Seth Jarvis’ Contract with Hurricanes May Set New NHL Precedent

Jarvis’ contract will see him on the Hurricanes’ books with a cap hit of approximately $7.5 million per year, rather than the standard $7.9 million, due to a deferred signing bonus payment scheduled for July 1, 2032—one day after the contract officially expires. This strategic deferment allows the Hurricanes to spread the cap hit over the actual payment period, rather than the entire duration of the contract, resulting in a savings of $400,000 per season.

The risk for the Hurricanes is in paying a player after he retires. The downside for the player is not getting his money until much later in his deal. Both the team and the player seem to be comfortable with that arrangement.

Hurricanes Have Done a Deferred Payment Before

This isn’t the first time the Hurricanes have explored deferred payments. Earlier this summer, they signed defenseman Jaccob Slavin to an eight-year deal that included a similar deferred structure. However, Slavin’s deferral was minimal, causing only a slight reduction in his cap hit from the reported $6.461 million to $6.396 million per year. That deal likely paved the way for the more impactful structure of Jarvis’ deal.

The potential implications of Jarvis’ contract are significant. By utilizing deferred payments, teams can create more flexibility under the salary cap. If the Hurricanes can find a way to use that $400K savings to spend on another player at the deadline, that’s money they didn’t otherwise have on their salary cap. Frank Seravalli of Daily Faceoff questions whether other teams might adopt this strategy, but on a much larger scale.

Could the Oilers Try Deferred Deals With Draisaitl and McDavid?

As contract negotiations continue around the league, such as Leon Draisaitl’s ongoing talks with the Edmonton Oilers, Jarvis’ deal could serve as a model for other teams looking to manage their salary cap more effectively while keeping star players.

If the Oilers and Draisaitl both agreed to a deferred deal, the two sides could effectively push millions on a new $112 million contract over 20 or 30 years after that deal expires. It could cost the team $800K to $1 million every year that the Oilers have to pay Draisaitl after he retires, but that money wouldn’t count against the salary cap and could get Draisaitl’s cap hit down to between $10 million per season instead of $14 million.

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