanes would decide not to match this fairly modest offer in return for a ‘meh’ set of draft picks?

Or did Montreal perhaps just see an easy chance to stick it to another Eastern Conference team? Montreal did make minor problems for the Hurricanes with the onerous salary structure and all of the guaranteed money that is due next year even if there is a lockout. In addition, by doing this the Habs scheduled Aho to become an unrestricted free agent in five years instead of a maximum eight years.


The basics from the Hurricanes side

At the simplest level, the Hurricanes will undoubtedly match this offer and have Aho under contract for these terms. My wild guess is that the Hurricanes would have preferred 6-8 years and might actually have paid a bit more to get that, and if forced to give in to a five-year deal, I do not see how the Hurricanes could have offered less than $8 million per year. So the Hurricanes lost term that they now cannot get back and maybe will have to pay a tiny bit more. By no means is that something that makes matching anything more than a no-brainer.


The upshot is onerous contract structure

If the Hurricanes match the offer sheet as expected, the upshot is the onerous bonus-laden, front-loaded structure of the contract. The Hurricanes now have to pay 52 percent of the total amount basically in the first year plus a day. Further, the $9.9 million signing bonus for 2020-21 means that the Hurricanes will actually have to pay Aho even more than the $8.454 average cost even if there is a lockout. Those are both tough pills to swallow financially which is the cost that the Hurricanes will pay for not getting this deal completed smoothly and ideally before July 1.


On the assertion that Sebastian Aho actually wants to leave

Since Sebastian Aho technically signed a contract to play for the Canadiens, there are rumblings that Aho actually wants out of North Carolina. But in my opinion an understanding of the technicalities of the series of events and the NHL rules for contracts, buyouts and such makes it pretty obvious that the goal here was to get a favorable contract but remain with the Hurricanes.

As noted above, the salary of the offer sheet was probably barely higher than what the Hurricanes were negotiating at, and with just one first-round pick and two others, the return was far from compelling. When you net it out, the offer did not really make it a tough financial decision for the Hurricanes nor is the return enticing.

Maybe more significantly, the structure of the contract makes it very unlikely the Hurricanes would trade him. Offer sheet rules state that a player cannot be traded within one year. Aho’s contract pays $12 million in the first year and then a $9.9 million bonus right at the beginning of the second year. In total, by the one-year anniversary of the contract, the Hurricanes will have paid $22 million out of a total of $42.2 million due over five years. At the point where the team could start accepting trade offers, Aho would have four years remaining on the contract with an average salary of just over $5 million per year. (The cap hit is flat; this is talking about actual dollars.) At that point looking forward, Aho will be a massive bargain playing about something in the neighborhood of half of his fair value. That is not the type of contract that the Hurricanes are going to trade out of.

If Aho really wanted to leave, signing the type of offer sheet that he did was arguably the worst choice he could make for the reasons noted above. As a restricted free agent, his leverage is somewhat limited, but he could have threatened to hold out or demanded a massive salary that put writing on the wall for the Hurricanes.

In my opinion, what unfolded today was all about Aho’s agent choosing an interesting path to get the five-year term that Aho wanted and doing so at something close to a maximum price. The favorable structure that sees Aho still get paid $10 million even if the entire 2020-21 season is lost to a lockout is icing on the cake.


The process

Having another team step in to dictate terms is not an ideal way to reach agreement on a contract for a franchise cornerstone. What Aho’s agent did to drive favorable terms was smart. And in the business world, playing different bidders against each other to maximum financials is common fare. But the move is not the norm in NHL negotiations.

Though today’s events might actually have expedited the process, one has to wonder if the team and agent could have accomplished similar without the outside messiness. I do not know what confidentiality rules exist when a team presents a contract offer, but it seems like taking Montreal’s offer to the Hurricanes or just credibly saying that you had an offer should have been enough to set the basics of the deal and enable Aho to turn down the offer sheet and negotiate pretty similar terms.


What say you Canes fans?


1) Were you surprised (I was) that an offer sheet actually came to fruition?


2) Does anyone think there is even the slightest chance that the Hurricanes will not match?


3) Other thoughts on today’s festivities around Sebastian Aho?


Go Canes!




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