Eggs Bennett 22-04
April 28, 2022
This is the third article in a series called Killer Contracts. With just one game remaining in the Habs season, the HuGo window of assessment to determine who fits for the short, medium, and long terms is closing. Management impressions have been formed and decisions are being made. HuGo is getting ready for the next two windows of change for the Habs – the window leading up to the draft, and the free agency window.
There is no question about whether HuGo will try to move some problematic contracts. Getting younger and faster necessitates moving some bodies to make room for kids. If they wish to be active in free agency, they need to clear some cap space. The only question is which contracts go.
In the first article I considered Shea Weber, the Man Mountain of Killer Contracts. Jeff Petry was the focus of the second article. Next up is Brendan Gallagher.
The Contract Background
Gallagher is currently in the first year of a 6-year, $39M contract with an AAV of $6.5M. He will turn 30 on May 6th and will enter next season with five years remaining on that deal. The contract has no signing bonuses to consider. The third and fourth years of the contract are most expensive, with $8M and $9M being paid out respectively.
How did this killer contract come to be?
Gallagher was drafted by the Montreal Canadiens in the fifth round of the 2010 draft at 147 overall. He developed for a year in the WHL with the Vancouver Giants and then signed his entry level contract for the 2011-12 season. He continued his development in the AHL with the Hamilton Bulldogs for one full season and part of the next during the NHL lockout, and then made the Montreal Canadiens team out of a late camp for the 2012-13 season. It was the first year of Marc Bergevin’s tenure.
In November of 2014, Bergevin signed Gallagher to a 6-year, $22.5M contract with an AAV of $3.75M. Over the course of that contract, Gallagher was a top performer for the Habs, for several years a third of one of the most dominant lines in the NHL with Tomas Tatar and Phillip Danault. The contract was seen as one of the best value deals in the league. In October of 2020, entering the last season of the contract, Bergevin signed Gallagher to his current contract.
Wear and tear. That’s the killer. Gallagher is a Nissan Micra that has played like a Jeep Wrangler. The fearless style of play has taken a toll on Gally’s body, and the result has been a considerable number of man games lost to injury.
In the 2015-16 season Gallagher missed 29 games after two fingers on his left hand were fractured when he blocked a shot and from Johnny Boychuk on Nov. 22, 2015 and required surgery the following day. He lost eight weeks in the 2016-17 season after being hit by a Shea Weber shot and needing surgery to repair the same hand that had been reconstructed the previous season.
In the past two seasons, this one included, Gallagher has been in and out of the line-up with random lower and upper body injuries. Gally’s body is showing the wear and tear of his hard-nosed play, both through man games lost, and his ability to perform up to standard when he is in the line up.
Gallagher’s contract is one that HuGo must be reviewing and considering options. The mismatch between production and dollars and term, and the likelihood that the mismatch will only get worse, necessitates this review and consideration. Gallagher has a six team no trade list, which adds a layer of complication. Another complication is Gallagher’s value to the Habs as an emotional leader and 5-on-5 contributor, even if those realities are gradually shifting to the past tense.
This is a killer contract that will be a source of angst for HuGo.
In the fixer category, there are several options to consider where Gally is concerned. If HuGo concludes that Brendan Gallagher is not part of the solution moving forward, they can try to deal him this summer. A decision to do so would confirm they are concerned that they may be forced to sell lower in the future than they would this summer.
A trade partner for Gallagher would have to be able to make the cap hit work, while being convinced that he could be useful in their line-up. Here are some examples of teams that may fit those criteria, and some reasons why Gally might be a fit.
The path of least resistance is to do nothing and wait. In a perfect world, Gallagher heals over a long off-season, and returns ready to be his old self or at least the adjusted version that Martin St. Louis envisions. If the Habs could pull another good year or two or three out of Gallagher, imagine the potential if they could draft Shane Wright and he could begin his career with Gally on his right wing.
Keeping Gallagher for another year could have several outcomes. One outcome is that he deteriorates and has less trade value next off-season than he does this. That is the risk HuGo would be taking in keeping Gally. However, there are some potential positive outcomes to consider. Gallagher could prove himself valuable enough to the Habs moving forward to be worth the contract. He could raise his value enough to make a trade more likely with a year less remaining on the term. Or, as a final potential outcome, another year burned could make the third option less painful.
That third option available to HuGo is to buy out Gallagher’s contract. This is what that would look like if Gallagher was bought out this summer.
A 10-year cap hit is less than appealing and feels like it would be an incredibly premature tool to use in Gallagher’s situation. In fact, if HuGo were prepared to entertain a buyout, it would be more advantageous to try to make a trade while retaining up to $2.67M.
Alternatively, buying out Gallagher after next season, should he continue to struggle and a trade does not materialize, would be slightly more palatable.
Again, a trade with salary retention makes more sense for the Habs. In both buyout scenarios, there is a painful cap hit year at 2026-27, and by that time they will be in desperate need of that cap space. Even if they held him for three more seasons and then bought him out, the cap hit in 2026-27 is still $4.67M. Having Gallagher on the books for $1.5-2.5M for a shorter period because they retained in a trade would be considerably more advantageous to the Habs.
Brendan Gallagher will not finish this contract with the Montreal Canadiens, but his pathway is tough to predict. With his injury history, LTIR is a realistic eventuality. The buyout cost is enormous, so LTIR might be preferable if not controllable. A trade feels like the best option, if there is a trade partner to be found.
We do know one thing – HuGo has voiced a distaste for selling low. The question is whether they are prepared to bite the bullet this off-season, or if they will take the risk that Gallagher’s trade value will rise rather than drop for another trade window.
With all the chatter surrounding another big contract in Montreal, Gallagher’s is the one I believe poses the highest risk for the Habs and may be giving HuGo the biggest headache.