What does aav mean in hockey? (with examples)
Whenever a hockey season ends people consider it the end of one hockey season and wait for the next one. But, this is not the end for hockey lovers. Instead, summer brings some new happiness for them in the form of many off-season activities. These off-season activities include trades and singing that happen between two seasons of hockey games.
An abbreviation is used for such activities called AAV contract. So, What AAV does mean in hockey? AAV stands for Average Annual value. It is not a stat but actually the salary that a player receives annually. AAV can simply be calculated by taking the total number of contracts and dividing the number by the length of the contract and applying the amount of the salary cap.
We are going to discuss the AAV contract in detail. If you are curious to know all about the AAV contract in detail give a look at the article till the end.
What does an AAV contract mean in hockey?
The average annual value is the salary that a player earns per year. AAV is a contract and the contract in hockey are multiple-year agreements that players signed up for a long time. The way to calculate AAV is the total number of contracts of a player will be divided by the time for which a player signed up.
A player earns $ 5 million per year if he signed up for 20 million dollars for four years. This AAV value can be calculated when we divide 20 million dollars by four years. The resultant value is five million dollars. AAV is a frequently used method to measure and calculate a player’s per year cost.
This contract might be front-loaded or back-loaded in hockey. Due to this the athlete receive extra money in the starting year or last few years of the contract. The AAV is not just the value of cost a player receives every year but also the estimated amount of money that a player makes throughout the contract.
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How is aav calculated?
AAV calculation is simple in which the total number of contracts of a player is decided by the time duration for which the contracts are signed up. Players can sign up for a contract from 1 year to 8 years in hockey.
Here are some quick examples:
When a player signs up for a contract of 30 million dollars for 3 years. The AAV value of this contract will be calculated by the amount divided by the time of the contract. The $30 divided by the 3 years and the per year cost of the player will be 10 million dollars. Similarly, in an 8 years contract with 40 million dollars, the total cost of a player will be $5 million per year.
Why does aav matter?
AVV plays a vital role to help the league to evaluate the salary cap of a team.
There is an agreement between the owners of the hockey game (NHL) and the team players ( NHLPA ) that maintains the league operations and how the league works.
According to this agreement, all the income will be divided into two 50/50 parts equally between the NHL and all the players of the NHL teams. The teams are guided to prefer to spend a minimum amount of revenue on their salaries. But they can also spend a maximum amount of the total revenue on their salaries. All this process is known as a salary cap.
The salary cap of the team was $60.2 and the ceiling was $81.5 for the 2019-2020 season. Many teams had a few million dollars to use for their salary cap ceiling. NHL provides a range to spend the money from the salary cap.
NHL takes the total AAV of all the contracts of the players collectively to find out whether the amount that players are spending on their salaries meets the range of the salary cap or not. The minor players are excluded from this agreement and a maximum of 22 to 23 NHL players are included.
No team is allowed to add players to their team who accumulate AAV more than the range of the salary cap. When a team does so, it has taken the players off from trade, and wavies and these players will be added to the minor players.
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Do players get another amount besides their AAV?
Yes, Players do get some extra money other than their AAV. NHL players do not just take their annual amount home. Players always receive their all payments at the end of their contracts. But sometimes they do not get their amount as AAV amount. There are some actual contracts that are paid differently from AAV. Mitch and Marner Matthew Tkacher are two interesting contract structures other than AAV.
Mitch Marner Structure
Marner signed a contract for more than 6 years which is mentioned below. In this contract, Mitch Marner gets a decent amount at the start of the contract and at the end of the contract as well.
This structure is useful because the money you get today is better than the amount you receive tomorrow. Because today’s amount can be invested and generate profit. In this way, one can make more money.
|Year||Base Salary||Signing Bonus||AVV amount||Yearly Cash|
Mattew Tkachuk Structure
Here is a contract signed for more than 3 years with an amount of 21,000,000 by Tkachuk. If you pay a bit more attention to Mattew’s contract structure you will notice that all amounts will be paid at the end of the contract. Matthew Tkachuk’s contract will end while he is a restricted agent and he also needs to bargain with (Calgary Flames) his current team.
This was a smart step that Tkachuk takes and negotiate the structure and the amount of the contract to the Flames. Because Calgary Flame will qualify him again as a restricted free agent once the contract end. The flame will offer him a minimum of 1 year to play with them at the previous salary. Tkachuk will be offered at least $9,000,000 for one last year as a restricted free agent.
|Year||Base||Signing Bonus||AVV amount||Yearly Cash|
Conclusion: What does aav mean in hockey?
The average annual amount is the estimated salary of the player that he makes throughout the year. We can simply calculate it by adding the contracts of all the players by the time duration for which a player signed up for the AAV contract.
For instance, if a player signs up for an 8-year AAV contract with 40 million dollars, the resultant amount will be $5 million every year. AVV also matters because it is a complete measure to evaluate the salary cap of a team. There are some other contracts other than AAV such as Mitch Marner and Mattew Tkachuk.