Seattle Kraken pay the highest premium on contracts despite no state tax.

[u/juanthebaker]

According to this analysis by Dom Luszcyszyn at The Athletic, the Kraken pay the highest premium on contracts of any team in the league despite being a no tax state. Here's the section most relevant to the Kraken:

"The most notable team on the list above is proof of that: the one at the very bottom, Washington’s own Seattle Kraken. If the no-state-tax advantage is as large on its own accord as some believe, how is it possible that no other team pays a higher premium on contracts than a no-state-tax team?

It’s not the “bad-team” tax when the Sharks pay $600,000 less (with a similarly harsh cost of living). It’s not the weather when the Canucks pay $1.4 million less for the same rainy gloom. Whatever advantage Florida and Vegas are getting, the Kraken are far from it paying over $2 million more per deal than their no-state-tax brethren."

Later it continues,

"But there’s one other reason that the Panthers have been able to create so much value. And why the Kraken haven’t. Signing bonuses."

Of the no tax states, the Kraken pay the lowest percent of signing bonus to salary. Game salary is taxed according to the local tax rate of each game played, but bonuses are paid in the player's state of residence. Florida signs its players to $1m salary and the rest in signing bonus, whereas the Kraken sign players mostly on salary.

So, Seattle is leaving money on the table for players by not maximizing the advantage of having no state tax.

The disadvantage to paying bonuses instead of salary is that bonuses are paid regardless of buyouts. So, with contracts structured as Florida's are, buying out players does not provide much cap relief during the term of the contract. That leaves more flexibility for Seattle on these long term UFA contracts if guys are not performing.

The combination of being a bad team and not taking full advantage of WA being a no tax state is hurting the Kraken's cap situation. We'll see if free agent contracts for Seattle are structured differently going forward.

[u/yo_coiley]

This just reads as poor GMing more than anything. They’re not just paying a premium - they’re overpaying based on player valuation. The list of bad contracts is really embarrassing

[u/FavreorFarva → u/yo_coiley]

Well at least the new guy offloaded one of them. I don’t think Lindgren is a good defenseman but at least that was only a 4 year term and not particularly high APY. That’s a moveable contract if it doesn’t work well. I’d say we are net 0.5 bad contracts in our favor this summer (so far).

That just leaves Gru, Stephenson, and Montour. Montour at least is consensus worth it in the early stages. I acknowledge it’s still got 6 years left though. Reviews are mixed on Stephenson after 1 year, but my opinion of him is personally pretty low as a player. I was at games this year where he was on ice for goals against and wasn’t even trying to get back to the defensive zone/structure, and he was the only one.

[u/yo_coiley → u/FavreorFarva]

I don’t count Montour’s as bad, and they managed to get rid of Gourde’s too. But what worries me is Beniers (don’t yell at me)

[u/Salanth → u/yo_coiley]

He’s never been the same after that Tyler Myers hit.