Edmonton Oilers Should Use Deferred Payment on Leon Draisaitl's Next Contract – Hockey Writers – Edmonton Oilers

Edmonton Oilers fans continue to hold their breath as they wait for the contract extension of star player Leon Draisaitl. While most expect Draisaitl to re-sign with the Oilers, each day that passes without an announcement is worrying. While Draisaitl could demand north of $14 million per year on the market if he becomes a free agent after this season, the Oilers could look to the Carolina Hurricanes to lower the average annual value (AAV) on Draisaitl's next deal.

Related: Leafs Should Use Deferred Payment on Marner's Next Contract

The Hurricanes recently extended forward Seth Jarvis to an eight-year contract worth $7.42 million per year. However, Jarvis' new contract has a deferred payment plan, meaning that some of his signing bonus money is paid to him the day after the current deal expires on July 1, 2032. Although Draisaitl and Jarvis are not comparable players, the Oilers could do the same to give Draisaitl money. he deserves, while lowering the cap hit.

In Jarvis' new deal, the Hurricanes will waive $15.67 million of his total contract from his signing bonus in the first, second, and seventh years of the contract. As explained below by PuckPedia, almost every contract year has a different amount of money that affects his cap for that particular season.

Jarvis #Sticks 8 Years $7.42M Cap Hit:

1 Year $2M Base & $7.233M Signing Bonus
2 years 6M & 3.41M SB
3 Years 4.25M & 4M SB
4 years 6.57M
5 years 6.57M
6 years 6.57M
Year 7 1M & 5.187M SB
8 Years 1M & 5.57M SB

The amounts above include the present value of all deferred compensation. 15.67M Total…

— PuckPedia (@PuckPedia) August 31, 2024

This type of agreement has not been seen for a long time. While the Phoenix Coyotes were negotiating Shane Doan's contract, recently, MLB star Los Angeles Dodger Shohei Ohtani had $680 million of his contract deferred until his current deal was completed. This gives the Dodgers a great opportunity each season to try to compete with that extra money as Ohtani pulls back $68 million a season and makes $2 million a year while playing.

While Jarvis is a big part of the Hurricanes' future, this contract structure was unexpected. But, it was a smart move by the management. At the end of his eight-year contract, the Hurricanes will be in a completely different league and likely out of contention, giving them a chance to rebuild once he becomes a free agent. At the same time, that $15.67 million is only against the cap for one season, which shouldn't cause any problems if he's in the middle of a rebuild at the time.

The Oilers Should Use the Same Strategy With Draisaitl

If the Oilers want to save money while continuing to contend for the Stanley Cup over the next few seasons, they should take a similar approach. While many people have tried to predict what Draisaitl will ask for in his next contract, it's safe to assume it will be around $13 million per year. With deferred money, the Oilers could drop that to $12 million per season.

The extended contract will help management re-sign players who need new deals next season, including Connor McDavid and Evan Bouchard. It saves some money on the cap hit for Draisaitl, and if all three are open to taking less money to stay in Edmonton, the Oilers will be able to sign free agents or add big names at the trade deadline.

Using the Jarvis extension as a reference could speed up the process for Draisaitl and the Oilers. Now that there's a different way to get the expansion done, it wouldn't be surprising if the two sides accelerate talks heading into training camp, and this is the structure they're after. This unusual extension could benefit the Oilers and the team's future. Furthermore, I wouldn't be surprised if more groups start using this strategy to help themselves.

Whether or not the Oilers decide to explore this route during negotiations with Draisaitl, is worth considering.