The Toronto Maple Leafs and John Tavares have begun what are likely to be complex contract negotiations. The two sides are aiming to find common ground that balances his desire to remain a Maple Leaf and the organization’s pressing salary cap constraints. It’s no surprise that some interesting extension ideas are surfacing, with a deferred compensation payment option being the latest.
For fans unaware of what a deferred compensation contract is: both sides agree to pay some of the money owed during the life of the contract as the player is playing. The rest is paid out after the contract ends. Interest rates and the time value of money are worked into the equation, and it means players don’t see their money right away. It’s one of the reasons players tend not to choose these types of deals.
Could Tavares Agree to Take Payment Later?
As discussions continue between Leafs management and Tavares’ agent, Pat Brisson, reports suggest a deferred-payment structure could emerge as a viable solution. According to The Athletic’s Chris Johnston, the Leafs are intent on keeping Tavares, but only at a figure that doesn’t jeopardize their ability to compete. Deferring some of his salary until after he retires is one way to keep the AAV down.
He writes:
Given the dynamics at play, it wouldn’t be surprising if the sides landed on a compromise that sees some of the money deferred beyond the life of the next contract. The Leafs used that mechanism to lower the cap hit on Jake McCabe’s recent extension and both sides in this negotiation are believed to be open to exploring a similar type of structure for Tavares.
source – ‘John Tavares has started strong for the Maple Leafs. Will he stay in Toronto?’ – Chris Johnston – The Athletic – 11/28/2024
Tavares, who turned 34 in September, remains a crucial part of the Maple Leafs both on and off the ice. This season, the former captain is on pace for 35 goals and 77 points, proving he’s going to potentially be worth more per season than the Maple Leafs can and will pay. Toronto must contend with some harsh financial truths as they strive to maintain roster flexibility, particularly with young talents like Matthew Knies needing long-term investments.
The Maple Leafs Have a Bottom Line with Tavares’ AAV
One insider report suggests the Maple Leafs appear unwilling to exceed a $5 million average annual value (AAV) for Tavares’ next contract. Comparisons to deals signed by veteran stars like Claude Giroux ($6.5 million AAV) and Patrice Bergeron ($5 million AAV) provide benchmarks, but Toronto seems determined to come in below those figures.
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TSN’s Darren Dreger was a guest on First Up on Friday and weighed in, emphasizing that creativity will be essential to reach a deal. Again, a deferred contract extension makes some sense here. “It can’t be $5 million,” Dreger said, suggesting that any agreement would need to fall below that mark. A deferred structure could allow him to earn more money over the long term while alleviating immediate cap pressures for the Leafs.
For Tavares, who has significant career earnings of more than $111 million, he is likely open to being flexible. For a franchise rolling in money, paying some of his salary after he retires isn’t a huge concern. It allows both sides to keep his relationship going with Toronto, where his leadership and mentorship are valued. It also allows for an extension that is fair and avoids a Steven Stamkos-type situation that occurred in Tampa Bay.
Ultimately, both sides share a mutual interest in continuing the relationship. Tavares remains a consistent producer, a locker-room leader, and a beloved community figure. However, as Dreger put it, “How do you get there? That’s going to be the challenge.”