Lack of signing bonuses may have been factor in Erik Karlsson turning down Senators contract offer

As the Erik Karlsson saga evolves, here is Season 1, Episode 1 of What I Know And What I Think.

What I Know: While digging around in the days leading up to July 1 on what the Ottawa Senators might offer Karlsson in the way of a contract extension, I characterized it this way: “it would be in the neighbourhood of $10 million a season times eight seasons with some potential wiggle room.”

A source with knowledge of the offer said when all was said and done, the Senators’ did move north somewhat and the offer finally came in closer to $11 million than $10 million, bringing it pretty close to the extension Drew Doughty signed with the Los Angeles Kings, according to the source.

It might all be moot in the minds of those who believed if the Senators were really serious about keeping Karlsson they should have blown Karlsson away with an offer better than what Doughty agreed to when reports about Doughty’s deal were circulating.

Before anybody goes off on the idea this is a source within the Senators organization who is just trying to leak information to make the Senators look good and competitive in the bidding, this is coming from outside the organization.

While the offer might have been close enough in its totality to what Doughty received to at least seem to be negotiable, where the offer came up short, according to the source, was in the area of signing bonuses.

There wasn’t much in the way of upfront money in the form of signing bonuses, which, for me, was the most interesting part of the deal free agent John Tavares signed with the Toronto Maple Leafs. There have always been big signing bonuses in deals, but they are even more significant right now with the threat of another work stoppage on the horizon.

Players want as much as they can get as soon as they can get it. Can’t blame them.

Here’s how Tavares’ deal was structured:

Tavares gets $44 million of his $77 million contract in the first three years of the seven-year deal.

Also, when it came to the Senators offer to Karlsson, there apparently wasn’t an expansive no-trade clause in the deal, but, again, that seems like something that could have been negotiated if there was a willingness on both sides to get a deal done.

Sadly, for Senators fans, that will to get a deal done never seemed to exist and the Senators gave permission to other teams to negotiate an extension, kicking off the trade speculation involving mostly the Dallas Stars and the Tampa Bay Lightning.

What I Think: That the Senators apparently didn’t offer significant signing bonuses is more evidence the Senators are cash poor (as if you needed more evidence, even after their recent refinancing of $100 million U.S. in debt). Judging by the number of people I have run into this summer who have said they have been long time season ticket holders, but are not renewing because of the Karlsson situation and don’t want to support current ownership, it doesn’t sound like a lot of cash is flowing into the coffers.

Purely anecdotal, of course.

Paying out a mega-million, double-digit signing bonus on the execution of the extension and then every July 1 after that, which could significantly boost a team’s commitments in real dollars for the next few seasons, just doesn’t sound like something the Senators are capable of doing. That is going to make negotiations with forwards Mark Stone and Matt Duchene interesting, as well.

What I Don’t Think: Information has been sparse on the Karlsson trade front after there was lots of radio chatter a week ago. What we heard lately was Lightning GM Steve Yzerman saying of the reporting “it’s inaccurate,” and “nothing is imminent.” He did say “I don’t think it’s impossible,” when asked about bringing in another big contract without referencing Karlsson specifically.

After The Athletic reported last week the Stars were seriously in the hunt, the focus then apparently shifted to the Lightning and then back to the Stars before going quiet again.

There are lots of people asking when the deal is getting done and why it hasn’t been done.

I don’t think Senators GM Pierre Dorion is in a hurry to make what will be a career-defining trade. He doesn’t have a deadline right now. It sounds like he’s doing what he should do and that’s go back and forth between the interested parties, shopping offers back and forth. He’s got a good idea of what Karlsson is worth right now and he’s holding out to get it.

For me, the next pressure point doesn’t come until players report for training camp. Karlsson is worth more if a team gets him for all of next season, especially for what amounts to a $5 million discount (Karlsson has one year left on his deal which comes with a cap hit of $6.5 million next season).

I don’t think Dorion is going to blink here. If he doesn’t get what he thinks is fair value for Karlsson (start with Miro Heiskanen from the Stars and Brayden Point or Mikhail Sergachev from the Bolts), I think he’s ready to start the season with Karlsson, as uncomfortable as that might be for all the parties concerned.

At least I think that’s what he wants other GMs to think.

So yes, there is the potential for this to drag out for a while.

(Top photo credit: Marc DesRosiers-USA TODAY Sports)