Thursday, August 25, 2005

The Big Gamble

Well, free agency has proven to be the exact opposite of what I thought it would be. With the cap, there's less differential in the amount teams can bid for a player so other things factor in like possible teammates, being on a contender and even, sadly for the Oilers, weather and travel. But the biggest incentive for free agents seems to be securing a long-term contract and making the most of their current value for uncertain years ahead.

From what I've read, teams are charged the average yearly amount of their contracts over its length, so GMs can't load the front end of player contracts, and that just means they're stuck with what they sign. Plus, bonuses are included against the cap. I assumed that with so much uncertainty that GMs wouldn't be dumb enough to offer star money to player past 2-3 years. Who's to say that Martin St. Louis will score more than 20 goals in five years? Something tells me he'll slow down by then. Same with Hejduk. What about Modano? He's cheaper than the rest but at what point will be a drag on the team? 2005? 2007? And is Gonchar going to get better in his later 30s? I don't think so. I won't even mention Hatcher.

I'm curious to see what some teams will be like in five years. How much of a fan favourite will some of these players like Hatcher or Hejduk be then? It seems like the new CBA was created entirely to put blame on the players, first for being the cause of the lockout (at least in the average fan's mind), second for when they don't take a further paycut to stay on a team that can't pay them (Wade Redden, Brad Richards), and eventually, for just plain sucking and taking up salary cap room. I don't think people will remember who designed this thing.

Anyway, to me it seems like a huge gamble every year. All it takes is one superstar suffering some late-season big knee injury and in effect he's not just lost for the season, he's also taking 2-3 decent players with him in terms of cap space, especially if he's overpaid.

Maybe the GMs know something I don't. It's quite possible that the players will get the last laugh. Maybe if OLN kicks starts a hockey renaissance with Americans and revenues go up, the salary cap will rise and it won't be a big deal. But until then...

Martin St. Louis Six years $5.25-million a year

Milan Hejduk five years $3.9-million a season

Vincent Lecavalier four years $27.5-million
Rick Nash five years $27
Mike Modano five years 17.2 million
Segei Gonchar five years $25 million

Mike Rathje five years $3.5 million
Derian Hatcher four years $14 million

of course, Chris Pronger five years $31.5 million


Powerage said...

Here's an interesting thought, a team like TO Maple Leafs took in, let's estimate $100 million last hockey season, and will again.
This year they are forbidden from paying more than $39 million.
If they spend an extra $11 million every year buying out contracts, what's that to them? $50 million in profit, or twice the profit they made under the old system.
"Rich" teams can build in buy-out budget.

That's one consideration.

It's also important to think about an on-ice team rather than an rotisserie league team.
There are some obvious head scrathers, but Nash, St. Louis, Lecavalier are all young stars signed to longterm contracts

Mike Modano will still be a $3m player in three years with two years left. Plus he is Mr. Dallas.
Pronger is going to be 37 when his contract expires. But that might be the price of getting a star now.

BTW - Kiprusoff's contract is back-ended ($10 million over three years. This year $2.9m then almost $4m in the final year).

-- Randy

Dave (Berry) said...

I agree with you for the most part, Mike, but injuries actually aren't a huge factor in the new cap, at least not big-time, long-term/season-ending injuries.

From, "Clubs at or near the upper limit that have players who incur a bona fide long-term (minimum 10 games and 24 days) injury will be entitled to replace up to the full value of the injured player's NHL salary (even if such salary would result in the club's team salary exceeding the upper limit). The 'replacement salary' will not count against the club's upper limit but will count against the League-wide players' share. Upon return of the injured player, the team must come into immediate compliance with the requirements of the payroll range."

Basically, you're allowed to replace an injured player's salary until he returns, so you could, theoretically, go and pick yourself up that first-line winger you lost (especially if the replacement is going to be a FA next year), and not worry about it for a while. And, of course, if it's a career-ending injury, you're never going to have to worry about that player's salary again, so really, major injuries shouldn't be too much of a factor in signing decisions (this seems like a pretty fair move on the CBA's part, in so much as you can never really tell when a 40-game type injury will come along, whereas there are just some players with a history of getting frequently injured for short stretches, so it's punishing stupidity, not just bad luck).

That said, of course, there's still a myriad of other reasons not to sign long-term contracts, as you point out.

Now, uh, slash fiction anyone?

mike w said...

>but injuries actually aren't a huge factor in the new cap, at least not big-time, long-term/season-ending injuries

Fair point and thanks for the reminder. Moreover, with my point with injuries I had in mind the Peca situation with his bum knee. If a player sustains a big injury (in my example, a knee injury), he may never be the same, but his salary will be. It's risky to look sign five years ahead. I mean, Owen Nolan was pretty good five years ago, wasn't he? But from what I gather, I think all of us and other Oilers fans are somewhat wary of Lowe pulling another Glen Sather and blowing the bank. He hasn't quite done that yet.


>"Rich" teams can build in buy-out budget.

The buyout we saw this season was a one-time deal under the new CBA.

>Kiprusoff's contract is back-ended ($10 million over three years. This year $2.9m then almost $4m in the final year).

There's still some confusion about contracts in the new CBA. But all contracts, with bonuses, will in a given year be counted against the cap by the average yearly amount of the overall contract. (Pronger is $6 million every year, not $10 mill one year and $2 mill in his last)

>It's also important to think about an on-ice team rather than an rotisserie league team.

This is true. Hockey ain't baseball, and there's a bunch of intangibles that can't be quantified in hockey. If Modano's overpaid, he may still be worth more than two low-rent rookies with no experience or leadership. As you know, I'm wary of leadership in the Big L sense but I think it exists. An elderly Modano in the locker room between overtimes in a Game 7 playoff might be worth having.

She got the Jack! said...

Quite embarrasingly, I may have been quick on the draw with my buyout theory.
That's what you get for the two-minute late-for-work post.
My truimphant return to the blog has been foiled -- I'll get you yet perfect CBA and slash you to ribbons if it's the last thing I do!

As for Mike's original point: Knee injuries are knee injuries, same as always. You can put all you eggs in one basket or not, but the fact is a superstar is a superstar, and if you can get one, insure his knees. This is overall still a game of chance.

As for the extended lengths of some contracts, the market has been driven by the same guys for ten years and they're going for the biggest chunk of cash (no matter the length of the deal) and siding with security over the open market.

As for the GMs' thinking, well, Modana, Rathje, and Gonchar, still have powerful selling points, and if you want them right now, a long-term contract seals the deal.

Stupid people exist in business; that's how business exists.

If you want to play it too safe, we'll see you next year during age-restriction Free-agent bonanza, but the hand-wringing on display in a hockey-town like Edmonton makes me think that this year is a big one.


Side note: this dude ( usually has powerfully good, clear, concise points. All this despite the fact that he is most assuredly a loser in real life.

ciscoblog said...

Gambling Commission under the old regulatory regime, applications have progressed to full hearings while the fortitude of these Online Casinos Extreme
commissions and licenses are all but operational; some of these are thought to be dormant and others under construction. Concern at the spate of applications and imposed a cut-off date of April next year for submissions under the old legislation.