Saturday, November 1st, 2014

Frenzy Notes

7

Its been an interesting week. I don’t think any of it was nearly as surprising as the hockey media made it out to be. The caterwauling about the amount of cash teams committed to players over the next ten years was predictable even though the money had to be spent. The players have to get 57% of the revenues.

Its ridiculous to suggest that the “foolish” deals are evidence that the NHL needs a new collective agreement. The players generate a great deal of revenue and whatever the system, they will be paid enormous sums of money.

I don’t think I will ever understand why we resent athletes for their fortunes while we don’t seem to care what movie stars make. The money doled out to the Wall Street clowns who shuffle paper for a living doesn’t seem to bother very many, even after the paper they shuffled all but destroyed the American and European economies.

I don’t get it.

Other thoughts:

1) Christian Erhoff is a good player and I’m sorry to see him go. I wish him luck, but I expect he will have problems living up to his contract. He has good speed and a great shot, but he was in a perfect situation for his skills in Vancouver. Erhoff did not make the Canuck power play work – the Sedins do – and his strengths were a perfect fit in the Vancouver system. He may play every bit as well in Buffalo without getting anywhere near the same results.

2) I wish we had seen the last of the dubious “tails” to contracts. Erhoff will probably end up getting paid more than $4 MM a year. Brad Richards is making $10 MM a season, not the $6.5 MM average value. Not only is it blatant cap manipulation, it has also had the unintended consequence of creating super long contracts and a perpetually thin free agent class.

The Canucks will have to make a trade to open the season with a $64 MM payroll. It isn’t that they don’t want to spend the money – its that there isn’t anything in the market worth buying. Now may the best time to unload Hodgson or Schneider and actually get someone in exchange because – for a change – they can swallow the salary a good player earns.

3) Even though they lost the Brad Richards sweepstakes, I think the Toronto Maple Leafs did very well in the past week. The Tim Connolly signing is a good gamble and the trade with Nashville is a real winner even if Lombardi never plays again. (Full disclosure: Lombardi is one of my favourite players. If he does recover, the Leafs – and Leaf fans – will be very happy with him.)

The trade also says something about hard it is to be David Poile. He can’t afford to have a player earning $3.5 MM out indefinitely. He was willing to give up Franson – a good young defenseman – to get rid of the contract. The Leafs can easily afford to take risks on less than healthy talent and Burke certainly isn’t shy about exploiting his team’s financial advantage.

(I find myself in the absurd position of almost, nearly hoping the Leafs do well. I’ve gotten locked into this position when I mocked the Leaf media for ridiculous criticisms of Brian Burke. If Burke does not do well, the ridiculous criticisms are validated even though they are no less ridiculous. I can’t help but hope that I will be proven right, which means…)

4) Heatley for Havlat? I don’t really see the point of the deal from either side. Both teams are getting rid of a player they regret acquiring.

5) I have not been kind to Dale Tallon over the years and nothing I’ve seen in Florida changes my mind about him. How far ahead does the guy think? Wasn’t he dumping salary at the trade deadline?

6) Note to Mike Gillis: Would you give Jannik Hansen a decent contract and dump the arbitration case? Please.

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Comments

7 Responses to “Frenzy Notes”
  1. Magicpie says:

    2) I wish we had seen the last of the dubious “tails” to contracts. Erhoff will probably end up getting paid more than $4 MM a year. Brad Richards is making $10 MM a season, not the $6.5 MM average value. Not only is it blatant cap manipulation, it has also had the unintended consequence of creating super long contracts and a perpetually thin free agent class.

    Potential Solution: The cap hit for a contract until is a player is 35 gets averaged the same way it does now, while the cap hit for each year after is equal to the actual salary. Under this rule, for instance, Ehrhoff’s contract would have a 5.2 Mil cap hit until he’s 35, and a 1 million hit for the last 3 years.

    A team asking a player to take less money in the last years of a deal to bring down cap value would be asking a player to give up productive years when they could be getting paid anyway, so they’d be much less likely to agree to something like this . This would go a lot further than the half-measures they have in place now towards solving the problem

    The “cap hit equals actual salary” thing for players over 35 would admittedly be open to some abuse, but on the whole a lot less than is going on as things stand now.

  2. ColinM says:

    I don’t know that fans resent Brad Richards for his salary but I think it’s finally starting to in that some teams can offer Brad Richards the contract the Rangers did and other teams can not. Even with Escrow not everyone can make a commitment to $64 million.

    I hope in the next CBA they have much tighter parameters in the upper and lower limits of what a contract could be paid out. However I doubt the next CBA will be about whether the players get 57% of league revenue or 54% of league revenue.

    • Tom says:

      I don’t know that fans resent Brad Richards for his salary but I think it’s finally starting to in that some teams can offer Brad Richards the contract the Rangers did and other teams can not. Even with Escrow not everyone can make a commitment to $64 million.

      I didn’t really understand this post, Colin.

      It was obvious to me from the beginning that the best players were going to be driven to the best markets. I think most people know everyone can’t commit to $64 MM. In the first two years of the agreement, the cap was set way too low and everyone could reach it. Thereafter the cap zoomed and with every increase a few teams stopped trying to spend to it. The CBA was designed this way. Some would spend to the cap, some would spend to the floor, the average would be the midpoint, also the point that reflected the player share of the revenue.

      The escrow payout provisions are not intended to help teams spend to the cap. They are intended to reward teams that spend below the midpoint, right down to the floor. As I’ve said before, the 2005 CBA gave the big markets clear advantages and a better chance to ice a good team. The CBA gave teams like Florida money.

      If Florida spends to the floor, they get a payment of $8 MM off the top of the escrow fund. And once the owners get around to dividing up the escrow Florida draws 1/30 of the total even though the contracts they paid out were far less than 1/30 of the total.

      If the cap was knocked back $5 MM, the Panthers could spend $5 MM less, but there would be no escrow to divide up. No escrow, no $8 MM. The Panthers would prefer the higher cap and a big escrow account.

      I hope in the next CBA they have much tighter parameters in the upper and lower limits of what a contract could be paid out.

      I’m not sure what you mean here, probably because I don’t understand the problem.

      However I doubt the next CBA will be about whether the players get 57% of league revenue or 54% of league revenue.

      I think this will be the only important issue. It is the only way to float this boat. The big markets are booming with revenues. The gap between big and small keeps growing. The answer is to cut the player share to reduce the cap or at least slow the growth. Part of the money taken from the players goes for bigger profits in the big markets and part of it goes to higher subsidies to the smaller ones.

      This is the only position that can unite the owners. Can you think of another one?

  3. ColinM says:

    “It was obvious to me from the beginning that the best players were going to be driven to the best markets.”

    Ah but it wasn’t obvious to everyone. Before the current CBA everyone called for Salary Cap to level the playing field because the Rangers and Flyers spend too much. At first in this CBA it looked like that problem had been solved. Five years later the Rangers and Flyers can now use their resources to buy a player where as some others could not. Although there won’t be a groundswell to go back to the old CBA of highly restricted free agency, some will want a return to 2006, where the cap was so low that everyone would meet it.

    • Tom says:

      Ah but it wasn’t obvious to everyone. Before the current CBA everyone called for Salary Cap to level the playing field because the Rangers and Flyers spend too much.

      Yes, but this is the way the lockout was marketed. It was not the reality. Gary Bettman said it was necessary to level the playing field. This was very disingenuous because the field was already level. Small markets were protected by a very restricted free agency and payroll disparities meant almost nothing.

      The league pretended there was a competitive balance problem in order to get a CBA designed to boost the fortunes of the Hawks, Kings, Flyers, Bruins and Rangers. With the salary cap and early free agency they got the appearance of fairness and winning teams in the big markets.

      At first in this CBA it looked like that problem had been solved.

      This was an illusion. Saskin and Bettman deliberately set the cap too low to create this appearance. If they had set the cap in the right place from day one, it would have been about $46 MM. Fans would not have swallowed that, so…

      Five years later the Rangers and Flyers can now use their resources to buy a player where as some others could not.

      True. I’m sure some fans are focussed on this, but the league is not. The league’s position is that everyone has a chance because all teams spend within a narrow range. The league insists that there has never been parity like we have today. When challenged, they will point out that under the old CBA, the Rangers spent three or four times what a small market spent. What’s a $16 MM spread compared to that?

      Although there won’t be a groundswell to go back to the old CBA of highly restricted free agency, some will want a return to 2006, where the cap was so low that everyone would meet it.

      Yeah, well, I don’t think they are going to get it. Even if the league wanted it – and I don’t think they do – its impossible to drive salaries down that low. They’d have to reduce the player share to 40% to get to a $48 MM cap.

  4. ColinM says:

    “When challenged, they will point out that under the old CBA, the Rangers spent three or four times what a small market spent. What’s a $16 MM spread compared to that?”

    I don’t know if they are going to be able to keep this up though. For many “better than before” will still be “not good enough”. What does the NHL Spin machine do then other than pay token lip service? That will only take them so far?

    • Tom says:

      I don’t know if they are going to be able to keep this up though. For many “better than before” will still be “not good enough”. What does the NHL Spin machine do then other than pay token lip service? That will only take them so far?

      Token lip service will take them all the way to the bank. Is it a big issue in MLB? There are plenty of teams that have almost no chance to win. But add the revenue sharing money to the national TV money and a loser in MLB can make money. I’m sure the fans of these teams get frustrated, but what can they do? The NHL is pretty certain they can manage public opinion.

      I don’t think their argument next time will be about competitive balance. It is going to start with “Neither the NBA or the NFL can afford 57% of the revenues going to the players. How on earth can we?”

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