The San Jose Sharks have locked up their franchise superstar, but the cost signals dangerous waters ahead.
Five years, $94 million, $18.8 million a year — and Celebrini turned down the $20.8 million max. Grier thanked him publicly for “the flexibility they have provided to the team in how we allocate future dollars.” —NHL
That $18.8 million average annual value, while it may not compare to other top earners in the rest of the major sports leagues in America, makes Celebrini the highest paid player in hockey.
He deserves to be. He has taken the league by storm. Last season he posted 45 goals and 115 points in 82 games, finished fourth in Hart Trophy voting, and was named IIHF Male Player of the Year. His 115 points were the third-most ever by a teenager, behind only Gretzky’s 137 and Crosby’s 120.
And he technically just took a discount, albeit a small one. The maximum any player can earn is 20% of the cap, which comes out to $20.8 million next season. Grier says ownership was willing to pay it. Celebrini said no. While he could have signed for as many as eight years, the young cornerstone strategically signed for five. This makes him eligible for a new contract, and what would likely be a significantly higher average-annual-value, before his age 25 season.
To put Celebrini’s new deal into perspective: it doesn’t start until 2027-28, when the cap will be $113.5 million. That $18.8 million will eat 16.6% of it. When Sidney Crosby signed his 12-year, $104.4 million extension in July 2012 — a deal that kicked in for 2013-14 against a $64.3 million cap — his $8.7 million cap hit represented 13.5%.
The danger San Jose now faces is they have an emerging young core who are entering contract extension territory, and the Sharks can’t do for them what they have done for Celebrini.
The NHL has a hard cap. It sits at $104 million for 2026-27, up $8.5 million, and is locked in at $113.5 million for 2027-28 — the last year the league and the players have confirmed. Rookies begin their careers on entry-level contracts, cost-controlled deals that run three years for anyone signed between 18 and 21. After that is where things get extremely volatile.
Celebrini’s deal is a consequence of a standoff between the Ducks and the Flyers earlier this summer. Leo Carlsson is a talented young center for Anaheim who came off his entry-level deal on July 1 and became a restricted free agent — which is what made him eligible to sign an offer sheet. Philadelphia took advantage on July 3, tendering Carlsson a five-year, $90 million deal at $18 million a year. Carlsson signed it. Had Anaheim not matched, Carlsson goes to Philadelphia and four Flyers first-round picks go to Anaheim.
The Ducks matched, and throttled their salary cap flexibility in the process. They now sit under $10 million in space with Cutter Gauthier — a 41-goal scorer — still unsigned.
The biggest winner of the deal wasn’t Leo Carlsson. It was Macklin Celebrini. Being a vastly superior talent to Carlsson, and seeing what Carlsson had just been signed for, the leverage flipped in the Sharks forward’s favor. Celebrini wasn’t offer-sheet eligible this summer — he still has a year of entry-level left and wouldn’t have hit restricted free agency until July 2027 — but that was exactly the problem. Grier said it out loud: the goal was not letting Celebrini reach next offseason unsigned. Because next offseason, someone tenders him $20.8 million and forces San Jose to match.
The Sharks bit the bullet and secured him for the next half-decade at just under $19 million instead.
The Sharks have had incredible draft lottery success the last few years, and now their other recent first-round picks will be looking to cash in as well. Will Smith, fourth overall in 2023, enters this season on the final year of his entry-level deal — which makes him extension-eligible right now, and offer-sheet eligible in July 2027. Michael Misa, second overall in 2025, has two years left; he becomes extension-eligible in July 2027 and offer-sheet eligible in 2028.
This summer, the Sharks drafted Ivar Stenberg second overall. Stenberg is a Swedish winger out of Frölunda who put up 11 goals and 33 points in 43 games in the SHL — as an 18-year-old, against grown men. He’s three short years from the same cliff San Jose just pulled Celebrini off of.
San Jose has also already committed north of $24 million a year in long-term money to Mason Marchment, Darnell Nurse and Jacob Trouba. The cap goes up, but perhaps not fast enough.
The Sharks’ window to win their first Stanley Cup has shifted from the next decade to hurry up before this thing implodes.
California isn’t doing the boys in teal any favors either. The state boasts the top marginal income tax rate, 13.3% — the highest in the country. As a California resident he owes California on his entire income, home and road, with credits for what he pays elsewhere. A Florida/Texas/Nevada-based player pays zero state-tax on roughly half his season by simply playing at home.
The last team to win a Stanley Cup out of a genuinely high-tax American state was the 2014 Los Angeles Kings. The last Canadian winner was Montreal in 1993 — thirty-three years ago. Since 2020: Tampa, Tampa, Colorado, Vegas, Florida, Florida, Carolina. Five of those seven play in states with no income tax at all. The other two, Colorado and North Carolina, are flat-tax states under 4.5%.
I’d love to see the Sharks get over the hump and finally win a Cup after years of close calls and then nearly a decade of losing that has led them to this draft lottery abundance.
But I’m also reminded what a great position the Hurricanes are in, with nearly all of their core locked up for the next five years and beyond at a fraction of what San Jose is going to have to dish out.
The NHL is a microcosm of the economic transition taking place on the continent writ large. High-tax areas lose, low-tax areas win.
That’s one reason the Stanley Cup is sitting in Raleigh today.
Cue the hysterical attempts to moralize that reality.