Thursday, August 9, 2012

New CBA the End of Mega-Term Deals

By Mike Chen

The negotiations between the NHL and NHLPA have been cordial and plentiful, which is a good sign. However, we haven't really gotten down to the meaty issues yet — in CBA terms, that's usually protecting the owners from themselves. And one of the key sticking points will be capping off a contract's term. This comes not a moment too soon, as the number of mega-deals has risen at an alarming rate. In many ways, it's become one of the few ways teams can actually outbid each other for a player's services. But, just like spending too much money, offering too much term is a huge risk that makes little sense in the long-term.

Over the past few years, we've seen the highest player salaries top off on a cap hit around $8-$9 million, even though they could theoretically blow past that. Top players continue to get their money, but the term is now the key negotiating factor. It's sure to be one of the things removed when the next CBA is resolved, and while we don't know how they'll be affected (my guess is that all existing contract terms stay the same but we won't see these in the future), I'm guessing that the owners will be thankful that they're eliminated.

Of course, they'll find another way to get into a ridiculous bidding war with each other. But in the meantime, let's take a hard look at what they're probably saving themselves from. Rick Dipietro's contract was the laughing stock of the league when it was signed, but between 2006 and early 2008, Dipietro played well enough to put up solid numbers and an all-star selection. Injuries derailed his career, but had he stayed healthy, the Islanders would have had a $4.5 million cap hit for their starting goalie. These days, second-line centers make more than that.

The risk/reward situation was simple: if the player stays healthy and plays reasonably to expectations, it's a bargain. If they get hurt or if their game goes south, then it's a disaster. It's a high-wire act, and Dipietro represents a cautionary tale. Yet some teams can't seem to stop themselves from jumping in on this.

While the Minnesota Wild made a huge splash in the publicity department by signing Ryan Suter and Zach Parise, one has to wonder about the long-term logic of these deals. It'd be different if each player was in his early 20s, but both are entering the prime of their career. That means that their performance value will probably be high for the next 2-4 years before they begin to follow the typical player model of regressing with age. There's no guarantee to that — players like Ray Bourque and NIcklas Lidstrom showed us that a special few consistently defied age — but that is a significant amount of cap space taken up for a value that will probably only deliver for the first third of the contract term.

Outside of player regression, there's always the issue of catastrophic injury — one that forever changes the way a player performs. If these types of contracts were the norm back in the mid-'90s, don't you think the Philadelphia Flyers would have offered one to Eric Lindros? And yet, just a few years and a few concussions later, the Flyers and Lindros would have had an even uglier situation to deal with in their messy divorce. You can't predict these things, yet some teams continue to feel the need to think bigger and shoot higher than their peers.

These days, fans may appreciate the publicity and sports-talk fodder that these types of deals create. But it doesn't take long for the sheen to wear off and things to go sour — look at the Washington Capitals, where even captain Alex Ovechkin's long-term deal became the subject of some grumbling during his sub-par performance last year. The new CBA will most likely cap things (I'm guessing 7-8 years, which is still a long time when you think about it).

That will take some of the bidding-war excitement out of things, but fear not, fans. There's always a way for teams to come up with creative CBA circumvention … and there's always a way for other teams to take that loophole to new, ridiculous heights.

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