How the LA Kings Can Weaponize Deferred Salary with Marner and Gavrikov
The Kings are going to need every inch of cap creativity this summer. Especially if they’re serious about adding Mitch Marner. Or keeping Vladislav Gavrikov. Or, dare I say, both.
So here’s a tool that’s flown mostly under the radar, even though it’s sitting there in plain sight: deferred salary. It’s not a loophole. It’s not cheating. It’s just accounting. And it can actually lower a player’s cap hit, as long as that player is cool with getting a few million bucks after his career ends.
Sounds weird, right? It is. But it just may be crazy enough to work.
How Deferred Salary Actually Works
Deferred salary is exactly what it sounds like: you pay the player later. A chunk of their contract gets pushed into the future, and often wayyyy into the future. Because the NHL only counts the present-day value of those payments, it lowers the player’s cap hit now. It’s not a discount. It just looks like one on the books.
Take Frank Vatrano’s new deal with Anaheim. He signed for three years and $18 million, but the Ducks deferred half of it, meaning there are 9 million dollars he won’t see any of until 2035, when he will begin receiving $900,000 a year for 10 years. That money WILL count against Anaheim’s salary cap, but by 2035, who knows what the NHL’s salary cap ceiling could be. Back to today. On paper, this shaved Vatrano’s AAV down from $6 million to $4.57 million for the next three years. That’s a huge difference and it’s all perfectly legal under the NHL’s CBA. So, why can’t the NHL’s 4th most valuable franchise with one of the richest owners in all of pro sports do the same? They absolutely can and should absolutely try to.
Now before we dive into this exercise, it’s important to note that the players the Kings are targeting would have to want their salary to be deferred. This is not a simple ask. Most athletes prefer their salary to be front loaded, not paid out a decade later. However, there may be something attractive about being paid a substantial salary for 10 additional years post-retirement. Not only does this essentially extend the term of the contract, but it also gives the player flexibility to be taxed in the state or province of their choosing. For example, if the Kings signed Brad Marchand for three years and deferred some of his salary, the player can relocate anywhere he wants and his deferred payments would be taxed according to the state or province he resides in at the time.
NOTE: The numbers presented are mostly arbitrary for the purposes of explaining the structure. In reality, players would likely need to be offered more real dollars for deferred payments make more sense for them.
Mitch Marner - 7 years, $98 million
$14 million AAV
Let’s say the Kings land Mitch Marner at 7 years, $98 million. That’s a $14 million AAV. There’s quite a bit of sticker shock to that number, even though the percentage of the cap would probably be in line with Marner’s previous earnings. Still, for a team that’s trying to win a championship in a short window of time, every dollar matters. So let’s board the crazy train and see what LA can do with the deferred money option
If the Kings defer $2 million of his salary every year AND don’t start paying that chunk until 2041, the cap hit drops. Pretty significantly. According to PuckPedia’s calculator (which uses the NHL’s go-to 5.41471% interest rate), here’s what that actually looks like:
$14 million total deferred
Deferred payments begin in year 17 (yes, 2041)
Present-day value of that deferred money is just under $5 million
Cap savings per year: $1.14 million
New AAV: $12.86 million
So Marner still pockets the full $98 million. But on the cap, it registers like he’s only making $90M for the duration of the 7 years. So essentially, the Kings save space now, pay the bill later, and probably hope inflation in both the dollar and the NHL’s cap limit makes $2 million in 2041 feel like pocket change.
Vladislav Gavrikov - 8 years, $60 million
$7.5 million AAV
Now imagine applying this to Gavrikov. Let’s say it’s 8 years, $60 million, resulting in a $7.5M AAV. If the Kings defer $1 million per year and don’t start writing those checks until 2041, the AAV drops to $6.93 million.
$8 million total deferred
Again, deferred payments begin in 2041
Cap savings per year: $570,000
New AAV: $6.93 million
That’s nearly $570K off the books annually. Not nothing. Especially when you’re trying to shoehorn a contender into a hard cap and still eat three retained salaries from previous regimes. Now, one might argue that you’re essentially just retaining MORE salary in the future. True, but the inflation of the cap must be considered. Paying Gavrikov $1 million per year for 8 years starting in 2041 could be negligible.
It’s the same logic: less money on the books now, full money to the player later. Cap flexibility up front, cash liability down the road. There’s a small chance that ownership might sweat a little in 2041, but today, Ken Holland gets to use all the tools in his toolbox to get the Kings over the hump.
OF COURSE, There is Risk
As previously stated (and important to repeat), LA would still owe the money. It doesn’t vanish, it just hides behind a calendar. Deferred salaries don’t help with escrow either, since the NHLPA looks at actual cash paid each year, not the cap hit.
But if you’re trying to win in the next three to five years, and you’ve got an ownership group willing to deal with a potential mess later, this is how you get creative. It’s a legal workaround that lets you weaponize time.
And if it means getting Mitch Marner for a cap hit of $12.86 million instead of 14? It just might be worthwhile to explore.
If it gets you Marner and Gavrikov at a combined $19.8 million, that could give you the type of flexibility to round out your roster in a more efficient way. This is a far less likely scenario, as deferring two big contracts may be playing with fire.
