A few days ago, I was able to put my baby daughter to bed early enough to join a close friend in seeing Mark Knopfler and Bob Dylan in concert. Having enjoyed the music of both men for many years without having had the pleasure of seeing either on stage, I was imaginably excited.
While Knopfler was thrilling, displaying for everyone in attendance his native virtuosity on the guitar, seamlessly switching from genre to genre with nothing less than perfection in any, Dylan disappointed. Perhaps one of America's greatest songwriters of the last 60 years, today, the Minnesotan bard could only croak along with his otherwise solid blues-based backing band.
You may rightly be asking yourself at this time what a concert review of two aging musicians has to do with hockey, or with statistical analysis. And the answer to that is nothing. The only reason I am beginning here is because I happened to watch this concert from the upper bowl at the Air Canada Centre, better known to most readers here as the home of the locked-out Toronto Maple Leafs.
While the labor-front news currently making the rounds was a suggestion put forth by Gary Bettman for the league and the NHLPA to take a two-week respite from the negotiation-table, NHL arenas are largely silent, the echoing emptiness broken only for unrelated musical interludes and the occasional visit from the big team's AHL club, such as the recent Hamilton-Syracuse tilt in Montreal that resulted in a hole the size of a loonie in the skull of Blake Geoffrion. Fair enough, some hockey teams share a venue with the local NBA team, as well. Still, we are faced with the dread of 41 nights of emptiness where there should have been life, excitement, thrills, and icy artistry.
The bargaining break thankfully cut short in less than one week, fans should still be disheartened to realize that the two sides seem no closer to a resolution today than they did when the owners closed the gates on September 15, more than two months ago.
On the positive side, we can see that both sides have accepted that the Hockey Related Revenue split will have to meet in the middle, with the ratio of 50:50 having already appeared in the both sets of proposals. Looking at the cons, we see that the league and the union have seemingly done nothing to bridge the monumental gap that exists in the matter of contract rights. As predicted in this space even before the lockout had officially begun, the dollar issue may prove to be a small matter next to the contractual control stipulations demanded by the owners. To recap the contractual issues, in no particular order, they are:
Placing a cap on contract length at five years;
Eliminating signing bonuses while placing a limit on salary difference at no more than 5% in either direction from one year to the next, thus more closely tying cap hit with salary and doing away with the frequent attempts for teams to front load long-term deals*;
Extending entry-level contracts from three to five years;
Pushing unrestricted free agency back from the current seven years to ten years, or to a player's age-28 season.
*Note that the first two issues both represent systematic methods of avoiding future Ilya Kovalchuk and Roberto Luongo type situations. Which is doubly noteworthy as Kovalchuk has been among the most vocal Russian players during the current impasse in expressing his willingness to remain in Russia if the terms of the new CBA pact are not to his liking.
As mentioned before, these issues are of the nature that will mostly affect the NHL middle class. In the economic environment of the NHL during the past CBA, the salary cap placed a premium on young, cost-controlled talent. The more players a team had at under $1 million per annum, the more cap room would be remaining for high-end veteran talent. What the new contract items sought by the league will do is increase the pool of players fitting that description by up to 40%. Even with the expected lowered cap (many suggesting a future cap that would come in around $15 million below that of the 2011-12 season), more players with cap hits of $1 million or less would be required to leave adequate space for the pricier luxury players. That change will not affect the superstars, either those already under contract, or those with deals set to expire. Even with greater spending restrictions in place, few are the GMs who would not sacrifice a wily veteran for their third line in order to make it easier on the budget to sign a former 50-goal scoring Hart Trophy winner like Corey Perry.
It is easy to understand why the league would push for such structural changes to the sport. Preventing contractual freedom would further yoke the players into their system with no chance of elective escape. While the peak age of players today is generally thought to be around 24, especially for forwards, having them become free agents after seven years, as they do now, would place the top players in the 25-26 age bracket for their first taste of professional freedom. While perhaps no longer at their absolute peak, those players are still solidly enough in their prime that it is reasonable to expect them to maintain a similar level of production for a several more years yet. In that sense, teams are forced into a risk-averse position. Pay prime dollars for prime production, or possibly lose some of the best years of a player's career after nurturing them through the inevitable growing pains. It is (or has been) easier to pay up than to walk away from a long-tenured apprenticeship with nothing.
By pushing that freedom back by three years, the free agents would now be that much further away from their best performance level. In other words, they will be much more likely to be showing signs of decline when their contracts expire, giving them significantly less leverage with which to negotiate a new deal, either with their original team or with a new suitor. Think for a moment to the new contracts signed this past offseason. The two biggest contracts were the twin deals signed by 27-year-old Ryan Suter and 28-year-old Zach Parise with Minnesota, both for 13 years and $98 million. Age 27 to 28 would seem to be a reasonable age for a player who apprenticed in the lower levels for a few years before reaching, and starring in, the NHL. While neither Parise nor Suter had truly equivalent talent available in an older age bracket, we can look at Dennis Wideman, a fine defenseman who reached free agency over the summer at the age of 29. More of an offensive blueliner than the all-around force that is Suter, Wideman was nonetheless a desirable commodity. However, entering the free agency water at age 29, the risk of giving him a monster contract was heightened measurably; he signed with the Calgary Flames for five years and $26.25 million. Of course, Suter is a better player than Wideman. VUKOTA sees a difference approaching 2 GVT between the two for the upcoming season. Perhaps that explains the per-season value difference between the two. That aside, the age gap has given Suter vastly enhanced bargaining leverage than Wideman. We should be able to attribute a great deal of his new contract length to his more desirable age.
Of course, we, being critical thinkers, should not take this solitary example as constituting a statistical trend. So let's also examine the cases of defensemen John Carlson and Erik Karlsson. VUKOTA sees Carlson as being on the cusp of providing value somewhere smack in the middle between Suter and Wideman while scouts have been lauding his game for years; Corey Pronman slotted him in at number 25 in his recent look at the best NHLers under the age of 23. Karlsson, who came in at number seven on that same list, is an absolute VUKOTA darling, with his 16.2 GVT projection the best amongst defensemen and in the top 10 among all skaters. Both Karlsson and Carlson, as 22 year olds, would have been under contractual control by their respective clubs for several years yet, however both organizations wanted to better formalize the connection. The two, much like Suter, signed for 13 years and $69.3 million to remain with their organizations. Before we ask ourselves whether Suter picked up an extra $29 million due to his longer track record, I should point out that the figures cited for the two younger defensemen are combined. The Norris Trophy winning Karlsson signed for seven years and $45.5 million, while Carlson signed for six years and $23.8 million. In essence, the years signed for were mostly years already owned by their respective teams. In exchange for a higher rate of pay, each young blueliner sacrificed a few years of free agency. Money now is greater than money later, after all.
Were either player an unrestricted free agent, their signing prices would have been significantly higher. Karlsson would have dwarfed Suter, instead of earning $1 million less annually, while Carlson would likely have been in line for double his new deal, as his expected production over the next five years should far outstrip that of the veteran Wideman. Of course, if the league succeeds in pushing back the UFA rights by three years, there would have been no reason for either the Senators or the Capitals to commit so much so soon to their young charges. They would be able to go year-to-year with each, at minimal risk of losing future production for either. And also remember that Karlsson and Carlson are being paid for what their organizations expect them to produce, while the contracts signed by Suter and Wideman more closely resemble the outlay for production already delivered to their previous teams.
Make no mistake that the current contract rules proposed by the NHL stand to tear the pockets from out of the pants of most young and old players skating today, and into the future. Of each of the rules mentioned above, the only one that addresses the league's concerns about front-loaded, cap-circumventing contracts without drastically reducing the potential earnings of the players is the 5% fluctuation proposal. Keeping salaries on a relatively even keel throughout the duration of a given contract should prevent some of the sillier decade-plus deals that have been common in each offseason since the last work stoppage. Perhaps, as a means to spur continued conversation, the union should indicate a willingness to accept that provision. The others should be fought with as much passion and relentlessness as was ever committed by any pair of dropped-glove combatants in an NHL arena. But for the concerts and third-rate entertainment options otherwise presently available, those arenas are now dark. For them to light up again, the players who have worked so hard to entertain us will need to see that their efforts have a reasonable chance of paying off.
Ryan Wagman is an author of Hockey Prospectus.
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