Why the Maple Leafs Don't Owe Sheldon Keefe Any Money Following His Signing With the New Jersey Devils

The New Jersey Devils made it official.

The club hired former Toronto Maple Leafs head coach Sheldon Keefe on Thursday.

“This is an exciting time, and I’m honored to be a member of the Devils’ organization,” Keefe said in a team release. “To have the chance to lead this young, dynamic team and to see the potential that can still be unlocked is all very attractive for me. After meeting with David, Josh, Tom, and other members of the organization and in talking with my family, this was an opportunity that I couldn’t turn down. I know this organization has a great history of winning and I look forward to getting started to work on leading them back to that level.”

Keefe was dismissed as head coach of the Maple Leafs on May 9 after Toronto was eliminated in the first round of the 2024 Stanley Cup Playoffs. Following a second-round disappointment in 2023, Keefe essentially had to reapply for his job following the changing of general managers from Kyle Dubas to Brad Treliving.

After Treliving elected to bring Keefe back, they signed the coach to a new two-year extension that was to kick in on July 1.

Keefe had the option to sit out for the next two years and collect a paycheck but instead signed a reported four-year deal with New Jersey.

According to TSN's Pierre LeBrun, the Leafs will no longer be on the hook for Keefe's previous contract financially as a result of the new deal.

Why do the Maple Leafs not owe Keefe anything?

The way many of these NHL contracts work is simple. If another team wants to hire an existing staffer who is already under contract and is granted permission, the new team can hire said staffer. The team with an existing contract would pay out only the difference in salary if that staffer took on a job that paid less.

In Keefe's case, his contract not only had more term (four years), which was important in this kind of deal, but, as Lebrun puts it, pays more on an annual basis, leaving Toronto completely off the hook in paying Keefe.

Why does this matter? Doesn't MLSE have boatloads of money?

While Maple Leaf Sports & Entertainment, the parent company that owns the Maple Leafs has the ability to withstand paying out money in redundancy, there is less of an appetite to do that after the club had to pay Mike Babcock over 3.5 years of salary to not work.

Babcock inked a landmark eight-year, $50 million contract to join the Maple Leafs in 2015. He was dismissed in favor of Keefe in November of 2019. Any team interested in in hiring Babcock would have needed permission from the Maple Leafs, and the Leafs would have had to sign off on it. It's believed the club didn't want another team to get Babcock at a discounted rate where they would still be on the hook. It's believed that's why the Columbus Blue Jackets waited until July 1, 2023, the exact day his Toronto contract would expire, to make his hiring at the time official.

why the maple leafs don't owe sheldon keefe any money following his signing with the new jersey devils

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