It’s a new economy

Jonathan Willis
March 19 2013 08:53AM

Photo: Michael Miller/Wikimedia

If new contracts handed out to Anaheim Ducks forwards Ryan Getzlaf (earlier this month) and Corey Perry (last night) are any indication, the economics of signing a star player under the new collective bargaining agreement are going to be significantly different than they were under the old one.

The new order of things is something that is being noticed in the upper echelons of team management, at least if the veteran executive quoted by the Edmonton Journal’s Jim Matheson on Sunday is any indication:

A well-respected, longtime NHL executive, raising his eyebrows at Anaheim giving centre/captain Ryan Getzlaf a whopping $8.25 million a year in a new eight-year deal: “That’s almost as much as Crosby’s getting (on average).” Still not sure why Perry hasn’t just signed the identical $66-million contract. They are tied at the hip, aren’t they? Perry, I hear, goes home to Ontario every year so not married to California like Getzlaf is.

While many speculated that Perry might be interested in spending his seasons a little closer to Ontario, he ultimately did sign a very similar contract to Getzlaf, one worth $69 million, with the Ducks on Monday night.

The question, though is this: why are (admittedly excellent) players like Perry and Getzlaf getting as much per year as Crosby?

The Answer: They Aren’t, Really

While a breakdown of Perry’s deal wasn’t available while I was writing this, a quick comparison of Crosby to Getzlaf shows that there really isn’t much to compare. Over the eight years that Getzlaf is under contract, Crosby is going to earn a little more than $20 million additional dollars than the Ducks’ captain.

After Getzlaf’s contract ends, Crosby still has another year of his deal at $9 million. Only in the summer of 2022 – at the age of 35 – does Crosby’s annual salary drop to $3 million per year.

Despite the similarities in cap hit, Crosby’s deal is better in two highly significant ways for the player: the front-loading means that he’ll out-earn Getzlaf by a sizable margin in the mid-term, and the length of the deal offers him security against injury, something that has real value to any NHL player and especially one with a history of concussion.

But Crosby’s deal is also better for the Pittsburgh Penguins in terms of cap management. The back-diving in later years means that Crosby’s deal is more easily fit under the cap than it would be if it ended after eight years as currently structured (the cap hit would be more than $2 million higher). In later years, when Crosby’s cap hit is higher than his salary, the cap will also presumably be higher (and assuming no major drop-off, Crosby will still be worth the money).

The Ducks can’t negotiate a similar deal with Getzlaf now, though. The new CBA limits the contract term to eight years – it would have been seven for a team other than the Ducks – and variance caps prevent similar back-diving even if it weren’t for the term limits. So the Ducks don’t have the option of getting Getzlaf under the salary cap at a modest cap hit – the cap hit must more accurately reflect what he’s being paid. This is almost certainly going to be the new normal for players in the Getzlaf/Perry range – higher cap hits on (relatively) shorter deals. It’s not that they’re being paid the same as Crosby, it’s just that teams now have more difficulty finessing the cap hit.

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Jonathan Willis is Managing Editor of the Nation Network. He also currently writes for the Edmonton Journal's Cult of Hockey, Grantland, and Hockey Prospectus. His work has appeared at theScore, ESPN and Puck Daddy. He was previously founder and managing editor of Copper & Blue. Contact him at jonathan (dot) willis (at) live (dot) ca.
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#51 Romulus' Apotheosis
March 19 2013, 12:59PM
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DSF wrote:

With Letang and Karlsson both injured, I would think Suter is the odds on favourite to win the Norris.

Parise is 3rd in the league in SOG and in the top 15 in scoring among left wingers. He may not currently be top 5 but he's damn close.

Considering that both Crosby and Malkin have a cap hit $1M higher than both and that Crosby and Malkin would be considered generational players, I would think Suter and Parise are about right where they should be.

Koivu has never been a big scorer (currently 24th among centres) but he is one of the best 2 way players in the game.

at any rate, I think the right marker for this kind of discussion is the Suters, Parises, Koivus, etc. anyway.

the generic nhl team is going to have "top" players. distribution mandates it. very few teams are lucky enough to get their hands on a top 5 player, especially over several seasons and in multiples.

the relevant question is how does a generic team manage 4-6 big contracts without being able to smooth out the cap hits and still employ the mid-range players.

the options of 1) hidden value (the historically undervalued player; the player who "gets hot" at the right time; the player from "nowhere", ie. some other league; the player who takes a "hometown" discount; etc.); 2) ELCs

will only get you so far.

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#52 DSF
March 19 2013, 01:33PM
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Romulus' Apotheosis wrote:

at any rate, I think the right marker for this kind of discussion is the Suters, Parises, Koivus, etc. anyway.

the generic nhl team is going to have "top" players. distribution mandates it. very few teams are lucky enough to get their hands on a top 5 player, especially over several seasons and in multiples.

the relevant question is how does a generic team manage 4-6 big contracts without being able to smooth out the cap hits and still employ the mid-range players.

the options of 1) hidden value (the historically undervalued player; the player who "gets hot" at the right time; the player from "nowhere", ie. some other league; the player who takes a "hometown" discount; etc.); 2) ELCs

will only get you so far.

The new CBA will make the necessity of having a smart GM even more important.

Making a mistake on one of your elite contracts and not being able to find value players will be critical.

Overpay a couple of Horcoffs and you'll be dead meat.

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#53 John Chambers
March 19 2013, 01:54PM
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@Archaeologuy

That's the thing - Perry doesn't have to sacrifice salary, he just has to sacrifice Bobby Ryan as a teammate.

Anyone willing to give Joffrey Lupul $5.5M / year will easily salivate at the opportunity to pay Bobby Ryan at least 6.

The system works!

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#54 Romulus' Apotheosis
March 19 2013, 02:13PM
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DSF wrote:

The new CBA will make the necessity of having a smart GM even more important.

Making a mistake on one of your elite contracts and not being able to find value players will be critical.

Overpay a couple of Horcoffs and you'll be dead meat.

the buyout options are presumably there to even the score and give GMs a mulligan on big contracts.

but definitely the constraints will be felt more keenly.

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#55 remlap
March 19 2013, 02:39PM
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DSF wrote:

With Letang and Karlsson both injured, I would think Suter is the odds on favourite to win the Norris.

Parise is 3rd in the league in SOG and in the top 15 in scoring among left wingers. He may not currently be top 5 but he's damn close.

Considering that both Crosby and Malkin have a cap hit $1M higher than both and that Crosby and Malkin would be considered generational players, I would think Suter and Parise are about right where they should be.

Koivu has never been a big scorer (currently 24th among centres) but he is one of the best 2 way players in the game.

I didn't realize Suter was 2nd in defenseman points right now. That's crazy. You might be right about him being in talks for the Norris.

Same with Parise and Koivu. I'm not arguing that they aren't solid players, or that they aren't valued right where they should be.

The original argument was about the reproducability of the Pittsburgh model. You used the Wild as an example of them reproducing it. There are many teams with players of the caliber of a Suter, a Koivu, and a Parise.

Kronwall, Datsyuk, Zetterberg

Keith, Toews, Kane

Doughty, Kopitar, Brown/Carter

No one else in the league has 2 of the top 5 players. Hell, even 2 of the top 10. At any position.

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#56 DSF
March 19 2013, 02:49PM
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remlap wrote:

I didn't realize Suter was 2nd in defenseman points right now. That's crazy. You might be right about him being in talks for the Norris.

Same with Parise and Koivu. I'm not arguing that they aren't solid players, or that they aren't valued right where they should be.

The original argument was about the reproducability of the Pittsburgh model. You used the Wild as an example of them reproducing it. There are many teams with players of the caliber of a Suter, a Koivu, and a Parise.

Kronwall, Datsyuk, Zetterberg

Keith, Toews, Kane

Doughty, Kopitar, Brown/Carter

No one else in the league has 2 of the top 5 players. Hell, even 2 of the top 10. At any position.

Oh, I agree the actual players Pittsburgh has is a special case but I was talking about the model of playing your top 4-5 players big money and filling in the rest of the roster with cheap but effective players.

That's what will eliminate the "middle class" since GM's now can't offer term, just cash, to top UFA's.

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#57 DieHard
March 19 2013, 03:58PM
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Hayek wrote:

I think the better way to look at this is looking at Getzlaf's stats lately. This is a massive overpay, and he will likely fail to live up to this contract. He is getting older, and moving away from peak production years. With salary cap going down, this makes the deal even worse.

I think fans get too excited about signing a star for any price. Then only years later when these players screw up their cap, or have some average years do they realize what a terrible deal that was made.

Getzlaf will be 35ish at contract end. Iginla is 35 at his contract end (at 7M) and arguably not worth it.

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#58 rickithebear
March 19 2013, 04:42PM
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Since 2007-08 getzlafs 23 year old season At even Strength he played 4646.5 minutes 38G 117A with

Forwards: Perry 88.2% 65G Ryan 49% 38G Kunitz 13.8% 8G Belesky 9.6% 6G Hagman 5.4% 2G this forward group covers 83% of his play.

Defence: Vishnovsky 21.6% 7G S. Niedemeyer 21.1% 3G Lydman 19.8% 9G Fowler 19.5% 2G Whitney 9.6% 1G

Sam Gagner At even Strength he played 3814 minutes 36G 75A with

Forwards: Hemsky 24.6% Penner 20.0% R. Nilsson 19.8% T. Hall 15.3% Paajarvi 13.8% Eberle 13.2% Cogliano 10.5% R. Jones 8.6% Omark 8.0% E. Cole 7.7% P. Osullivan 6.7% Brule 5.3% Belanger 4.9% MAP 4.9% Moreau 4.6%

Getzlaf got 1p more on every 222 minutes 18.5Games with alot better supporting cast.

8.25M and same # of goals as gagner. Set-up centers assist count is dependent on the finnishing ability of there wingers

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#59 remlap
March 19 2013, 04:57PM
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DSF wrote:

Oh, I agree the actual players Pittsburgh has is a special case but I was talking about the model of playing your top 4-5 players big money and filling in the rest of the roster with cheap but effective players.

That's what will eliminate the "middle class" since GM's now can't offer term, just cash, to top UFA's.

Ah ok. I see what you mean now.

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#60 Dog Train
March 19 2013, 05:14PM
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The Ducks couldn't afford to let Perry or Getzlaf go but those cap hits are going to take a major cut out of their salary cap room. It's one thing for Pittsburgh to pay Crosby and Malkin with huge cap hits but Perry and Getzlaf are at least a notch below them. I am glad that they nipped the bogus front-loaded contracts in the bud but, unfortunately, the lucky teams who managed to sneak them in before the latest lockout have set themselves up with a huge advantage.

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#61 FastOil
March 19 2013, 05:33PM
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It's a tough call for GM's with their best players. You want to keep them, but it's risky to sign a guy well into his thirties at big dollars when forwards usually peak in their late twenties.

I suppose there is usually a market for reputation now that contracts aren't generational.

It seems Anaheim will have it's work cut out for it. A lot of their vets who are carrying the load are not going to be around for long or still playing really well, and their youth don't seem to have stepped up yet.

So they'll have the one good offensive line and a good two way line, and a hurting defense?

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#62 geno
March 19 2013, 05:58PM
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he's obviously talking AAV. Perry making 8.625M a year compared to Crosby's 8.7 is pretty close and pretty ridiculous. Perry's great but not worth more than Stamkos' 7.5 or near crosby's 8.7!!

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#63 messy EH!
March 19 2013, 06:09PM
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DSF wrote:

With Letang and Karlsson both injured, I would think Suter is the odds on favourite to win the Norris.

Parise is 3rd in the league in SOG and in the top 15 in scoring among left wingers. He may not currently be top 5 but he's damn close.

Considering that both Crosby and Malkin have a cap hit $1M higher than both and that Crosby and Malkin would be considered generational players, I would think Suter and Parise are about right where they should be.

Koivu has never been a big scorer (currently 24th among centres) but he is one of the best 2 way players in the game.

Ryan Suter G2 A21 P23 -3 Sheldon Souray G5 A5 P10 +19 Francois Beauchemin G4 A14 P18 +19

Not to mention Chara is having a great year. Suter is not the best defenseman in the league he's not even the best in his conference.

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#64 DSF
March 19 2013, 07:00PM
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FastOil wrote:

It's a tough call for GM's with their best players. You want to keep them, but it's risky to sign a guy well into his thirties at big dollars when forwards usually peak in their late twenties.

I suppose there is usually a market for reputation now that contracts aren't generational.

It seems Anaheim will have it's work cut out for it. A lot of their vets who are carrying the load are not going to be around for long or still playing really well, and their youth don't seem to have stepped up yet.

So they'll have the one good offensive line and a good two way line, and a hurting defense?

Anaheim has some tremendous young players coming up as well.

Peter Holland, Emerson Etem, Devante Smyth-Pelly, Patrick Marroon, Sami Vatinen and Hampus Lindholm are all high end prospects.

They're in very good shape.

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#65 DSF
March 19 2013, 07:09PM
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messy EH! wrote:

Ryan Suter G2 A21 P23 -3 Sheldon Souray G5 A5 P10 +19 Francois Beauchemin G4 A14 P18 +19

Not to mention Chara is having a great year. Suter is not the best defenseman in the league he's not even the best in his conference.

Suter leads the league in TOI/G, playing in all situations.

Suter - 27:20

Chara - 24:21

Beauchemin - 23:31

Souray - 21:13

While I agree the other 3 are having fine seasons, Suter is likely more valuable to his team and his performance from game 11 on has been far superior to the others.

Remember he's on a new team and had to learn new systems.

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#67 messy EH!
March 20 2013, 02:39AM
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@DSF

Agreed on Suter having a good season.And if he can keep it up for the rest of the year I believe he'll be in contention. But Sourays 3.6 million cap hit and Francois Beauchemin 3.5 is pretty good value. If only the oilers could find one or two Dman like these....

Oh Yeah Right.

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