On Friday morning, the New Jersey Devils signed Jack Hughes to his first ever professional contract. This was announced through the team’s official website and social media. Here is the official release of the news from the team and here is a feature article from the team’s official website which includes a behind-the-scenes clip of the contract being signed. As expected, Hughes was signed to the maximum amount for an entry level contract (ELC): three years with an average accrued value (AAV) of $925,000.
Seeing that the Devils drafted Hughes first overall at the 2019 NHL Entry Draft and the nature of entry level contracts, this signing was inevitable. The terms of the ELC should also surprise nobody. Top draft picks and young free agents out of college typically receive the maximum possible deal. Nico Hischier received it after he was drafted in 2017. Will Butcher had it, albeit for two seasons given his age. This is not new to the Devils, but let’s break it down because ELCs are not as simple as they may appear.
Hughes’ salary will be $832,500 with a signing bonus of $92,500 for the next three seasons. Those are the maximum allowed and that takes him to $925,000 per season. ELCs and contracts signed by players over the age of 35 are the only contracts that contain performance bonuses. Should the player meet them, they get paid more. This also raises the cap value for the player. While Hughes’ cap hit will start at $925,000, it could be higher by the end of the season. Sites like CapFriendly account for this by listing his base cap hit and his maximum average accrued value factoring in all performances bonuses. In this case, Hughes could earn up to $3.775 million. This means the Devils will need to maintain at least that much room for Hughes or risk having some of next season’s cap space taken up to make up for any bonuses that caused the Devils to exceed the cap ceiling. Today’s signing leaves the Devils with over $19.8 million in cap space, so this not an immediate concern. However, the Devils should prepare to expect Hughes to at least his some of his performance bonuses.
This is the interesting part to me and a point of discussion and hope for Hughes for the next three seasons. According to Exhibit 5 of the NHL Contract Bargaining Agreement (which you can get in many places, such as the NHLPA’s website), performance bonuses for all entry level contracts are divided up into Schedule A and Schedule B bonuses. For Schedule A bonuses, a player can earn up to $212,500 for meeting each of a list of performance parameters for their position. A player cannot earn more than $850,000 of Schedule A bonuses in a season. Schedule B is broader and can be worth up to a maximum of $2 million - which really drives the potential AAV of the ELC to be higher than its base salary. Schedule A comes before B, so if a player is receiving $1 million in bonuses, then the first $850,000 is for Schedule A and the remainder is if any of the Schedule B bonuses are met. The values can be negotiated but maximums are set by the NHL CBA.
In the case of Jack Hughes, he is a forward and since he received the maximum ELC, he can earn up to four of the following before these bonuses stop:
- Player must be among the top six forwards on the team in ice time with a minimum of 42 games played by the player and his teammates.
- 20 or more goals
- 35 or more assists
- 60 or more points
- 0.73 points per game or more with a minimum of 42 games played by the player.
- Player must be among the top three forwards in plus-minus on the team with a minimum of 42 games played by the player and his teammates.
- Player is named to the NHL All-Rookie Team
- Player is named to the NHL All-Star Game
- Player is named Most Valuable Player of the NHL All-Star Game
A number of these go hand-in-hand. For example, 60 points in 82 games works out to 0.731 points per game. Should Hughes get to 60 points at all, he will have achieved two bonuses.
Will Hughes be able to meet four of these in any of three seasons in his ELC? I think so. Given the structure of the roster, Hughes appears to be a lock for the top two lines right now. That will help him with the ice time bonus, especially if he receives regular power play minutes. Plus-minus may come down to usage. If Nico Hischier is the center for the “power” line in match-ups, then Hughes may have a good pathway to do well in this category too.
What about the production? A quick check at Hockey-Reference shows that while it has not happened a lot of times in Devils history (and Lou did not hand out a lot in performance bonuses), Hischier did reach 20 goals last season and Butcher had 39 helpers in 2017-18. They got bonuses for that. If Hughes gets off to a good start in terms of production and works well with some players, these are achievable marks. If not this coming season, then likely in the following two seasons of his ELC. Sixty points (and 0.73 points per game) may be a bit of a stretch. Let’s go back to Hockey-Reference. The last Devils rookie to break 60 points was Scott Gomez way, way back in 1999-2000 - and he was the third Devil in franchise history to accomplish that. The last Devils to have done so by their third NHL season since 2005-06 has been Travis Zajac and Zach Parise over a decade ago. Then again, neither Zajac, Parise, or Gomez dominated their draft year like Hughes did and making some think he can be a superstar center.
Making the All-Star Game will be unlikely as a rookie but if Hughes blossoms like we all hope he does, then do not be shocked if he gets there in season #2 or #3. The All-Rookie team is certainly a possibility in 2019-20. Some of the more recent rookie classes have been oozing with talent so it is not at all a guarantee that Hughes will make it. But given his talent and knowing he’ll at least start in New Jersey with great opportunities to succeed early, I am not at all ruling it out.
If I were to predict, Hughes will likely meet at least two of these in his rookie season and he could definitely hit four of them by the end of his ELC. I am rooting for him to meet at least four of these right away because it will mean he is an excellent player right away. That is definitely worth an extra $850,000.
The Schedule B bonuses are for league awards. To earn these bonuses, the player shall meet the following.
- Finish top ten in the NHL in goals, assists, points, or points per game among players who have played at least 42 games. Ties for tenth count for meeting the bonus.
- Win the Hart Trophy (MVP), Frank J. Selke, Trophy (best defensive forward), Rocket Richard Trophy (most goals), or Conn Smythe Trophy (playoff MVP)
- Make the First or Second All-Star Team at the end of the season.
There are also bonuses for winning or finishing as a finalist for the Lady Byng (most sportsmanlike player) and Calder (best rookie) Trophies, but they are not negotiable like the other awards.
For these, a player can still get a bonus if they do not come in first - they would just receive a lesser amount for, say, finishing third in voting for one of those awards or making the second NHL All-Star team. To get the full $2 million, it has to come with serious achievements. Personally, I would love it if Hughes wins the Conn Smythe in any of his ELC seasons. I am not expecting it because that would require a remarkably high amount of expectations and pressure. But it would be legendary.
Truthfully, I do not think it is fair to expect Hughes to get any ‘B’ bonuses until it is established what he does in the NHL. Even so, these are bonuses given to players who are among the very best at a young age. Most excellent players do not achieve these. But Jack Hughes could be a special one - we can always dream for the moment.
The long and short of it is that the Devils have inked Hughes to a contract and will need to keep more than just $925,000 available on the books for it. While I would love it, I am not certain Hughes will get to the maximum potential amount of $3.775 million. I am very confident he will earn some bonuses throughout the next three seasons. I am also very confident that even if Hughes does hit all possible bonuses, this will likely be the cheapest contract that he will sign for a very long time. Should Hughes be as good as he is projected, he will provide a lot more value than what $3.775 million may be worth for a NHL forward - and he will get paid incredibly well by the time as his ELC is about to end.
I am happy that Hughes is signed now and I am hoping he does so well that he meets several Schedule A bonuses and I’ll be thrilled if he meets some of the ones in Schedule B. What do you think? How many bonuses do you think Hughes will meet? Will he meet them right away or do you expect it in a season or two? While the signing itself is two days old, how excited are you for Jack Hughes now that he is officially a Devil? Please leave your answers and other thoughts about Jack Hughes and NHL ELC bonuses in the comments. Thank you for reading.