Kin
New member
So one of the things that's come up a lot this offseason is the issue of contract term and, in particular, what sort of term various players "deserve" based on the level of their play. This was probably best seen in the reactions to the Clarkson deal(too long! He's not that good!) and the rumour going around that Tyler Bozak's representatives had proposed an 8 year extension("Who does he think he is, harumph, harumph"). There are a few points I want to make in this regard that I think should be taken into account when people sign contracts going forward:
-If you artificially limit a market's high end, it does not affect the entire market, just the high end
If we look at contract term as being a sort of currency, along with the actual currency in question, there seems to be this belief that whatever the maximum is given to the best players should still be higher than the ones lesser players receive. So if Crosby gets the maximum 8 years, Bozak should get 4 or 5 at most.
That's not true. The way a marketplace works is that you'll see that sort of distribution if there are no artificial limits on what Sidney Crosby can negotiate for himself. We saw this pre-lockout. The top players in the world could command 13 or 14 year contracts whereas for the most part lesser lights were limited to deals of 8 or 10 years at most.
Look no further for evidence of this than basketball. Basketball has a 4 year limit for most free agents(teams can give one or two of players on their team five). Dwight Howard, probably the most sought after free agent since Lebron, signed a four year contract. Carl Landry, a bench player for the Golden State Warriors signed...a four year contract. The limit on Dwight Howard's ability to negotiate for himself what he could if the market were free doesn't affect Carl Landry's ability to do the same.
So if someone like Clarkson could negotiate a 7 year contract for himself before the lockout, he'll be able to post-lockout. That does not mean he's seen as an elite player.
(This is true for salary too. Lebron James, who some people have speculated could get a 75 million dollar per year contract on a completely open market, doesn't make all that much more per year than someone like Josh Smith. Capping the high end does just that. We haven't seen much of that in hockey but that's because of the difference between the NBA's soft-ish cap and the NHL's hard cap. If a player of the ability of, say, Toews ever hit the open market determined only to maximize his dollar amount I'm betting we'd see him sign for close to the maximum allowable)
- The reason contracts longer than the current max were done away with is not because they were "bad"
14 and 15 year deals are risky. That's true. But risk isn't the same as being bad. If they were, if contracts that long were definitively seen as being so risky that it outweighed the gain of having a top player on your team, then team's would have stopped offering them.
The argument being made during the lockout was that there was pressure on teams to sign those deals and that pressure led teams to sign deals they otherwise wouldn't but that pressure is a market force like any other. A smart business person would factor it in to their decision.
And the reality is that while we may think that some of these contracts have blown up in teams faces the reality is that most of the super long contracts that right now that people would say didn't work out for the teams signing them didn't work out not because the players signed to them stopped being good, it's that the players signed to them became less valuable to their teams(Luongo), got injured(DiPietro) or clashed with their coach(Brad Richards). Now, it's absolutely fair to say those are situations where the risk of these deals backfired but there's a big difference between losing at roulette and the wheel being rigged.
Point being, nothing that happened with the contracts that the new CBA was designed to avoid that has changed the desire or willingness to sign them. This speaks to that first point, the cap on contract term has created a barrier that the demand for them is pushing against, it hasn't re-sized everything to proportion.
-The downside of long-term contracts is readily apparent and used as a cautionary example, the upside is never attributed to the contracts themselves.
Quick. Ken Holland, Stan Bowman, Dean Lombardi, Ray Shero. What do they have in common? 4 of the 5 last cup winning GM's? Yup. Guys on their team signed to 10+ year deals? That too.
Now, it's safe to say that those guys are pretty good GMs. Ken Holland is, along with Lou Lamoriello, probably the guy who gets cited the most as being the best in the business. Was he just as susceptible to the pressure these "bad" deals created?
Let's look at it another way. We can all see the results when contracts go bad. The Leafs have two buy-outs on their books, the Canucks couldn't do anything on Friday because they're pressed against the cap, the Blackhawks had to lose a lot of good players because a bunch of them got big raises too soon....but we don't readily attribute the benefits of low contracts in the same way. Right now the Blackhawks are paying 10.8 million dollars per year in cap dollars to Duncan Keith and Marian Hossa. I think it's safe to say, looking at what happened on Friday, that if both players were on the open market it would cost the team at least 14 million to retain both of them. That's the difference between fitting Bryan Bickell or Hjarlmasson under the cap or not. That's a huge advantage to them.
And the reality is that if the salary cap continues to grow that savings grows every year. So long as those players play reasonably well, and Friday taught us that some pretty questionable players can get some pretty high cap hits, the benefits of these long term deals grow and grow.
I mean it's fairly simple stuff. Right now people are talking about Nazem Kadri getting 3-4 million when he signs. But I'm guessing we can all agree that, at that price, we'd want him to sign for as long as possible. If you're a fan of his you probably think that every year added to that deal at that rate increases it value.
So when a player like Tyler Bozak puts in a request for a 8 year contract he's proposing something that, theoretically, has benefit to both sides. Maybe not enough for it to get done, and it didn't, but it's not an act of hubris. He's proposing, because I'm sure in Tyler Bozak's mind he's going to get better, to sacrifice some future earning for security. A lot of players are going to do that because I get the sense that hockey players, generally, are a pretty conservative bunch.
-The point?
I guess it's a lot of words to write without really having one. But it definitely seems to me as though there's been a lot of surprise and shock around that "the CBA didn't stop GMs from being crazy" and I just never understood why it ever would. The deals aren't as bad as we think, their benefits never get noticed and, without wanting to stray into the realm of public policy, if there's one thing the Drug War should teach us is that if there's demand for something bad, attacking the supply is not effective in curbing bad behaviour.
So, yeah, if you're someone who thought lesser players would only be getting 4 or 5 years when the best players were getting 7 and 8...you're going to not like a lot of contracts moving forward.
-If you artificially limit a market's high end, it does not affect the entire market, just the high end
If we look at contract term as being a sort of currency, along with the actual currency in question, there seems to be this belief that whatever the maximum is given to the best players should still be higher than the ones lesser players receive. So if Crosby gets the maximum 8 years, Bozak should get 4 or 5 at most.
That's not true. The way a marketplace works is that you'll see that sort of distribution if there are no artificial limits on what Sidney Crosby can negotiate for himself. We saw this pre-lockout. The top players in the world could command 13 or 14 year contracts whereas for the most part lesser lights were limited to deals of 8 or 10 years at most.
Look no further for evidence of this than basketball. Basketball has a 4 year limit for most free agents(teams can give one or two of players on their team five). Dwight Howard, probably the most sought after free agent since Lebron, signed a four year contract. Carl Landry, a bench player for the Golden State Warriors signed...a four year contract. The limit on Dwight Howard's ability to negotiate for himself what he could if the market were free doesn't affect Carl Landry's ability to do the same.
So if someone like Clarkson could negotiate a 7 year contract for himself before the lockout, he'll be able to post-lockout. That does not mean he's seen as an elite player.
(This is true for salary too. Lebron James, who some people have speculated could get a 75 million dollar per year contract on a completely open market, doesn't make all that much more per year than someone like Josh Smith. Capping the high end does just that. We haven't seen much of that in hockey but that's because of the difference between the NBA's soft-ish cap and the NHL's hard cap. If a player of the ability of, say, Toews ever hit the open market determined only to maximize his dollar amount I'm betting we'd see him sign for close to the maximum allowable)
- The reason contracts longer than the current max were done away with is not because they were "bad"
14 and 15 year deals are risky. That's true. But risk isn't the same as being bad. If they were, if contracts that long were definitively seen as being so risky that it outweighed the gain of having a top player on your team, then team's would have stopped offering them.
The argument being made during the lockout was that there was pressure on teams to sign those deals and that pressure led teams to sign deals they otherwise wouldn't but that pressure is a market force like any other. A smart business person would factor it in to their decision.
And the reality is that while we may think that some of these contracts have blown up in teams faces the reality is that most of the super long contracts that right now that people would say didn't work out for the teams signing them didn't work out not because the players signed to them stopped being good, it's that the players signed to them became less valuable to their teams(Luongo), got injured(DiPietro) or clashed with their coach(Brad Richards). Now, it's absolutely fair to say those are situations where the risk of these deals backfired but there's a big difference between losing at roulette and the wheel being rigged.
Point being, nothing that happened with the contracts that the new CBA was designed to avoid that has changed the desire or willingness to sign them. This speaks to that first point, the cap on contract term has created a barrier that the demand for them is pushing against, it hasn't re-sized everything to proportion.
-The downside of long-term contracts is readily apparent and used as a cautionary example, the upside is never attributed to the contracts themselves.
Quick. Ken Holland, Stan Bowman, Dean Lombardi, Ray Shero. What do they have in common? 4 of the 5 last cup winning GM's? Yup. Guys on their team signed to 10+ year deals? That too.
Now, it's safe to say that those guys are pretty good GMs. Ken Holland is, along with Lou Lamoriello, probably the guy who gets cited the most as being the best in the business. Was he just as susceptible to the pressure these "bad" deals created?
Let's look at it another way. We can all see the results when contracts go bad. The Leafs have two buy-outs on their books, the Canucks couldn't do anything on Friday because they're pressed against the cap, the Blackhawks had to lose a lot of good players because a bunch of them got big raises too soon....but we don't readily attribute the benefits of low contracts in the same way. Right now the Blackhawks are paying 10.8 million dollars per year in cap dollars to Duncan Keith and Marian Hossa. I think it's safe to say, looking at what happened on Friday, that if both players were on the open market it would cost the team at least 14 million to retain both of them. That's the difference between fitting Bryan Bickell or Hjarlmasson under the cap or not. That's a huge advantage to them.
And the reality is that if the salary cap continues to grow that savings grows every year. So long as those players play reasonably well, and Friday taught us that some pretty questionable players can get some pretty high cap hits, the benefits of these long term deals grow and grow.
I mean it's fairly simple stuff. Right now people are talking about Nazem Kadri getting 3-4 million when he signs. But I'm guessing we can all agree that, at that price, we'd want him to sign for as long as possible. If you're a fan of his you probably think that every year added to that deal at that rate increases it value.
So when a player like Tyler Bozak puts in a request for a 8 year contract he's proposing something that, theoretically, has benefit to both sides. Maybe not enough for it to get done, and it didn't, but it's not an act of hubris. He's proposing, because I'm sure in Tyler Bozak's mind he's going to get better, to sacrifice some future earning for security. A lot of players are going to do that because I get the sense that hockey players, generally, are a pretty conservative bunch.
-The point?
I guess it's a lot of words to write without really having one. But it definitely seems to me as though there's been a lot of surprise and shock around that "the CBA didn't stop GMs from being crazy" and I just never understood why it ever would. The deals aren't as bad as we think, their benefits never get noticed and, without wanting to stray into the realm of public policy, if there's one thing the Drug War should teach us is that if there's demand for something bad, attacking the supply is not effective in curbing bad behaviour.
So, yeah, if you're someone who thought lesser players would only be getting 4 or 5 years when the best players were getting 7 and 8...you're going to not like a lot of contracts moving forward.