July 10, 2011
The debate on long-term contracts in the NHL is a front-burning issue after July 1, and will remain so through the next CBA negotiation.
It's a fascinating debate, because it involves so many conflicts within hockey: Team vs. team on the practice of front-loaded deals; the projection of a players' worth in his twilight years vs. how those years count against the salary cap; the NHLPA vs. the NHL on the term and structure of standard player contracts.
Larry Brooks of the New York Post believes it's a debate the NHL was desirous to see heated up this summer:
Anyone who thinks this week caught the NHL by surprise is kidding himself or herself. This is what the league wanted to use as evidence that the system is hopelessly broken and tilted in favor of the big markets — the system, of course, that Bettman, counsel Bob Batterman and the Board invented and painted as a utopia the last time around.
As far as what the next financial structure of the NHL might look like, Brooks writes:
Next time, the NHL is going to introduce the ultimate one-size-fits-all cap. Percentage of the gross will be dramatically reduced. The midpoint will essentially become the cap, with the ceiling and floor separated by perhaps $4M-$6M. Deviations of salary within a contract will be kept to a minimum. The cap charge will be defined by the average of the three-to-five highest salaried seasons. Contracts will be kept to a minimum of five-to-seven years.
There is general, philosophical agreement among the NHL and the fans that these front-loaded deals are a salary cap cheat, and that there should be a better way to calculate their impact on the team's salary cap than having a few "minimum wage" years at the end bring it down. The Ilya Kovalchuk amendment was a good start. But the means to that ultimate end, however, are at issue.
When it comes to contract term, specifically, the NHLPA should dig its heels in for a fight.
The NHL has gone after long-term contracts before, having sought a cap of three years on SPCs in the 2005 lockout. But not all long-term contracts in the NHL are sneaky attempts to circumvent the salary cap.
Via Cap Geek, there are 10 NHL players with contracts of 10-years-or-greater: Alex Ovechkin(notes), Christian Ehrhoff(notes), Vincent Lecavalier(notes), Duncan Keith(notes), Marian Hossa(notes), Henrik Zetterberg(notes), Roberto Luongo(notes), Nicklas Backstrom(notes), Mike Richards(notes) and Ilya Kovalchuk(notes).
Ovechkin, Richards, Backstrom and Keith ($1.5 million in his final season) are the only players that don't have years at $1 million built into their contracts.
Frequently, we're reading the "front-loaded" modifier in differentiating the sort of 10-year deal Christian Ehrhoff signed with the Buffalo Sabres, which includes three seasons at the end worth $1 million each; and Alex Ovechkin's 13-year deal with the Washington Capitals, which will pay him $10 million of base salary in its last season, when Ovechkin is 35 years old.
There are times when Ovechkin's contract has been lumped in with other more demonized deals, like that of Ilya Kovalchuk and the New Jersey Devils. The similarities end at term; Ovechkin's isn't front-loaded at all, and the cap hit reflects the salary he'll carry for that contract's duration without theorizing how much less a 35-year-old Ovechkin might earn in 2020 than a 30-year-old Ovechkin earned in 2015.
Ehrhoff's deal and Ovechkin's deal are both investments in a player by their teams. The difference of course is that Ovechkin was drafted, developed, coached, managed and marketed by the Washington Capitals for three years before he signed that $124 million contract for 13 seasons as a 22 year old. The hockey renaissance in Washington D.C. happened for several reasons, but the ability of the team to market Ovechkin was a primary one.
Is there a legitimate reason why a team like the Capitals shouldn't be able to invest in Ovechkin for more than seven years, as long as there aren't any large deviations in salary like these front-loaded shell games?
(Good read by Mirtle on Stamkos, Doughty and offer sheets, by the way.)
The only one that springs to mind is the dispersal of talent in the NHL marketplace; that it's better for the NHL to have a Steven Stamkos or an Alex Ovechkin available as an unrestricted free agent for another struggling team to sign, and better for the NHLPA because his open-market money will drive up other salaries.
Yet the counterargument is also compelling: Stability and star-power can keep a market like Tampa Bay or Washington viable.
Investing in young players that a team drafts and develops is different than committing 10 years to a free agent. Maybe that's where the line is drawn: Allow teams to retain their own talent, limit their ability to go long-term with someone else's?
Whatever the solution to the long-term contract question is, it should not include a provision that bans decade-long deals that carry a realistic (read: not one dramatically manipulated by salary fluctuation) salary cap hit. The NHL has no business trying to tell a team how long it can invest in its assets. If someone wants to go DiPietro with their goalie, it's their choice and their consequences.
Of course, sometimes those consequences involve making a problem disappear in the AHL or in Europe. But that's another CBA debate …