Analyzing Nathan MacKinnon’s Looming Extension

Via NHL.com and CapFriendly

Nathan MacKinnon is the cornerstone player of the Avs’ current team. He’s a past first overall draft pick, stud superstar center, and fodder for highlight reels, but his relatively ‘cheap’ $6.3 million cap hit is about to run out. And, even though MacKinnon said he would “take less” to benefit the team’s cap situation in a 2019 Forbes article, it seems he’s now leaning towards a large contract over a discount, according to Jeff Marek and Elliotte Friedman on 32 Thoughts on August 25th.

Back in 2016, when MacKinnon’s Entry-Level Contract expired, the Avs and GM Joe Sakic lucked out as MacKinnon had yet to have his breakout season. Sakic signed him to 7 years at $6.3 million, a contract that quickly become one of the best values in the NHL following MacKinnon’s 2017-18 explosion.

Since then, MacKinnon’s play has been superstar level with 442 points since 2018, good for third in the NHL behind Connor McDavid and Leon Draisaitl in that time frame. He’s also a 2014 Calder Trophy winner, three-time Hart Trophy finalist – including second in 2018 and 2020, 2018 Lady Byng winner, and 2022 Stanley Cup Champion. It seems criminal he’s yet to achieve the 100-point mark, a litmus test for forward greatness — though it’s hardly his fault with two Covid-shortened seasons and multiple injuries.

Now, MacKinnon is looking for a large and expensive contract.

The Avalanche want to re-sign MacKinnon to a lengthy extension. Joe Sakic and new GM Chris MacFarland have stated it’s one of their highest priorities for this offseason. His high price tag, however, will require roster movement and cap math for the cap-crunched team.

With his level of success and production, he’s bound to earn it, whether in Colorado or elsewhere.

How Much?

According to 32 Thoughts, MacKinnon may be looking to become the highest-paid player in the NHL. There are a few ways to look at that statement. Currently, the highest contact cap hit belongs to Connor McDavid at $12.5 million, but contracts like Shea Weber’s 2012 14-year deal with the Nashville Predators have a higher overall value. Further, the highest yearly salary belongs to Joe Sakic at $16.45 million. However, with the way the salary cap and contract limitations are now structured, there is no way for MacKinnon to sign for longer than eight years or make more than $16.5 million.

So, if Nathan MacKinnon is set the become the highest-paid player in the league, he’ll likely sign an 8-year $13-14 million contract with the Avalanche through some mix of base salary and bonuses to protect against lost money due to lockouts. It’s also likely the contract is front-loaded like McDavid and Mitch Marners’ contracts.

Whether the contract settles at $13 million or $14 million or somewhere in that range doesn’t matter, Nathan MacKinnon’s next contract will most likely double his previous cap hit.

That’s not a pill the Avalanche are prepared to easily swallow.

Avalanche Sacrifices

If MacKinnon is set to sign in the $12-14 million range, the Avalanche’s cap situation will experience stress in a way they’ve managed to avoid for years. As it currently stands, CapFriendly reports the Colorado Avalanche with $3.9 million in cap space for the 2022-23 season with a roster of 21. Next season, the league will see the cap raise $1 million to $83.5 million, but the notable contracts of J.T. Compher, Bowen Byram, Alex Newhook and Erik Johnson are set to expire in addition to MacKinnon’s.

While Erik Johnson’s contract ($6 cap hit) will clear up some space, the Avs must move a player or two to fit MacKinnon’s new contract. Most likely, this means J.T. Compher will hit free agency at the end of the 2022-23 season unless he’s willing to sign for at the same or less as his current cap hit of $3.5 million. With Bowen Byram and Alex Newhook coming off ELCs, even that seems like too much. The Avs will have to look to cheap internal promotion at league minimum to fill Compher’s spot. Even with J.T. gone, it would not be shocking to see the likes of Newhook or Byram wearing a new sweater, especially if the two young players break out this season, where they are expected to see more responsibility and games respectively. Devon Toews is another player will an expensive contract on the way, one the Avs probably won’t give.

While it always hurts to see a team-drafted or successful player leave, that’s the reality for the Avs moving forward from a MacKinnon extension. Or, at least until the expected cap jump in a few seasons.

Bottom Line

The Avalanche would be stupid to let a cornerstone player like Nathan MacKinnon walk over an expensive contract. They’ll pay the price of his extension, no matter the cost. It’ll lead to a few player losses and years of cramped cap space, but the expected rise following the 2023-24 or 2024-25 season will provide a measure of relief for the team.

It’s also important to note that the issue of cap space is not unique to Colorado Avalanche. The majority of the league is currently above, at, or within $1 million of the cap ceiling and, while LTIR can solve some problems, it isn’t magic. In this era of NHL hockey, every team is playing salary cap math.

If the Avs want to re-sign MacKinnon to a $100+ million contract, they need to join in. And they should, MacKinnon is the type of player worth a few sacrifices.

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