Steven Stamkos and financial case for staying with Lightning
When it comes to Steven Stamkos and his free-agent motivations, you hear a lot of things. Like how much he desires to be closer to Ontario, or the weight he gives to winning a Stanley Cup or playing his natural position at center.
But in the end, Steven Stamkos is potentially the biggest free agent to ever hit the open market at 26 years old. He might only get one shot to cash in on this historic level. So the money matters. Of course it does.
The money matters to the Tampa Bay Lightning as well. What Stamkos signs for affects what Victor Hedman signs for, as well as a slew of other key players. And they need Stamkos to sign for their number due to previous overpayments, too, like Ryan Callahan.
The long-rumored offer to Stamkos from the Lightning: $8.5 million over eight years. They’re the only team that can offer him that eighth year, per CBA rules.
That would mean Stamkos, the single most coveted free agent in recent NHL history, would end up with a lower average annual contract value than eight of his peers. He would fail to clear the $10 million threshold that Jonathan Toews, Patrick Kane and Anze Kopitar all did. Stamkos is a really down-to-earth and solid dude, but again, you only get one crack at a contract like this.
So let’s say the ego is unchecked and Stamkos weighs the financial gain rather heavily. Could the Lightning still retain him?
Yes, writes Tampa Bay Times columnist Joe Smith. From Smith:
As a Tampa Bay Times analysis in January showed, Stamkos could net nearly the same annually after taxes in Tampa Bay at $8.5 million as $10 million in New York (Rangers, Islanders), presuming he’d be a New York City resident; Stamkos would make more over the length of the deal in Tampa because of the extra year. Stamkos would net $500,000 less annually than a $10 million deal with Detroit, another strong suitor, but, again, more over the length of the deal.
And Stamkos’ hometown Maple Leafs, due to a 53.53 percent combined federal/provincial tax rate, would have to offer him $12.37 million annually over seven years to net the same as he’d make over eight years at $8.5 million in Tampa, according to national sports tax guru Robert Raiola, the director of the Sports and Entertainment group at PKF O’Connor Davis, who has professional sports clients throughout the country.
Quebec (53.31 percent), where Montreal plays, has almost the same combined tax rate as Toronto; British Columbia (where the Canucks play) is 47.7 percent. Of course, Toronto likely offers more endorsement opportunities.
As Jaromir Jagr will tell you, the tax benefit of playing in locations like Texas and Florida is a draw for some free agents.
So while the numbers aren’t as gaudy, the actual dollars in Tampa are competitive with those in other markets – even if, as Smith notes, it can’t match the endorsement potential for Stamkos should he return opt to play in Canada.
One other caveat: The max contract. Not many suitors are in a position to offer one, but if someone like Buffalo offers $12 million annually Smith said the Lightning would have to go up to $9.7 million on an eight-year deal to match the real dollars.
The clock is ticking on the Lightning and Stamkos, who can only ink him to an 8-year extension while he’s under contract, i.e. before July 1.
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Greg Wyshynski is a writer for Yahoo Sports. Contact him at [email protected] or find him on Twitter. His book, TAKE YOUR EYE OFF THE PUCK, is available on Amazon and wherever books are sold.
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