The Toronto Maple Leafs could look quite different next season. From star forward Mitch Marner testing free agency to a wealth of vacant spots up front to fill either via trade or free agency, General Manager Brad Treliving has the opportunity to put an additional stamp on the team he took over in 2023. But what he should try to avoid, if possible, is using buyouts.
There’s been some talk that the Maple Leafs may use the buyout tool to part with some depth forwards who have term on their deals. And while there are many cases where buyouts can make sense, the Leafs do what very few teams have done: they sign mid-range players to lucrative signing bonuses that effectively take away much of the savings that come from a buyout.
Understanding Buyouts
To fully grasp why buyouts are less effective for the Maple Leafs, it's important to first understand how they work. For teams that want to part ways with a player outside of waivers or a trade, the option of buyouts exists.
For players aged 26 or older at the time of the buyout, the team is required to pay two-thirds (2/3) of the remaining base salary owed on the contract. For players under 26, this obligation is reduced to one-third (1/3) of the remaining base salary. A critical rule governing buyouts is that the total cost is not paid immediately but is instead spread out evenly over a period equivalent to twice the remaining years of the original contract. This provision is significant because it extends the financial burden far beyond the original contract's natural expiration date.
Not factored in the buyout calculations is signing bonus money. That obligation (including the proportion of it that pertains to the salary cap hit) is fully paid to the player, making the overall cap hit higher than the standard 1/3 or 2/3 obligation.
In the Brendan Shanahan era of the Maple Leafs, the club made doling out signing bonuses to mid-range players fashionable. They started this with players like Kasperi Kapanen and Andreas Johnsson, essentially giving the maximum signing bonus allowed as a total year’s compensation, less the NHL minimum salary. Other teams have done this as well. Some teams have reserved it just for their star players, but the Leafs have continuously paid out signing bonuses, which provides more 'buyout-proof' money for the player.
So let’s take a look at a couple of buyout candidates.
David Kampf: AAV $2.4 million through 2026-27
With two seasons remaining at an average annual value (AAV) of $2.4 million, a straight buyout would have resulted in a four-year cap hit of $800k per season. However, because Kampf’s compensation sees him earn $1.325 million of that $2.4 million as a signing bonus, the cap hit in a buyout for Kampf jumps to $1,683,333 million in each of the next two seasons, resulting in a savings of $716,667 on the books for 2025-26 and 2026-27. Plus, the Leafs would have a $358,333 cap charge for 2027-28 and 2028-29. Granted, these amounts are less than what they would be without signing bonuses. The cap savings realized by not just letting Kampf’s contract expire are rather negligible.
Calle Jarnkrok: AAV $2.1 million through 2025-26
Like Kampf, Jarnkrok is owed a signing bonus of $1.325 million. So instead of a $1.4 million savings via a buyout, it diminishes to $516,667. It is likely more advantageous to retain 50 percent of the contract after that bonus is paid out, especially for a team looking to reach the salary cap floor.
Max Domi: AAV $3.75 million through 2027-28
Of the $10 million remaining on Domi's contract, a whopping $5.5 million comes via signing bonuses. As a result, a buyout of Domi, if the Leafs wanted to do it, would save them just $1 million per season in the next three seasons. Would a $1 million player adequately replace Domi's contributions? It is unlikely, which raises the question of the buyout's true value.
Alternative: The Trade Market, waivers and buried contracts.
Toronto’s best course of action is probably to try and move any player they do not want via trade. Even if they have to retain some money in doing so, the cap hit would not only be less, but it would also not extend beyond the original term of said contracts, unlike a buyout.
The first buyout window opens 48 hours after the Stanley Cup is awarded and closes before free agency. If the Leafs find they need some cap space and want to move on from those players and they cannot find a trade that is suitable, the only other time they should entertain a buyout would be during the second window in the summer that opens after a player files for arbitration. Shortly after a team settles its final arbitration case, the second window opens. Then, and only then, should the Leafs even consider entertaining the scenario.
But due to all the middling signing bonuses dolled out to mid-range players, they really should avoid it at all costs. This speaks to a bigger issue: If the Leafs want greater roster flexibility in future years, they should probably rethink handing out these signing bonuses. As long as the cap goes up, however, the Leafs are going to use bonuses as a means to attract players, and then likely trade players after those bonuses are paid out to teams looking to reach the salary cap floor, offering a lower actual salary cost but a higher AAV on the books. This strategy, while attracting talent, ultimately limits their future cap maneuverability.
But as you can see here exercising a buyout makes little sense. Toronto is better off trading players. Even burying a player after putting them on waivers provide a cap savings of $1.15 million which is higher than any of the above-mentioned examples. That way you. have the player if you need them back up.
