By now, the Edmonton Oilers getting slammed for their willingness to pay young players early is a bit of a tradition. It goes back to Brian Burke complaining about the Penner offer sheet and it basically hasn’t stopped since.
The counterargument is that phrase in the title. If Edmonton had signed its kids to the two-year bridge deals which are so popular around the league, Taylor Hall would be one year away from RFA status and three years away from unrestricted free agency.
The latest attack on the Oilers’ system of signing its players comes from the New York Post’s Larry Brooks. I’m not going to go through it line-by-line; suffice to say that we agree on some things (in particular Justin Schultz’s contract being illogical) and disagree on others.
The primary place we disagree is this paragraph:
But for no discernible reason whatsoever, the Oilers under Kevin Lowe’s watch have doled out a flurry of questionable second contracts to players straight out of Entry Level lacking any leverage, including the twin seven-year, $42 million deals with Taylor Hall and Ryan Nugent-Hopkins.
The Oilers can’t actually take credit for the strategy of signing first overall picks to big dollars before the end of their respective entry-level deals. Both the New York Islanders and Chicago Blackhawks did the same with John Tavares and Patrick Kane (in Chicago’s case, Jonathan Toews got the same treatment). There’s a method behind the madness.
The following breaks down how team-friendly each stage of the career of a first overall pick (or any other top prospect to make the team before their age 21 season) is:
- First three years: Entry-level deal, very team-friendly
- Fourth year: RFA without arbitration rights, somewhat team-friendly
- Fifth through seventh years: RFA with arbitration rights, increasingly unfriendly to teams
- Eighth year through end of career: UFA, where teams pay through the nose
Lots of teams believe in what used to be called the “second contract” and what these days is generally referred to as a “bridge deal.” Once the player’s safe entry-level deal is done, this is the point where the team has more leverage than it will ever have again, and so teams often opt to push the player hard to sign a two-year contract. The two-year contract is the rule because it a) eats up a year where the player has arbitration rights and b) still gives the team two years before unrestricted free agency.
Moralists are often inclined to say that the team wants to see a player earn his money. In some cases, a lack of belief in the player is a factor, but many times that’s unadulterated horsepucky. A two-year deal is the sweet spot for a team looking to make every penny it can off a young player without letting him get too close to unrestricted free agency. A one-year deal doesn’t maximize the advantage; a three-year deal gives the player the option of getting a one-year deal in arbitration and then leaving via free agency.
I’m not saying teams are wrong to do this, but I don’t believe in moralizing salary negotiations. It would be nice if people (in the general sense; I’m not critiquing Brooks, who talks a lot about leverage in his piece) admitted that it’s all about teams having the hammer and opting to wield it rather than whining about the impertinence of John A. Youngplayer demanding money before he’s paid his dues.
So if a bridge deal is so great for the team, why have the Oilers (and Islanders and Blackhawks) given it up in so many instances?
Distributing the Load
There’s a simple reason: Teams that pick in the first overall range are bad. This is pretty much true across the board, with the rare exception when some soon-to-be fired executive has traded a lottery pick for a veteran and had his team collapse anyway.
Bad teams all hope and plan to be good teams someday. There’s generally a connection between how good a team is and how much disposable cap space it has; it isn’t a coincidence that the two teams desperately trying to shed dollars before the season starts both have recent championships. So when that bad team lands a guy who is basically a cannot-miss prospect, what’s the logical thing to do? It’s obvious: give him a long-term deal that includes those expensive UFA years.
In the Oilers’ shoes, giving Taylor Hall a two-year bridge deal (at, say, $3.5 million) would have accomplished nothing; the team didn’t lack for cap space. It would have saved a few bucks in the short-term, probably annoyed the player and then been forced to negotiate a new contract this coming summer. Then the team would be forced to come to some sort of arrangement with Hall this coming summer, with Hall having arbitration rights and unrestricted free agency just two years ahead. It would mean a reasonably big payday just as the team hopes to be competing for a playoff spot and more.
If the team managed to get Hall under contract on a five-year deal worth $7.0 million, it would be spending the exact same dollars it did on the seven-year, $42 million contract that Brooks and so many others find objectionable. It would cost the team $1.0 million per year in cap space at a time when that cap space actually matters, and that’s assuming that such a deal were actually possible.
It’s an objectively worse situation for player and team alike. The player deferred getting money to later instead of earlier; the team deferred paying money to when it needs every penny rather than spending it when it had cap space galore. Just for good measure, the relationship between the two parties has potentially been strained by an acrimonious negotiation over a bridge contract and possibly even arbitration once that contract ended. It’s a lose-lose.
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