Did the Oilers make a mistake signing Hall and Eberle to matching cap hits?

Jonathan Willis
September 01 2013 08:51AM

When the Oilers signed young stars Taylor Hall and Jordan Eberle to long-term extensions with matching $6 million/season cap hits, they set a benchmark for their key young players.

Was that an error?

Recent Contracts

The chart above shows long, big-dollar extensions for young forwards with minimal NHL experience signed between 2011 and 2013 and is ordered by points per 82 games at the time of the contract being signed.

Aside from Steven Stamkos – the clear leader of the pack in terms of production – all of the contracts come in at $6.0 million or less, putting Hall and Eberle near the top of the chart in terms of compensation. In fairness, they’re also near the top of the chart in terms of point production – with the caveat that Eberle’s performance came at an older age than most of these players.

The number that stands out is John Tavares’ contract, not just against the Oilers’ stars but also in comparison to the field. Whoever negotiated that contract for the New York Islanders did a nice job knocking that contract down to $5.5 million per season.

The Problem

The trouble for the Oilers is that they aren’t signing one or even two star forwards – they’re signing four of them. And by signing Hall and Eberle to $6.0 million contracts, they’ve made it very difficult to extend Ryan Nugent-Hopkins (who is at the same point in his entry-level deal as Hall and Eberle were when they were extended) or Nail Yakupov to a deal at less than that $6.0 million.

Imagining that chart above without Hall and Eberle, what kind of extension would Nugent-Hopkins be looking at? Six years, somewhere between $5.5 and $5.75 million maybe, falling right between Tavares and Skinner? Nugent-Hopkins’ agent might point to Matt Duchene, but Duchene agreed to a two-year bridge contract before he got his big-money extension.

In hindsight, there’s an argument to be made that Hall and Eberle are slightly overpaid relative to their peers. We aren’t talking major dollars, but Hall’s performance is in that same Tavares/Skinner range and Eberle is both older than these other players and was less highly-regarded in his draft year. The word hindsight is used because that’s what this is – it’s worth remembering the labour uncertainty when Hall and Eberle signed their extensions.

But if we imagine Eberle and Hall signing at around Skinner dollars – say Hall at $5.7 million and Eberle at $5.8 million – that’s $500,000 in cap space per year over the next six seasons. If we further imagine that Nugent-Hopkins and Yakupov ended up signing extensions south of $6.0 million, we might be looking at $1.0 million in cap space being saved every year for the next six to seven seasons. That kind of space can help a smart general manager a lot, or compensate for overpaying a player like Eric Belanger or Ben Eager.

Ifs And Buts

There is a lot of projection and imagining and 20/20 hindsight in a piece like this, which is one of the reasons the idea has sat on a notepad for a few months rather than being developed. But I eventually chose to write it up because I think the primary point is valid. Establishing a benchmark for the Oilers’ young stars would have been a positive if the benchmark was lower than the league payment for these kinds of players. Instead it now looks like the Oilers are paying more than the standard going rate.

Because there are four (five, if one includes Justin Schultz, though I’ve excluded him because I think he falls into a different category) of these contracts to do, and because they’re all long-term deals, even a small overpay is magnified.

It’s going to be interesting to see what the Oilers do with Nugent-Hopkins. At this point, a new general manager might make the case that he isn’t bound by a benchmark set by his predecessor, and that Nugent-Hopkins deal (particularly given his low totals in 2013) should look more like Landeskog’s, or Tavares’, or Skinner’s than it does Eberle’s or Hall’s.

Recently around the Nation Network

At Canucks Army, Thomas Drance concludes the site's countdown of Vancouver's top prospects with their pick for the team's best - Brendan Gaunce. There's a lot to like about Gaunce, but there are also concerns about his ceiling:

Gaunce is probably the safest bet among Canucks prospects to emerge as an NHL regular. He's also probably the third most likely player on this list to see NHL action this upcoming season (behind only Corrado and perhaps Eddie Lack). The harder question to answer when it comes to Gaunce's development, in my view, is whether or not he has the offensive upside to project as a top-six forward at the NHL level.

Click the link above to read more, or check out some of my recent stuff:

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Jonathan Willis is a freelance writer. He currently works for Oilers Nation, the Edmonton Journal and Bleacher Report. He's co-written three books and worked for myriad websites, including Grantland, ESPN, The Score, and Hockey Prospectus. He was previously the founder and managing editor of Copper & Blue.
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#51 THRNHJE
September 01 2013, 06:52PM
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@Marc

Sloppy Joe wrote: After two seasons in the NHL, Eberle's numbers were better than Hall in every measurable way - goals, assists, points and points per game, +/- - Eberle was better in all of them. Because of the CBA, he also earned less than Hall, despite being more productive (and that's not even including the fact that Hall got to start his ELC a year earlier instead of earning nothing in jr for his draft +1 year).

There is absolutely no way that Eberle could have been signed to a contract at that point that was less valuable than one offered to Hall. They either get the same deal, or Eberle gets slightly more - but a scenario in which Eberle signed for less than Hall after 2 seasons simply wasn't a possibility.

They could have waited until this offseason to start negotiating of course, and might have saved a bit of money on Eberle as his shooting percentage fell. But I suspect any such savings would have been eaten up (and more) by the extra cash that Hall could have asked for in season when he was the second best LW in the entire league.

I agree with all of this, and Eberle's shooting percentage fell to the 12% range which is where elite shooters percentages are,and he had his broken hand during that time. Eberle beats hall in points by about a ppg for each game more than Hall he has in the chart. I personally think locking up two potential superstars for longterm knowing they will be worth way more later was incredibly smart. Great contracts for both of them imo.

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#52 fastoil
September 01 2013, 07:11PM
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Bushed wrote:

The Blackhawks managed to restock their roster after losing players to higher contract offers from other teams, and even won a second cup in a few years' time.

MacT will likewise have to make moves and decisions to build this team. If Hemsky is traded or resigns for less, there's a few extra dollars. Cap goes up, a few more. Trade Schultz, more room. The trick is to fill holes with value signings (like the Hawks did, and as madjam points out above). It's a moving target, but that's part of the GM's job.

If a skill contract has to be moved, Gagner might be the first to be considered, rather than Eberle, but we'll see who performs better moving forward.

Remember Gagner is a centre, a bit short on those at the moment. I don't prefer him to Eberle, but Gagner plays RW as well and Ebs doesn't play C.

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#53 Supernova
September 01 2013, 07:42PM
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As a management team if your sure that the players are difference makers you don't want a bridge contract. You only want a bridge deal if you are unsure.

Zero issue with future cap space as well.

Hall $6 Ebs $6 RNH ~$6 Yak ~$6 JS ~$5

Under 30 million for a stellar core, every team would take that. If you don't have the cap space to fill out that roster you are either an idiot or you acquired a Weber type contract. By the time Yak's contract would kick in the cap will be mid 70's.

40 million to fill out the roster is ample space, especially if you don't over pay on 4th liners

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#54 toprightcorner
September 01 2013, 08:00PM
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Salaries for star players have even increased since Hall and Eberle signed their contracts. A bridge contract for 2 years likely would have ended up pushing the following contracts to 8+ million, look at Perry, Getzlaf, Giroux and Parise. Sure, it would have been great to have them at $5.75 or even $5.5 but they would have likely been at less term.

For the next 7 years, we probably are best off with the contract we have then a bridge and then a new contract.

5+5+5+8.5+8.5+8.5+8.5 = $49 mill 6 x 7 + $42 mill

$7 million potentially saved during the same term which ultimately can be used to make a stronger team for the last 4 years of the contract than the first 3 years, which is more likely the time when the Oilers could contend for a cup.

If Yak and Nuge meet expectations and cost $5.5 - $6 mill I think the Oilers will be in good shape, especially with cap space projected to increase by $10 mill in the next couple years.

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#55 Serious Gord
September 01 2013, 10:34PM
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As Jonathon has ably demonstrated the two contracts are on the high end of average (or is it the mean? - or both?)

It is not these contracts oil fans should be concerned about - nor likely should we worry about RNH and Yak or Shultz - the anticipated growth in cap space should take care of that.

What needs to be understood however is that these contracts have set an end date on the oilers making a run for the cup at six years. For if all of these five stars live up even to modest expectations it will be the contracts after their first ones signed as veterans that will be very problematic indeed. Simply put there likely won't be near enough room for all of them when Hall negotiates his next one.

And as it's likely to be done prior to his RFA year we really only have five years.

As it looks like MacT is not going to make the changes this year to get into the playoffs we are down to four playoff years to hit the jackpot before the team atomizes.

From that perspective it would seem that a historically error-prone management group has very little room for error.

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#56 Impartial Oilers Fan
September 02 2013, 12:17AM
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Can someone give me solid reasoning as to why Taylor Hall's point total and specifically this point/game pace is being used a baseline, rather than what it was, simply a very good season?

Taylor Halls had a 94.3% IPP last season. This is off the charts for any star player in the NHL. Crosby had a 80.9% last season, Ovechkin had a 73%. And furthermore, for reference sake, Hall had a 75.6% the year previously.

Hall obviously received more lucky assists than he can predictably project to get in future seasons. Yet everyone keeps talking about how his point per game was one of the best in the NHL last year, and because of that (SKEWED) fact, he should be a lock for the Olympic team?? Really?

That doesn't even bare in mind that there will be centre's playing on the wing for Team Canada.

I'm an Oilers fan and I don't understand how the Oil Country's consistent role in encouraging entitlement, ESPECIALLY of Hall and Yakupov.

What does it hurt to have Hall earn a spot on Team Canada, rather than bitch and complain that he wasn't a lock?! Especially, since its been constantly stated by Team Canada brass, that they want skills guys but not at the expense of good defensive play. If you believe Hall is always making good decisions with and without the puck, you obviously didn't see Hall's play at the World Championships without Oiler rose coloured glasses on.

Bottom line, let him earn a spot on Team Canada rather than some claim he's a lock after a short season, where he got more points while he was on the ice than will likely be sustainable.

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#57 Supernova
September 02 2013, 06:01AM
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Serious Gord wrote:

As Jonathon has ably demonstrated the two contracts are on the high end of average (or is it the mean? - or both?)

It is not these contracts oil fans should be concerned about - nor likely should we worry about RNH and Yak or Shultz - the anticipated growth in cap space should take care of that.

What needs to be understood however is that these contracts have set an end date on the oilers making a run for the cup at six years. For if all of these five stars live up even to modest expectations it will be the contracts after their first ones signed as veterans that will be very problematic indeed. Simply put there likely won't be near enough room for all of them when Hall negotiates his next one.

And as it's likely to be done prior to his RFA year we really only have five years.

As it looks like MacT is not going to make the changes this year to get into the playoffs we are down to four playoff years to hit the jackpot before the team atomizes.

From that perspective it would seem that a historically error-prone management group has very little room for error.

So whatis your critique then?

That management should have went a longer term?

Or shorter?

You make it sound like they have screwed up so much it doesn't matter, whatever they choose is wrong because of their history.

If they aren't winning by then we should atomize the roster. If they are winning that cures a lot of things.

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#58 Serious Gord
September 02 2013, 09:36AM
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Supernova wrote:

So whatis your critique then?

That management should have went a longer term?

Or shorter?

You make it sound like they have screwed up so much it doesn't matter, whatever they choose is wrong because of their history.

If they aren't winning by then we should atomize the roster. If they are winning that cures a lot of things.

Neither regarding term.

We have a poverty of riches regarding young offensive talent. And it is likely going to cause problems and heartache in the future.

Those problems could be greatly mitigated in the short term if some of the lesser offensive talent had been dealt in the past couple of years - hemsky a couple of years ago; gagner before the work stoppage for example. Had that been done the team today would be more balanced and on a strong playoff footing much sooner.

But those moves were not made and three very bad coaching hires - Quinn, Rennie and Krueger means we have virginal coaching as well.

MacT has largely continued in tambellini's lack of boldness - hemsky is still here (!) making predictable and 3/4 line and backup moves. The team is still a long way from being playoff ready.

Edmonton is still in anguish over the sale of Gretzky. Angst and sorrow likely await again. Except it could be much more bitter if there are no cup rings as consolation.

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#59 Supernova
September 02 2013, 10:02AM
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@Serious Gord

I honestly don't know what any of what you wrote has to do with Hall and Eberle's contract.

Sure there has been plenty of mistakes, but I disagree the city is in Anguish over Gretzky. probably half the Oilers fan base has never even seen him play in a Oiler Jersey.

Give MacT a full season for change, he has already turned over a fairly large chunk of the 50 man contract list. Sounds like your angst is about Lowe and Tambo.

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#60 Dangiltiis
September 02 2013, 01:50PM
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@ Jonathan Willis

"Hall’s performance is in that same Tavares/Skinner range"

Are you just looking at Skinner's best season only for comparison?

No way I would compare Tavares and Hall to Skinner, they are different beings. From what I recall about Skinner, he does much better against easier competition and may not drive his line nearly as well as the other 2. I would argue that Skinner and Eberle are much better comparisons, in terms of production, style of play, etc.

I think Hall's is a bargain, and that extra year of UFA that they bought for Hall is valuable even by comparison to Tavares.

Eberle's could have been down by 0.25-0.5 per year and it would have made me happy, as it would have outlined Hall is the best and set his alone as the upper limit.

Good agents won't care what either got, however, and will use the best comparables they can come contract negotiation. We'll see what MacT is made of in a year or 2 when it comes down to brass tax but his early negotiations have been encouraging (save for Ference).

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#61 Bill
September 03 2013, 12:39PM
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@Serious Gord

"We have a poverty of riches regarding young offensive talent. And it is likely going to cause problems and heartache in the future."

I think you meant 'embarrassment of riches', and assets are never a problem if they're managed properly. I don't think these core contracts are going to be an issue cap-wise. The debate in the future may ensue when one of these young forwards is moved in favor of a big piece on the back end or in the crease, in an attempt to even the talent level on the team, which is currently weighted to the top 6 forwards.

Finally, regarding the Gretzky deal....I'm not in Edmonton, but know a lot of rabid fans there and elsewhere....and I don't know of ANYONE who's spending a moment of concern over something that happened 25 years ago.....yeesh! Maybe you do, Gord, but the rest of the world has moved on.

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