Johnston on NHL: The next $10-million man

Pittsburgh Penguins centre Evgeni Malkin should be able to command $10 million per season when negotiations begin on an extension that will start in 2014.
March 19, 2013, 5:05 PM

The $10-million player is on his way back to the NHL.

It’s only a matter of time now.

What the recent extensions to Anaheim Ducks forwards Corey Perry and Ryan Getzlaf underscored more than anything is that top free agents — or, in this case, pending free agents — should be able to command higher salary cap hits in a system that includes term limits on contracts.

Signing for the maximum eight years with the team that drafted them, Perry ($8.625-million) and Getzlaf ($8.25-million) are slated to carry the fourth and fifth-highest cap hits among NHL players next season.

And it likely won’t be long before they’re bumped down the list.

In fact, this summer will probably see a NHL player sign a deal that averages at least $10 million per season for the first time in roughly a decade. Pittsburgh Penguins centre Evgeni Malkin should be able to command that type of money when negotiations begin on an extension that will start in 2014.

Ray Shero, the Penguins general manager, has already acknowledged that Malkin will likely be given a higher cap hit than captain Sidney Crosby, who signed a whopping 12-year extension prior to the lockout that pays him an average of $8.7-million per season.

It’s worth looking closely at that front-loaded deal — one that can’t be repeated under the new collective bargaining agreement. Crosby is scheduled to earn $86.4 million during the first eight seasons, which averages out to $10.8 million per year.

Why wouldn’t Malkin seek something similar over that same time period?

Essentially, the only thing that would get cut out is the extra years at a reduced salary tacked on the end to help lower the overall cap hit.

Under the previous CBA, a large number of the contracts given to top players included that kind of back-diving structure, which helps explain why the record-setting extension Washington Capitals captain Alex Ovechkin signed more than five years ago still hasn’t been surpassed.

His cap hit of roughly $9.54 million continues to top the NHL — for now.

With term limits and variance rules now in place, the next wave of big-name free agents should be able to go above and beyond the Great 8.

As one high-profile agent put it in a conversation with sportsnet.ca: “Those guys are going to get paid a lot more money in a shorter window of time. And after the career contract is finished they can still sign another one.”

Opinions vary on how high NHL salaries might soar under the new CBA, but one agent (different than the previous one) estimated that the AAV — average annual value — of top contracts could hit $13 million or $14 million within five years.

That number was projected based on what the agent expects will be significant revenue growth for the industry, which would obviously push the salary cap much higher than the $64.3 million it will be set at next season.

If that scenario ends up playing out, players like Jonathan Toews, Patrick Kane and Steven Stamkos should be the main beneficiaries. Each of those established stars is due a contract extension in the next two or three years.

Prior to the most recent lockout, top free agents started getting eight-figure salaries — Shea Weber was due $14 million this season alone — but they were only for a couple years at the beginning of a long-term deal.

Moving forward, some players are bound to get them over the life of their contract.

What’s interesting is that the eight-figure hockey player first appeared more than a decade ago, when Jaromir Jagr, Peter Forsberg, Paul Kariya, Pavel Bure and others were all bringing in more than $10-million per season.

The introduction of the salary cap and 24 per cent salary rollback coming out of the 2004-05 lockout put the brakes on those huge contracts. The industry is now showing signs of catching back up.

There’s a strong argument to be made that Perry would have received even more money had he decided to test the free agent waters this summer.

But ultimately the 27-year-old looked at the Ducks success this season and the commitment Getzlaf made to the organization and decided that the grass isn’t always greener elsewhere.

“You look around the league and there’s a lot of unknowns about what might be if you do move,” Perry said Tuesday during an appearance on Hockey Central @ Noon. “I thought this was going to be home for a long time.”

Of course, he still had to get the right number from Ducks GM Bob Murray to be completely sure.

And in signing his new contract, Perry helped show that the price for top talent in the NHL is going up.

A look at the top salary cap hits NHL players will carry in to the 2013-14 season:

Top salary cap hits in 2013-14 NHL season
Player Team 2013-14 cap hit
Alex Ovechkin Washington $9,538,462
Sidney Crosby Pittsburgh $8,700,000
Evgeni Malkin Pittsburgh $8,700,000
Corey Perry Anaheim $8,625,000
Ryan Getzlaf Anaheim $8,250,000
Eric Staal Carolina $8,250,000
Shea Weber Nashville $7,857,143
Rick Nash N.Y. Rangers $7,800,000
Vincent Lecavalier Tampa Bay $7,727,273
Zach Parise, Ryan Suter Minnesota $7,538,462
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