Wednesday, 2 July 2008

Free Agent Cluster-You-Know-What

I thought about writing about the perceived winners and losers in yesterday's free agent bonanza, but a strange thought came over me as I sat here analyzing the contracts that were handed out. Yesterday was a prime example of what is wrong with the NHL's salary cap system. While Gary Bettman spews rhetoric about how great the cap system is, we can clearly see that, if given the opportunity, general managers will revert back to their free-spending ways with little or no regard for the long-term implications these new contracts have. In doing so, some teams have seriously limited their ability to do business if the cap ever freezes. However, that "if" is the size of Jupiter today since there apparently never was a salary cap in the NHL. There are limits that have been set, but the cap goes up every year so why bother having a cap at all?

Look at it from this perspective: at the start of the 2005-06 season, the maximum cap limit that teams could spend was $39 million. 22 players for just under $40 million made GMs do something they never had to do before - math. It also involved them speaking to valued members of their staff: people like scouts, assistant GMs, and coaches now became valuable members of the management team as their input would allow GMs to make shrewd choices when it came to signing players.

Instead, the minimum amount teams have to spend today to achieve the threshold amount for revenue-sharing is $40.7 million. Four years after suffering the worst labour conflict in sports history, and the NHL has lost sight of why the cap was put in place.

Is Brian Campbell worth $57.12 million dollars over eight years? Some may say so. But what has he done for any team lately? Buffalo didn't win the Stanley Cup with him patrolling the blueline. San Jose didn't win the Stanley Cup with him patrolling their blueline either. He has no major accolades to his name, yet he's now one of the highest paid defencemen ever. Is he worth it? That's debatable, but if his play suddenly declines, are there any teams willing to pick up his $7 million salary? Is Brian Campbell worth the same amount of money as Brent Seabrook, Cam Barker, and Duncan Keith are making combined? My answer would be an expletive-filled "no way".

If Brian Campbell's contract wasn't bad enough, the New York Rangers reportedly signed defenceman Wade Redden to a contract for $6.5 million a season for six seasons. This is a defenceman who has not scored more than 50 points in a season during his career, and is a career -13 in playoff games. The 31 year-old is now a member of the Blueshirts until he is 37. Do you really think he's going to get better with age?

Taking into consideration that the Rangers signed "superstar" Michal Rozsival for $5 million per year for four years, these two defencemen are making $11.5 million per year. That's more than Petr Prucha, Brandon Dubinsky, Blair Betts, Ryan Callahan, Colton Orr, Fedor Tyutin, Christian Backman, Dan Girardi, and Marc Staal make combined!

How about Sean Avery's four-year, $15.5 million contract with the Dallas Stars? That's $3.875 million per year for a guy who has never cracked the 40-point barrier in his career. To put this in perspective, he is now making more than Mike Modano in Dallas, and slightly less than Brendan Morrow. Sean Avery - he of 379 career NHL games, he of 167 career NHL points, he of 1067 career NHL PIMs - is making more than the franchise leader of every important statistic of the Dallas Stars, and slightly less than the heart and soul of the team. Does that seem reasonable to you?

Even the most cost-conscious team in the NHL in terms of getting value for dollars, the Detroit Red Wings, broke their own rules on spending to sign Marian Hossa. The Red Wings had repeatedly told players of all calibres that no player would ever "earn more money than six-time Norris Trophy winner Nicklas Lidstrom", yet the Wings inked Hossa to a one-year, $7.4 million contract. Does it make them better? Arguably, I'd say yes. But if you're a player in negotiations with the Red Wings, do you really take Ken Holland at his word now?

This all goes back to the "little big man" sitting in the Commissioner's chair. He sits there with the smug look on his face, and tells everyone that his business is doing well. He talks about growth of revenue and selling the game and television ratings and other stuff that he thinks is important.

But what about a team like the New York Islanders who lost $20-25 million last year under the cap system? The cap went up, meaning the Isles have to spend more, but they can't attract free agents because they play in a terrible venue in front of sparse crowds, yet "business is good" according to Mr. Bettman. They will lose more money this year than last year because of that wonderful cap system. The same goes for Phoenix, Atlanta, Florida, and Nashville. And now the mid-sized markets are sliding into the "have-not" category as well.

As Jim Kelley of put it, Gary Bettman has devised a system that now provides "a stunningly out of control escalation of salaries, a stunningly similar era in which wealthy large-market teams can wreak havoc with the budgets and payrolls of their smaller so-called partners, a stunningly one-side advantage for players who despite giving back a quarter of their salaries across the board to help settle the lockout are now making it back hand over fist".

Before the lockout, there were several big-market teams that could afford to buy and sell their way to a Stanley Cup. Today, there are several big-market teams that can afford to buy and sell their way to Stanley Cup. The gap that the salary cap was supposed to eliminate through parity has opened up again, and there is nothing the NHL can do to stop it.

Many teams are complaining that they can't reach the minimum threshold value without risking huge losses, and the few teams that can afford to spend up to the maximum limit are complaining that their profits are being sucked dry by the growing number of teams at the bottom of the pile. Revenue-sharing works well when there is a hard cap system. Revenue-sharing does not work when two-thirds of your league are having trouble reaching a minimum spending amount while posting losses.

What makes the system even more flawed is that the players can end the CBA early if they like, but why would they when salaries are escalating out of control again? The CBA won't expire until the end of the 2011-12 season, and we may be facing the threat of a lockout all over again.

It was said after the lockout that it would take the GMs and players some time to figure out all the intricacies of the CBA. It appears that the players have a greater understanding of the CBA than what the GMs do. In fact, it appears the GMs have no clue whatsoever, and there is nothing the owners can do regarding the slowing of the salary cap escalation that has been put in progress.

And who is to blame for that? The man who devised this entire scheme: Gary Bettman. The CBA was called "idiot-proof" because it was devised to make everyone more money. If that is the case, Mr. Bettman is calling every owner, the men Mr. Bettman works for, idiots. And he set them up to look like idiots by feeding them the same rhetoric he feeds the media and the fans, making us all idiots.

I'm not saying that what Mr. Bettman did in establishing a revenue-linked salary cap was wrong. On the contrary, a salary cap was needed to help save struggling franchises across the NHL. However, if those same franchises are struggling again under the cap system, then the cap system either is broken or never worked in the first place. Which is the correct option? Your guess is as good as mine. However, when linking the salary cap to revenues, it should take into consideration the market which is having the most trouble turning a profit.

In this system, the cap will work to make a profit for the weakest link in the league. If the weakest link can turn a profit, then all the other franchises will also be profitable by deduction. That's how the salary cap and revenue should have been linked in order to have everyone on the same page to make hockey profitable. Instead, we're back to pre-2005 salaries, and pre-2005 losses for some franchises.

Nice job, Mr. Bettman. If I was an owner, I'd have lots of questions right now.

Until next time, keep your sticks on the ice!


Steph said...

Lidstrom's contract is at 7,450,000, so Hossa's still making less than him - I don't have a problem with letting Hossa come so close being the deal just seems so smart to me - one year, no risk, why not spend the money. The fact that he'd take pains to keep Hossa's below Lidstrom's on principle even if it's just that tiny amount, at least to me, is pretty awesome, but I've always been a huge fan of the way the organization treats their players and takes care of their own.

This is a very apt post, though, I agree with the vast majority of what you say about the salary cap; it's unfortunate how dysfunctional it really turns out to be.

Teebz said...

Yeah, I realized after I had written the entire thing that Hossa was making $50K less than Lidstrom, but we're talking about perennial Norris trophy winner Nick Lidstrom compared to never-won-anything Marian Hossa. There should be no comparison in salary between these two, in my opinion.

I can't help but feel that history is repeating itself again. The strike in 1995 solved nothing. The lockout in 2005 solved nothing, it seems. When do we say "stop the insanity"?

Steph said...

It's true, but I think I'm willing to overlook it because it's a one year sort of thing - now if they'd matched other teams in offering Hossa a huge 5-7 year $7mil contract I'd certainly be all up in arms over how exactly he deserves the same sort of treatment as Nicklas Lidstrom. Then again, perhaps you have to figure in what discount Lidstrom took and how much he's actually worth, too, I don't know.

I don't think the league is ever going to realize that these quick fixes are exactly that - sure you can toss the problem away for a couple years, but it persistently creeps back, just like it is now, and then what? Someone needs to come up with a better solution, but I'm sure that's easier said than done.

Anonymous said...

I read that Hossa said it was "difficult to take less money." Some of these pros just make me shake my head.

Tallon said that he "gladly over payed for Campbell," and Campbell said that another team actually offered him more money, but he wanted to be with a team on the ups and closer to his home town.

Until I see him play, he might actually be worth more than Seabs, Dunk, and Cammy. Seabrook bounces around out there, Duncan Keith has trouble scoring, and OK. We'll see.

I'm happy about Huet, but am not happy that we have 12 million invested at the goalie position. Khabby does not deserve what we pay him, but he might step it up now that we've brought someone better in.