3 reasons why Leon Draisaitl should sign a deferred payment contract with the Oilers

The Edmonton Oilers and superstar Leon Draisaitl are heading into a complex contract negotiation. While both sides are happy with working out a favorable deal, the salary cap is a significant obstacle.

Under traditional cap management strategies, there’s only so much that the Oilers can do to fit Draisaitl’s new contract under the cap. The Hockey News' insider Frank Seravalli claims Leon Draisaitl could get as much as $14 million over eight years.

In short, that cap hit is way too high for the Oilers to afford. But the Seth Jarvis contract extension with the Carolina Hurricanes opens an interesting avenue: the use of deferred payments. Under this contract structure, the Oilers could ostensibly pay Draisaitl for 10, 20 or even 30 years after the deal ends, reducing the contract’s overall cap hit.

So let's look at three reasons Draisaitl should sign a deferred payment contract this season.

3 Reasons why Leon Draisaitl should sign a deferred payment contract

#3: Guaranteed income

If Draisaitl signs an eight-year contract extension with deferred payments extending ten years after the deal ends, he will continue getting paid well after his playing days end.

From a financial management perspective, Draisaitl would be smart to arrange a “retirement” income. That's because professional athletes tend to struggle with money after their careers end.

#2: Support the Oilers’ cap management strategy

Draisaitl will help the Oilers manage the cap situation if he accepts deferred payments. That way the team can sign other key players, including Connor McDavid.

This strategy is fairly common in other pro sports like the NFL, NBA and MLB. Teams use the deferred payment structure to reduce cap hits, freeing up money today to build competitive rosters.

#1: Ensure the Oilers remain competitive

The Oilers are as close as any team can get to winning a Stanley Cup without doing so. However, maintaining the team’s competitive window open hinges on its ability to sign key players to fill the roster around Draisaitl and McDavid.

In essence, Draisaitl would be taking one for the team by accepting deferred payment. Similarly, the Oilers could employ a deferred salary structure with McDavid, ensuring the team can keep both players.

On the flip side, if Draisaitl chose to forego deferred payments, the Oilers might be forced to let him walk away or, worse, choose between him and McDavid.

The optics of such a situation would not sit well with Oilers fans. Therefore, Draisaitl could take the high road by accepting deferred payments. The team could afford to pay him a fair market salary while ensuring the Oilers remain contenders for the foreseeable future.