Tampa Bay Lightning re-sign Mikhail Sergachev to three-year contract

The Tampa Bay Lightning announced that they have re-signed restricted free agent defenseman Mikhail Sergachev to a three-year contract. The contract has a cap hit of $4.8 million. According to Pierre Lebrun, the first year will pay him $2.4 million, the second year will pay $4.8 million, and the third year will pay him $7.2 million. $1.5 million in each of the first and second seasons will be paid as a signing bonus. Sergachev will be a restricted free agent again when this contract ends.

The Lightning still have more offseason work to do. Anthony Cirelli and Erik Cernak remain unsigned restricted free agents along with Mathieu Joseph and Alex Volkov. With this signing, the Lightning sit $2 million over the cap. We’ve known that the Lightning need to clear salary cap space and an attempt was made to make some room by trading Tyler Johnson, and eventually putting him on waivers. However, nothing has come on that front yet.

I’m very happy with this contract. More media speculation had been picking up in recent weeks that some teams should try to sign Sergachev to an offer sheet. But Sergachev would have to want to leave for that to happen. This contract also falls very much in line with what I was expecting a three year contract to look. Zach Werenski (3 years, $5m) and Charlie McAvoy (3 years, $4.9m) provided a solid comparable for Sergachev and his deal is right in line.

Something else that Sergachev and the team have done with this contract is deeply backload it. They have used the CBA’s restrictions on the variability of salary level by season to the fullest advantage. While it’s commonly accepted in finance that money today is better than money tomorrow, in this case, it should work out quite well for Sergachev. For at least the next two seasons, the escrow is set very high.

(Escrow is an amount of money that is held back from player salaries during a season. That money is then used to pay back the owners if the total spent on player salaries is more than the agreed upon revenue split. With revenues having already taken a huge hit with the end of the 2019-20 season and a likely down year again in 2020-21, the league is liable to end up needing a lot of money back from players.)

Additionally for Sergachev, if the season ends up being less than 82 games, and the players don’t receive their full salary, he’ll make up for it on the back end of the contract. He’ll also get some tax benefits in the first two years with the signing bonuses.

This is a well-earned extension for Sergachev. Since joining the Lightning for the 2017-18 season, he has recorded 25 goals and 106 points in 224 games. He set a career high in 2019-20 with ten goals, five coming on the power play, also a career high. Sergachev’s ice time has also steadily increased going from 15:22 as a rookie to 17:55 in his second year and then 20:22 last season.

Here’s a few reactions from around Hockey Twitter on this signing.