The biggest storyline for the Ottawa Senators at the moment has to be the uncertainty regarding Drake Batherson’s contract extension.
The reports are hardly encouraging. They have signaled a gap between the two sides, but haven’t really drilled down on why such a gap exists.
Well, now we may know why.
According to a recent report in RG Media, Marco D’Amico dissected the potential situation behind the hold-up between the Sens and Batherson.
In particular, the delay in the contract could boil down to the contract’s structure, something that goes beyond term and money.
The report highlighted that Batherson wants a contract similar to the one Alex Tuch got from the Washington Capitals. Tuch signed for eight years at $10.5 million per season. Now, the years and the dollar figures don’t necessarily seem to be an issue.
The issue seems to lie in the way the Capitals structured Tuch’s deal. D’Amico quoted an anonymous source stating that the structure seems to be the most important thing for Batherson at this point.
“When someone says Drake Batherson is looking for 10-11M similar to how Alex Tuch just signed, it also has to do with how that deal was structured. It’s not all about AAV.”
What this comment gets at is the fact that Batherson is looking for a front-loaded deal with plenty of signing bonus money.
If that’s really the case, and the Senators are willing to acquiesce, the deal needs to happen before September 16.
New rules come into effect on September 16 for Batherson and Senators
The entire situation here is that rules pertaining to the new Collective Bargaining Agreement (CBA) come into effect on September 16. And when they do, a contract structure like Tuch’s will no longer be possible.
To begin with, the Senators wouldn’t be able to front-load Batherson’s contract nearly as much. The new rules cap bonus money at 60% of the total deal’s value. In addition, the Sens wouldn’t be able to pay most of the money up front, and the heavily discount the final years of the deal.
As it stands, Tuch will make $15.7 million in real money next season with $10 million in bonus money. While the cap hit remains the same, Tuch will get $52.5 million of his $84 million in bonus money. That’s 62.5% of his entire paycheck in bonuses.
Plus, the $15.7 million paid in 2026-27, compared to the $9.42 million in 2033-34, implies a 40% difference. The new CBA caps the difference between the first and last years at 20%.
One final note. The entire reason for the bonus structure focuses on taxes. Bonuses are taxed much differently than regular salary. In Ontario, regular salary can get slapped with a tax rate of nearly 50%. However, bonuses come down significantly, with a tax rate of around 15%.
That’s why so many players push for signing bonuses. It’s all about tax strategy.
So, if Batherson’s camp is really serious about getting a deal similar to Alex Tuch’s, they’ll have to get the deal done within the next month or so.
If there’s anything about that structure the Senators are unsure of, they may have no other choice but to move Batherson the first chance they get.
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