Now that Vincent Lecavalier, Roberto Luongo and Ilya Bryzgalov have sufficiently caused grief and diverted enough organizational plans, it’s as good a time as any to look at those long, cap-circumventing deals that dove tailed at the end to create an artificially low salary cap hit.
You may remember the ones. Only July 1, 2007, Daniel Briere, a 30-year-old forward coming off a 32-goal, 95-point season with the Buffalo Sabres signed a long-term, eight-year deal with the Philadelphia Flyers that saw him get owed $26-million over the first three years of the deal. Instead of being hit with an $8.7-million cap hit like a normal team, the Flyers were dinged just $6.5-million. In exchange for money up front, the final two years of the deal saw Briere paid just $5-million total, bringing the overall cap hit down by over $2-million.
At the time it was genius, and it wasn’t long before other NHL clubs started using these deals to lock down their lifetime players long-term. While Rick DiPietro’s contract was the first to have an ultra-long term spanning over a decade, Briere’s was the first that exploited an advantage to rich teams buried within the collective bargaining agreement.
According to CapGeek, there are 28 players signed to deals worth more than eight years. Of those 28, eight were signed by players in unrestricted free agency. Of the remaining 20, 12 of those deals were signed by players who would have entered unrestricted free agency on the expiration of the deal they had at the time. As it turns out, general managers and owners are very committed to getting marketable faces on their teams.
I think if you concentrate on the 20 deals that took UFAs off the market, it’s going to be hard to find many that are going to work out for their current teams. It’s not that the landscape has changed under a new collective bargaining agreement: Ryan Getzlaf, Corey Perry and Travis Zajac all signed eight-year deals worth a total of $181-million under the new agreement. It just so happens that eight years is the maximum contract length, as anything longer would apparently be silly. While there’s a lot of talk about the cap benefit recapture penalty, it’s still an advantage in theory to sign players to a back-diving deal, since the cap benefits would be applied in a year with a higher upper limit in general.
It works out to a modest amount of chips.
The problem with long-term contracts has nothing to do with benefit recapture penalties, but it has to do with term length.
Just a rundown of the 20 deals I’m talking about:
|Age during 2013-14 season||Age of best season*||Years left on deal||Money left on deal||Total Years||Total Money|
|Total less buyouts||147||$899,748,625.00||179||$1,162,743,000.00|
* – “best season” determined by highest point totals for forwards, highest save percentage for a goaltender (minimum 50 GP) and highest average time on ice for a defenceman.
I took the figures from Capgeek, and I’m pretty sure I didn’t carry the one in one place or another. If you find anything wrong with the money left on any player, let me know. It may change the figures somewhat, but overall the picture remains the same…
…the NHL isn’t even close to finished with these.
Even for some contracts where marital bliss is assumed, like Henrik Zetterberg, Sidney Crosby or Marian Hossa, there is still a lot of money left to be dished out. If you take out the bought out contracts, by my estimations just 22.6% of the dough that NHL teams has commit to these players has been paid out.
More worrying? On average, the forwards are 5.6 years removed from their highest point campaigns. On average, there are 8.1 years left on their deals. I often like to point out that players generally peak offensively between ages 24 and 27. The average age for the most productive year for the forwards in this group is 24.8.
Essentially, teams have locked down big salary cap hits on players that won’t be productive. I count two 8+ year UFA deals on Stanley Cup-winners: Marian Hossa (2010 and 2012) and Brian Campbell (2010). Three more: Ilya Kovalchuk (2012) Roberto Luongo (2011) Danny Briere (2010) made the finals.
A lot of people will point out that the system helps keep salary cap hits low so the team can add more pieces. To an extent, that’s true, but the teams that are signing these contracts don’t exactly have an advantage in the first two to three years of the deal, since so many teams have gotten in on the act. For Zajac, Perry and Getzlaf, their teams don’t even get the small salary cap advantage since the back-diving deals have been outlawed.
There’s just so much risk on these deals. You’re signing stars long term right around the time they stop being stars and just start becoming veteran players. There was a good post on Driving Play a couple of weeks back that talked about the risk of UFA deals:
There’s not a lot of money available in free agency and it’s thought that the salary cap will go up in future seasons. What can teams offer to outbid one another? Absent a state or province with no income tax or the chance to play for a contender, there’s not much – except years on the contract. It will not be dollars per year that necessarily determine who goes where, it’ll be how many years a team is offering. And indeed, with a rising salary cap, why not take the risk that Mike Ribeiro will be productive at 36? Won’t his cap hit just be the NHL average by the time the contract ends? Isn’t medical science always advancing? So on July 5 when your team appears to have landed a ‘bargain’ compared to years past, make sure to check the number of years on the deal – those July fist-pumps could easily curdle into an endless checking of capgeek’s buyout calculator by the time 2015 rolls around.
Most high-profile free agents from here on out are going to get seven- or eight-year-deals, since there’s always once team that is willing to offer financial security for a big-name.
And I don’t think these deals will prove worthy in the end. There are already issues with six of those deals (the three that were bought out, plus Luongo, Ilya Kovalchuk and Brad Richards) and there are certainly more to come, seeing as six of these deals haven’t even started (depending on when you’re reading this post).
Maybe there are a few of these that will work out. Brian Campbell won a Cup and continues to be a top defenceman, but Chicago was saved from salary cap hell because the Florida Panthers were scrambling to reach the floor in 2011, and Dale Tallon happened to be Campbell’s old general manager. Marian Hossa has won two Cups, so whatever hell the Blackhawks are in three years from today will be worth it. Johan Franzen’s deal is pretty cheap.
Seeing what happened to Bryzgalov and Luongo, is Dean Lombardi not worried for what will happen to Jonathan Quick two years from today? Granted, he’s a couple of years younger than when those two started their deals, but I’d be wary giving any goaltender more than three years no matter how good they are.
These deals just don’t seem like a good idea, in retrospect, and the problems are only just starting.