Last season, as the lockout severely curtailed the time usually reserved for meaningless preseason games and overdrawn restricted free agent (RFA) contract squabbles, the first puck dropped with three significant young talents not yet having agreed to terms with their respective teams. The first domino to fall was the Stars' dynamic young forward Jamie Benn. His three-year entry-level contract having expired, the two sides eventually agreed to contractual security/cost certainty in the form of the five-year deal worth $26.3 million. Benn only sat out four games before coming to terms.
Four days later, P.K. Subban and the Montreal Canadiens agreed to terms on a pillow contract, a two-year pact worth $5.8 million. Ryan O'Reilly's saga finally ended on February 28, when he signed an offer sheet put forward by the Calgary Flames, an offer that was rapidly matched (as was their right) by the Avalanche. Like Subban, O'Reilly signed a pillow contract, worth $10 million over two seasons.* With a pillow arrangement, both sides take a different sort of risk than seen in a long-term deal. With lengthier contracts, the risk assumed by the team is that the player peaked early, resulting in diminishing returns as the contract (and the player) ages, to the point where the player becomes a serious anchor on organizational payroll in ensuing years, taking up far more cap space than the man deserves, and preventing the team from upgrading other roster spots. The player, in exchange for earlier financial security, risks outplaying his contract, leaving him with a relatively modest stipend as the salary cap goes up, so that comparable talents, both in terms of on-ice skills as well as NHL seniority, are making substantially more money than he will in the latter years of his pact. With the pillow deal, the team risks less from a capital assets point of view, as the dollars are typically far less than would be given to a player agreeing to a longer term deal, although it risks seeing that player walk in a year or two once his RFA status has expired. Similarly, the player gains the potential benefit of retaining his right to become an unrestricted free agent (UFA) after five years in the league, while he risks a serious injury in the following year or two that could drastically lower his open market value once he is completely free.
*The contracts of Benn, Subban, and O'Reilly were prorated for last season due to the time missed from the lockout and the time missed holding out.
This year, with a full preseason in which to lose our minds over meaningless brawls and endless small sample size mirages against varied competition, the final two RFAs put ink to paper last week, ensuring that there will not be a single holdout marring the start of the 2013-14 season.
New York Rangers
Re-signed RFA C Derek Stepan to a two-year contract worth $6.2 million (September 26, 2013)
By increasing his scoring rate by nearly 50%, Stepan proved himself to be a worthy first line center. Among Rangers' forwards, the former Wisconsin Badger was at or near the top in ice time in all manpower situations. That durability also holds true season-to-season, as he has yet to miss a match in his three NHL campaigns. Playing with 200-foot wingers in Ryan Callahan and Carl Hagelin, Stepan was the seventh-most-valuable forward in the NHL, as per GVT, with more defensive value than any of the others in the top 50.
Although he did not appear in a single preseason game, there seems to be little doubt in Manhattan that the 23-year-old will be ready to go when the first puck drops on the Rangers season on Thursday in Phoenix. He could even see an increase in his scoring rate (although VUKOTA sees him regressing part way back to his old scoring rates) if he is paired with a truer sniper like Rick Nash more often. With a new coach in town, in Alain Vigneault, one who likes to favor his offensive performers with extremely beneficial circumstances, we should not be surprised if Stepan maintains his newfound scoring (Something that VUKOTA does not account for).
With an absolute absence of rumors pointing to potential offer sheets being extended to Stepan before signing, there was never any real doubt that he would return to the Blueshirts. On the question of what type of deal he would be receiving, there should similarly have been no doubt as to what the Rangers would be offering. As a team that is pinned to the salary cap, they would not have been able to afford a long-term deal that would have had to eclipse $5 million to give the young center pause to even consider the offer. In fact, at the time of signing, the Rangers had nudged over the line by about half the cost of a replacement-level player. Reasonable contracts had to be moved to the AHL to keep the denizens of Madison Square Garden on the up and up.
In this case, looking at his career trajectory, we have every reason to believe that Stepan will be highly sought after as a UFA when his new deal expires after the 2014-15 season. With the cap expected to rise considerably by then, and the Rangers only holding three contracts (Nash, Brad Richards, and Ryan McDonagh) beyond that point, we should expect to see them have a solid chance to re-sign the eventual face of the franchise, at a price point well above his current salary and likely to extend past $7 million, or $2 million more than they could have had him for had the cap room been available to give the former second round pick a long term deal now.
Toronto Maple Leafs
Re-signed RFA D Cody Franson to a one-year contract worth $2 million (September 26, 2013)
Much like the Rangers, the Toronto Maple Leafs perpetually spend to the cap, if not beyond. When they inevitably find themselves with more in contract dollars than allowed under the CBA, the Leafs are happy to eat the money and bury the player in the AHL, even if (as is now the case) they can only write off around $925,000 of any salary with the remainder still counting against the cap.
Even though Franson ranked as the second-most-productive blueliner in Toronto last year, the Leafs are flush with competent or better defensemen this year, which allowed them to take a hard stance in their negotiations with the former Nashville Predator. Two years away from unrestricted free agency, Franson was public in his demand to only sign for one year, in recognition that the cap will likely never be lower than it is right now and that more money will be available to sign him, long-term or not, next summer. Toronto GM Dave Nonis was only offering two-year pacts up until he relented late in the game.
While Franson has long been vastly underrated for his contributions (the Leafs acquired him as a throw-in from Nashville as the bonus for taking the supposed dead contract weight of concussion-addled Matthew Lombardi off their hands) he began to blossom under Randy Carlyle last year. Gifted with a plus shot and a plus-plus release, Franson is an incredible weapon from the point at even strength and on the power play. On the downside, his own-zone play has always left something to be desired. He has never been trusted to take a regular shift on the penalty kill and has been given protected shifts throughout his NHL career. His offensive zone start rate of 45.9% last season is actually deceptively low as the Leafs had horrible Fenwick numbers and were hemmed in their own zone regardless of who they had on the ice. His aforementioned rate was second highest among full-time defenders behind only the recently waived John-Michael Liles.
In the end, the Maple Leafs relented and gave Franson the one-year deal he was looking for, meaning we may be in for an encore once more next summer. Even though that was not their intention, the Leafs have a great number of contracts that expire after this season and will be able to make a better decision on Franson then. Presuming a healthy 2013-14 season, pencil in a salary that is double the current iteration next time around.
Ryan Wagman is an author of Hockey Prospectus.
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