Anaheim Ducks extension with Frank Vatrano could change how NHL contracts are done for years to come
Today a new seemingly run-of-the-mill contract extension for Frank Vatrano of the Anaheim Ducks might have just changed the way contracts will be structured going forward.
Earlier today the Anaheim Ducks and Frank Vatrano agreed to a three-year contract extension.
The contract was expected to be finalized between the two sides with the Ducks seeing Vatrano as a key piece of their rebuild going forward but the terms of the contract have caught the attention of many around the league.
According to multiple reports, the Ducks are using a strategy involving deferred money to lower Vatrano's salary cap and also make up for the high taxes in California.
With deferred payments, Vatrano will be able to collect a significant portion of his contract after he retires which will allow him to collect the paychecks in a state or province with lower taxes than California.
Vatrano's contract is supposed to carry a salary cap hit aav of 6 million but instead will be just $4.57 million due to almost 9 million dollars in deferred money.
The rest of the money will be paid out over a decade beginning in 2035.
To this point, a contract like this had not been signed in the NHL but had been signed in the MLB with Los Angeles Dodgers star Shohei Ohtani employing a similar strategy.
Now with Vatrano signing this deal, it begins a conversation about the future of NHL contracts especially in higher tax markets.
Will deferred money become a trend for NHL contracts of the future
For years there have been conversations about markets like Florida, Dallas, and Nashville getting insane advantages due to their favorable tax laws in those states.
On the flipside California, most of Canada, New York, and a few other states were considered difficult markets to sign free agents due to the higher-end taxes that athletes would have to pay.
With this contract now signed by Vatrano showing that some of the impact of higher taxes can be circumvented by willing players and organizations it could now become a tool for teams in some of these markets.
Particularly Canadian markets could look to use these deferred payments to become more attractive free-agent markets to players who want to play in Canada but do not want to sacrifice a payday.
As the summer approaches 2025, NHL Free Agency will be the first time we get a true look at how this new tactic could impact the future of the NHL and potentially sports as a whole.
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