Extend the Kids? Maybe Later

With the news of Jeff Skinner’s contract extension (covered nicely here by Robin Brownlee), the focus of Oilers Nation has turned toward offering contract extensions to Jordan Eberle and Taylor Hall. Should the team extend both of those players this summer, or wait a little longer before getting serious about the possibility?

My vote: there’s no harm in a little patience.

Naturally, the desire to get both players under contract now is understandable. The whole point of the Oilers ugly sojourn through the NHL basement has been to collect high-end talent, and letting that high-end talent leave town before it has even really begun paying dividends would ruin the whole thing. It makes a lot of sense that many Oilers fans would like to see both players locked up, and the sooner the better.


There’s a new collective bargaining agreement on the horizon, one all but guaranteed to drive down the NHL’s salary cap. The last time around, the NHLPA agreed to a roll-back of player salaries, meaning that guys signed before the new deal were affordable. This time around, it seems likely that the union will accept a lower salary cap, but they have been adamant that a salary roll-back is not on the table. Donald Fehr has called the idea of a rollback a “non-starter” and when asked back in May about the possibility responded, “Do you want me out of this job?”

It stood out because Fehr’s public comments have largely been conciliatory.

A new deal won’t necessarily include a salary rollback. There are a number of ways around it – a limited amnesty clause, recalculating the cap hit on contracts signed before the new deal (while still paying the players full money), a cap that drops gradually over time rather than immediately following, etc. The point is that a rollback is not a certainty, and if it doesn’t come these deals signed under the old agreement are not going to be anywhere near as favourable financially as deals inked under whatever new deal is eventually hammered out.

There are other considerations. Jordan Eberle is coming off a fantastic season – a season that many (including myself) argue he probably won’t repeat. Even people more bullish on Eberle – Robin Brownlee and David Staples – expect him to drop below the 70 point mark next season. Of course, it doesn’t matter what anyone outside of the Oilers’ front office thinks, but if the Oilers peg Eberle’s chances of producing the same amount of points or fewer at greater than 50%, they could reason that the odds of having better leverage in contract discussions will be better in January or next summer than they are now.

There’s also the question of Taylor Hall’s off-season surgery. The Oilers hope is that Hall will be ready to go for the start of 2012-13, but it’s not clear that’s going to happen. Even if it does, he’s going to be entering into the season recovering from a major injury. The calculations here are much the same as they are in the case of Eberle: do the Oilers believe they have more leverage in negotiations now, or will they have more come January?

The new CBA is the biggest issue in deciding on the timing of new contracts, but it’s far from the only one. In the Oilers’ shoes, I think it makes sense to touch base with the agents for both players but try to hold off until midway through next season before really getting serious about finalizing a deal.

  • NewfoundlandOil

    If the CBA weren’t expiring this fall, I’d think it would be a hands-down yes to extending them now. I think players typically leave $ on the table when they sign early (think maybe John Tavares would have got more than $5.5Mx6 if he waited til this summer? Or that Braydon Coburn would have got more if he went to UFA rather than re-up mid season?)

    Of course, the new CBA is the wildcard here, and no one knows exactly what the cards hold here. By signing them now, do you end up paying for UFA yrs that end up actually becoming RFA yrs (if owners get their way & bump the age for UFA back)? Not sure what the smart play is here.

    • The Oilers presumably have a better idea of where negotiations are at than we do; if they see the cap dropping significantly or RFA years increasing, one would imagine that they would be more inclined to wait before extending these players.

      On the other hand, Carolina presumably has the same sort of information.

      • While your points make sense on the surface, I think, in this instance, patience can do harm. Sure it’s easy to say that Eberle probably won’t have a repeat of last year. But it’s also a gamble to assume you know the trajectory of Eberle’s production.

        You seem to think that the salary cap going down is almost a guarantee, and your points seem to support it. But why did Carolina sign Semin for 7 mil and Skinner for 5.7? Are they completely in the dark as to how the CBA negotiations are going?

        If history has taught us anything, it’s that the price for players like Eberle and Hall almost always goes up for the first 12 years of their career. The more ST waits, the more the price for Eberle and Hall will increase.

        Sure you could gamble on the Cap decreasing. You could gamble on Hall and Eberle having worse seasons than last year as well.

        OR, you could use the info you have and make the offer based on facts, instead of just waiting to see how it plays out.

        Eberle is at .81 ppg and hall is at .75 ppg. … I think. They both already have some injury history and neither one has helped the team make any sort of real push for the playoffs.

        If they want to win, then throw the 5.5-6 mil per year at them now, avoid any risk of an offer sheet, and be happy that you made the decision based on what you know, not on what you think may happen.

        If hall and Eberle have great seasons next year then you’ve made hte right choice. If they both regress slightly, then you haven’t really overpaid at 5.5 million.. yet.

        Just do it.

        • DieHard

          “Eberle is at .81 ppg and hall is at .75 ppg. … I think. They both already have some injury history and neither one has helped the team make any sort of real push for the playoffs.”

          I really hate this talk of “injury history” when talking about such young players. If I was to join in then I’d say Carolina may have made a mistake with the known injury history of Skinner.

        • In Semin’s case, the answer is because he was getting either term or money, and the low-risk decision was to sign him to money.

          As for Skinner, Carolina’s in a different position than Edmonton. They don’t have a bunch of young guys coming off ELC’s – the Staal brothers and Ruutu are the forward core now and they’re all inked long-term. They can afford to risk paying a little extra for Skinner.

          Edmonton has two more big post-ELC contracts coming up. Financial flexibility is more important for them.

          Also – given that both Hall and Eberle are scoring more than Skinner at this point in their NHL careers, their agents would be silly to take a deal worth $5.5 million right now. Skinner just signed for $5.725 – both Hall and Eberle should be looking north of $6 million.

  • FMS

    I haven’t followed the exact content of the initial proposals, but I know there had been some discussion of modifying the age at which players become eligible for unrestricted free agency. That adds a significant degree of uncertainty to the negotiations. Right now when discussing the term of an extension, you’re not really sure whether the contract you sign will leave you with RFA years, or if you’re taking a player right to unrestricted free agency (never a good thing). I would also assume knowing whether you’re buying UFA years from a player would have to have some effect on the price point.

    Just another factor that I think suggests waiting is the best approach

  • OB1 Team Yakopov - F.S.T.N.F

    Both signing them now and wating until next year present risks.

    The risk of signing now is that they get overpaid by a couple 100k to maybe a million dollars. (assuming we are working around a framework of Skinners deal)

    The risk of waiting is that you potentially don’t get a deal done and end up losing them for some crappy draft picks.

    …. I know which risk I’d rather take.

  • KleptoKlown

    The flip side about waiting until next year is obviously an offer sheet from other teams. Putting that aside, and assuming both Hall and Eberle have regressive seasons, this may put the Oilers in a stronger negotiating point. However, an extended contract coming off a “less than expected” season would probably only be for 1 or 2 years.

    I don’t see Hall or Eberle’s agents endorsing signing 5+ year extensions based off the worst possible numbers you could expect to see from these kids.

    Skinner’s contract is going to be the starting point for Hall and Ebs (Maybe Tavares will be the floor, but the difference is only like 250k)

    Waiting until next year puts the contracts at 6 million or 8% of the maximum cap payroll.

    The actual dollars doesn’t really matter. It’s all about what percentage of the cap these players take.

      • OB1 Team Yakopov - F.S.T.N.F

        Alot can change between then and now.

        (including a crazy, small sample size hot streak)

        If you have the opportunity to sign them now (assuming they actaully do) doesn’t mean you’ll still have the opportunity 8 months from now.

        • It’s true; it’s not a no-risk proposition that I’m making. I think, on balance, the best way to balance the various risks is to table signing the players for now and re-visit the idea after the new CBA comes out.

          But I definitely understand why some would see signing those players now as the best approach.

          • OB1 Team Yakopov - F.S.T.N.F

            Ya that’s fair we obviously can’t make a deffinitive call because of the changing parameters (CBA + next years production)

            I guess my question is, how much do we really expect to save by waiting until next year (assuming he could be re-uped for say 6 million right now)?

            Even the most pessimistic don’t see Eberle dropping lower then 50 points, 50 – 55 point RFA’s have been signing for 4+ million, and none of them have a 76 point season on the resume to point to in negotiations like Ebs does.

            Realistically, if he goes say 24 goals, 58 points next year, he’s still getting between 4.5 and 5 million per…. If he has a really poor year he’d probably only go short term like Duchene so he could redeem himself…. Then who knows what his price would be.

            On top of that, I’d say it’s just as likely that Hall goes 40G 85P next year as it is that Ebs drops under 60 points… At that level I can see Hall looking for 7+ per.

            First line players aren’t cheap, the league now has 50+ forwards with a cap hit above 5 million… If we’ve got a chance to lock up 2 first liners in their early 20’s for 12 million id take my chances and do it rather then risk it for MAYBE a 1.5 million savings, that could easily be offset by Halls increased salary demands after a big year.

            Seems like alot of risk to me, to potentially save 1 – 1.5 million on the cap.

  • OB1 Team Yakopov - F.S.T.N.F

    Remember when you play with fire you can get burnt . Expect offer sheets if you wait another year as these two maybe the biggest targets . Why not a 7 year $49 million contract for each of them with movement clause at Oilers discression . Start at 5mil & end at 8mil . That keeps them here for 8 years. With Mr Katz’s approved plan of 5+ years before seeing Stanley back here we are covered.

  • DieHard

    I think the “offer sheet” process may be affected by the new CBA as well. Small market/revenue teams will need some kind of protection from the super rich owners willing to use their financial powers.

  • vetinari

    I’m against delaying negotiations with Hall and Ebs for one reason: uncertainty creates opportunity, and if used right, could lock down two pieces of this team for the next 5 to 10 years.

  • John Chambers

    I’ve read quite a bit from the stats-guys and their reasoning for Eberle’s production dropping off. It does make some sense BUT I know that when see Eberle have time to get a shot on net, I’m surprised if he doesn’t score, or at least make the goalie move to make a good save. So many shots nowadays just hit the goalie. Eberle has some of these, but not very many.

    He reminds me of a Mike Bossy or Brett Hull. Not so much in shot velocity. More like where he shoots the puck. I tend to agree with Brownlee that Ebs may get the best offensive humbers of the 3.

    Sign him now.

    • John Chambers

      The ELC has to terminate. Teams can extend their players with 1 year or less remaining in the existing contract, meaning Tavares’ deal doesn’t begin until the upcoming season while Skinner’s new contract doesn’t start until the ’13-’14 Season.

      Another reason to wait – what if the player has a major injury or concussion problems this year?

      • Wanyes bastard child

        Thanks John, I know cableguys friend Mr. Google would have told me the answer but at the time I thought of the question I didn’t have the time to look it up eh. I knew someone on here could answer it for me 🙂

  • OB1 Team Yakopov - F.S.T.N.F

    I think there are some important questions:

    1) What are the most likely changes under the new CBA? Jon is suggesting that a rollback is unlikely but that a salary cap decrease is likely. I can’t argue one way or another but it’s important to consider.

    2) After the last CBA change, what were contracts like? Based entirely on my memory, the owners went one whole summer (the very first) spending responsibly and then prices went right back up. IE Pronger got 5 X 6.25 one summer but Chara was getting near cap maximum the next. These were different circumstances but if there was a likelihood of reduced prices immediately following the CBA negotiation I’d definitely suggest waiting.

    3) Do you think Hall/Eberle’s boxcars will go up or down? Like it or not, context doesn’t seem to play into salary #’s for these types of players. My opinion is that Hall will score more than last year and Eberle less. Does this mean a better deal waiting or not? Maybe there is safety in assuring 100% recovery from shoulder surgery.

    Anyhow, these are the things I’m thinking about. I’d be curious to see what your impressions are Jon, or what anybody has to say/add.