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, Sportsnet, 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 Marc
September 01 2013, 10:49AM
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Sloppy Joe wrote:

The Hall contract is brilliant, and one of the few bright spots from the Tambellini regime, IMO. This contract will keep looking better and better as Hall continues his "supernova" trajectory (to steal a phrase from Lowetide).

The Eberle contract is less brilliant - my understanding is that they signed him a year before they had to (correct me if I'm wrong), and on the tail end of his "crazy high shooting percentage" season. Hindsight is 20/20, however, so we shouldn't have too much sand in our collective panties over this one. Six million might be a little high for he player at this point in time, but I think we can be pretty confident about the cap increasing quite substantially over the term of the CBA (the owners can't help themselves), and the number will look better/more acceptable with each passing year.

As for Nuge and Yak, I think MacT might get some traction negotiating on the basis that the $6 million figure was Tambellini's benchmark, and there is a new world order with the new GM. Having said that, I won't be too upset if both get signed long term for 6 million - I am confident that both will end up covering that bet.

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.

If you like the Hall contract then you have to accept the Eberle contract as a necessary part of it. There is no way the Hall contract could have been done without giving Eberle at least as much.

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#52 WhattaMike
September 01 2013, 11:57AM
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IMO, without involving skills, there are/were far worse deals out there...which hurt teams...such as those with Suter, Parise, Weber, Kovalchuk, etc.

Without overpaying the bottom six (which teams do a lot of)...Hall, Ebs, RNH, and Yak will all be affordable because of (a) Hemsky, Smyth, N. Schultz, etc, will be gone very soon...(b) the extra players who will be let go or traded (Potter, Larsen, Grebeshkov, etc) ...(C) the cap space always rises every year (and significantly I might add too).

This team is on the cusp on coming back to the elite side of the NHL and every one of these four kids is showing they deserve to be paid around the same mark average as like those seen above. They score, they try, they are each exciting to watch and that is the main reason fans pay the high ticket prices. I rather would pay these kids and watch the Oilers than that of Minnesota every night, or Dallas, or New Jersey, or Phoenix, etc.

A half million here or there at this time is not going to hurt the Oilers if they spend wisely on the bottom six and because of the rising salry cap.

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#53 michael
September 01 2013, 12:49PM
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Bushed wrote:

Yes, MacT has his work cut out for himself.

But nowhere did I say the Oilers were the Blackhawks, only that like the Hawks, MacT would have to re-shuffle his roster using value contracts "to build this team".

I do hope that in a few years the Oilers will compare favorably to the current Hawks lineup, but not there yet...

MacT is well on his way to reshaping and building this team in a manner that they will remain competitive for years to come. He ris himself this off season of 10 players? from last years squad. Lots of deadwood was chopped. How can you go wrong dumping Ryan Whitney,Bulin and Belanger. Talk about anchors.

We'll see more change this year as the season moves forward. By seasons end I bet we'll see at least 2-3 more changes. Especially if the Oilers are close or in the post season.

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#54 Rama Lama
September 01 2013, 02:54PM
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I think that there is an underlying assumption that since they are all either first rounders or high first rounders.........sign them now before they peak and command really high dollars like Sid.

There is some logic to this as the cap will significantly go higher in the next few years, salaries will rise, and we do not want these guys testing the free market any time soon.

I can see logic on both sides, but I'm glad that they will be signed to roughly the same dollars...........sure beats trading them for money, or watching our best talent leaving the city.

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#55 pkam
September 01 2013, 03:06PM
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If I am RNH's agent, I would argue that we should use contracts that signed this year instead of contracts that signed years ago as reference.

So comparable contracts would be Landeskog and more so with Seguin because he is a center. RNH is one year younger and has a 25% better stats in pts per 82, and RNH's contract will start one year later, which the salary cap will be higher, so is it unreasonable to get 250K more than Seguin?

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#56 Pouzar99
September 01 2013, 03:44PM
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I would say the Hall and Eberle contracts created a ceiling more than a benchmark. By which I mean that if Yak has slightly better numbers than Hall and Eberle had when they signed and the cap has gone up he will still only get $6 million long term. As for Nuge, I have great confidence in him, but if he does not establish himself at the same level, how can be expect $6 million? Which is not to say I don't think he is at the same level, only that ultimately performance will tell the tale.

The only true outlier in the chart is the Taveres contract, which is a super bargain. If anything, I would be more nervous with the Skinner, Seguin and Kane deals as likely overpays. The key is revenue growth and the cap. If last season is any indicator it will be back to $70 million this year and higher after that. If so the Eberle and Hall deals will be better than good.

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#57 uks ya
September 01 2013, 05:36PM
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beloch wrote:

You should probably compare more than just counting stats. For example, Tavares has significantly better possession stats than Hall or Eberle, although he's a bit more sheltered than either of them.

What the Oilers desperately need are some players who drive play into the offensive zone against top competition. Hall and Eberle are great once they're there, but they're equally horrible in their own end! If the Oilers had a second line that could drive play forward they could deploy Hall and Eberle in a similar manner to how Vancouver uses the Sedins. i.e. Lots of shelter!

I know this is a tall order to fill. The Oilers may have to trade an offensive weapon to get a quality two-way forward. One thing is for sure though. The Oilers are not going to be contenders with possession like they had last season! The only team as bad as the Oilers that made the playoffs was the Leafs, and it took a PDO miracle for them to sneak in!

Hemsky and 2nd or 3rd rounder to NSH for Legwand?

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#58 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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#59 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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#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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