Timo Meier — Risk and Reward
I mentioned this a bit on Twitter (and typoed my way through it), but while any acquisition of San Jose Sharks’ forward Timo Meier is going to have some risk, the main talking point — Meier’s contract situation past this season- isn’t as big as some would lead to believe, at least for the Carolina Hurricanes in their pursuit of the winger.
Meier signed a four year deal with the Sharks coming off his ELC after a 30 goal, 66 point season that saw him chip in an additional 15 points in 20 playoff games as the Sharks would make it to the Conference Finals, only to fall to the late Laura Branigan’s favorite team, the St. Lous Blues. The $24 million contract carried a $6 million yearly cap hit, but was structured in such a way so that the final year of the deal actually paid the player $10 million. This is significant because Meier would still be a restricted free agent at the end of this contract, but in order for a team to keep a player a restricted free agent (versus an unrestricted free agent, where the team would have no rights to the player), the team must make a qualifying offer of at least a one year deal worth the actual base salary (no bonuses) of the last year of his contract. So, while Meier’s cap hit for each season of this deal was $6 million, in order to keep the player a restricted free agent, his team would need to offer him at least a one year contract worth $10 million — a daunting figure in an era where the salary cap isn’t growing as quickly as anticipated when the deal was first signed, and some looking at Meier see him as a “rental” — available for this season, but unwilling to pay the $10 million next season to keep him, letting him walk as an unrestricted free agent.
That said, the Canes don’t face the restrictions that other teams have going into next season. Placing Max Pacioretty’s $7 million contract on long term injured reserve insures cap space for Meier this season, and several expiring contracts this coming offseason give the Canes more than enough wiggle room for next season. Pacioretty, Jake Gardiner, and Ondrej Kase’s contracts — a combined $12.55 million- all come off the books this coming offseason, as well as negotiations with Jordan Staal that will see his next Canes contract, assuming the Canes re-sign him, come in at an AAV a bit lower than his previous $6 million. A $10 million, one-year deal shouldn’t scare off Carolina, and if triggered would allow the team the offseason (and really the 2023–24 season if needed) to negotiate a long term deal.
What isn’t being mentioned either is the unlikelihood that Meier would sign his qualifying offer. Sure, you and I see a $10 million salary over one year and would jump on that in a second. But what has more value — $10 million or $68 million? Sure, Meier could “bet on himself”, take the one-year deal, then walk into unrestricted free agency in hopes of a larger salary cap on the horizon and some team offering him $10 million a season. But there are a lot of “ifs” in that scenario, and it doesn’t always work out like you plan.
Just ask Taylor Hall.
Hall, a former MVP, was making $6 million a year in a contract he had previously signed in Edmonton after his ELC expired. Rumored to be seeking $10 million a season, Hall had followed up his MVP season with an injury-shortened season the following year, and the relationship between him and his team at the time, the New Jersey Devils, had soured so that an extension wasn’t likely. Hall was traded to Arizona where he played well, but not MVP-caliber, averaging less than a point a game (Hall had 93 points in 76 games in his MVP season), and Arizona also balked at his asking price, allowing him to enter unrestricted free agency. Unfortunately for Hall, his free agency took place during the pandemic, where team financials were more uncertain than ever. Hall eventually signed a one-year deal with Buffalo for $8 million where he slogged through 37 games, only managing to score two (2) goals during his time with the Sabres, before being dealt again, this time to Boston. Hall played better for the Bruins, but would never reach the numbers he put up during his MVP season with Jersey, and eventually signed an extension with Boston making $6 million a season — the same yearly amount he was making on the contract he signed in 2012.
Did Taylor Hall leave money on the table in 2019–20? While offers and negotiations were never made public, one can safely assume Hall could have signed a 7 or 8 year deal worth at least $8 million a year with New Jersey or Arizona. Hall couldn’t have predicted the pandemic, but that’s the problem with gambling — unpredictable things happen.
Also keep in mind that a Meier extension would likely be an eight-year deal, which is only allowed for a re-signing team by terms of the CBA. If Meier were to hit unrestricted free agency, the maximum a team could offer him would be a seven-year deal, meaning that even if Meier were to get $10 million a year, that’s a $70 million contract guaranteed*, where an 8-year, $8.5mil AAV extension would be a $68 million contract guaranteed* — yes, more money, but not that much more while putting that future contract at risk of injury, cap restrictions, or global pandemics.
So, would Meier even sign his $10 million qualifying offer? He could, but he’s much more likely to look for an extension for more guaranteed* money. A player generally only gets one opportunity to sign their big contract — they’re not likely to risk it for a few dollars more.
But wait, you say. If Meier doesn’t sign his qualifying offer, he’ll be a restricted free agent, and a team could sign him to an offer sheet just like the Canes did with Jesperi Kotkaniemi!
Well, yes. But really, no.
Offer sheets carry with them compensation for the teams that will potentially lose the restricted free agent, depending on the average annual value of the contract the RFA signs. Kotkaniemi’s one-year, $6,100,035 contract was good for a first and third round pick for Montreal, which was probably a fair return for the Finnish center.
Potential suitors will run into an obstacle with Meier, though. A one-year deal like Kotkaniemi signed would have to be for more than the $10 million qualifying offer the original team gave him to keep him an RFA in the first place, that Meier would have already rejected, and the moment that contract’s AAV goes past $10,503,720, the compensation becomes four first round picks. Meier’s a very good player, but giving up four firsts, especially without conditions (no lottery protection), seems a bit much.
Giving Meier a high (but not too high) contract with term won’t work either — the AAV calculation for compensation is done by taking the total value of the contract and dividing it by the length of the contract OR five years, whichever is less. So a team might think it’s being careful by offering a 9x7 contract, that’s seen as a $12.6mil AAV ($63 million / 5 years) and worth four first round picks. The lowest seven year contract offer a team could made to drop to a lower compensation tier (2 firsts, a second, and a third) would be a 7.5x7 deal, which the Canes (or whatever team trading for Meier) would match faster than you can say “Montreal Canadien Sebastian Aho.”
Another potential risk the Canes would have that may be overblown is the signability of Meier in the first place. San Jose is not allowing teams to speak about a potential extension with Meier before a trade is in place, so there is some risk for teams that would trade numerous assets for Meier, only to see him walk away if he’s not interested in re-signing (or even if the team feels he’s not actually a good fit.) Since the Canes would be able to make the $10 million qualifying offer, there would be no chance of losing Meier this offseason, allowing the team to shop Meier and recoup assets dealt to get him in the first place. Something similar happened this recent offseason, when the Calgary Flames made their qualifying offer to Matthew Tkachuk, knowing that they wouldn’t be able to sign a long term extension with him, then dealt him to Florida. Being able to get nearly an equal return of picks and prospects (or potentially top veterans, like Calgary acquired from Florida) for Meier makes him a much lower risk “rental” than teams offering up first round picks and prospects for future unrestricted free agents.
There really isn’t another scorer on the market like Meier, and while the cost may be high, the risk is less than you might expect. If the Carolina Hurricanes are serious about a Stanley Cup run this season, it may have to come with Meier on the roster.
*guaranteed contracts not guaranteed due to buyouts, but that’s a story for another day
