We’re now a day out from Ryan Nugent-Hopkins putting pen to paper on an eight-year, $41-million contract with the Edmonton Oilers.
And today, we’re going to take a look at how his contract breaks down and what it means for the Oilers, and Nugent-Hopkins.
His contract structure was broken yesterday by TSN’s Pierre LeBrun and is a deal largely paid out in salary.
RNH contract strucutre:
21-22: $5M salary
22-23: $5.25M salary
23-24: $6.25M salary
24-25: $6.25M salary
25-26: $4M salary plus $2M sb
26-27: $2.25M salary plus $2.5M sb
27-28: $2.5M salary plus $1.25M sb
28-29: $3.75M salary
— Pierre LeBrun (@PierreVLeBrun) June 29, 2021
The contract is fairly front-loaded with $22.75-million paid out in salary over the first four years. In 2025-26, he sees his first signing bonus in the form of $2-million, followed up more $3.75-million over the next two years.
According to PuckPedia, there are some interesting things to note:
- 2026-27 and 2027-28 both have the potential to be lockout years for the NHL.
- The contract has some security against a buyout for Nugent-Hopkins. The signing bonus’ in years five through seven spike his buyout cap hit.
- Most of the money he earns is in years three through five which will have the lowest escrow.
Taking a look at a buyout, it would not be very palatable in the final two or three years of the deal. If the Oilers want to buyout the final two years of his deal, Edmonton will owe him money for four years. In years one and two, Edmonton would take a $3.6-million and a $2.4-million, before subsequent $1-million cap hits in the following two years.
If the Oilers want to buy out the final three years, they would owe him money for six years. In years one, two and three, he would have a cap hit of $3.8-million, $3.5-million, and $2.3-million, before three years of $944K.
The Oilers need to bank on two things happening:
- Nugent-Hopkins’ game not falling off a cliff. This is concern number one. Even in the later years of the deal, he needs to find ways to contribute to the Oilers lineup of the future. That’s because of how tough a buyout would be.
- A rising cap. In pre-pandemic times, the cap was supposed to climb to as high as $88-million from now. With massive TV deals now signed in the U.S., let’s hope the league is able to raise the cap in the next few years. We know to expect the flat cap for a few more seasons, but a rising cap in the later years of Nugent-Hopkins’ deal could prove very valuable to the Oilers.
All in all, his contract is virtually buyout proof. It’s more likely than not that years from now it would be more valuable to just hold onto the remaining years of his deal, or trade him, than to try and force a buyout that would cost the team much longer than it needs to.