The four kinds of July 1 NHL free agent signings

Canadiens GM Marc Bergevin talks about signing Alexander Radulov and bringing him back to the NHL, says it’s a risk, but hopefully with a big reward.

In the immediate aftermath of the July 1 NHL signing season, analysts and pundits offer immediate reactions to the decisions that general managers make.

The trouble with this process is that none of those forecasters has the advantage of looking into the future to see if they’re correct. Like the GMs themselves, the prognosticators are engaged in educated guesswork based on imperfect information. They may offer compelling arguments and detailed statistics, but none can give a guarantee of what is to come.

Here is a different sort of breakdown, one that instead breaks some of the biggest decisions of July 1 into broad categories.

Low-risk, high-reward

The low-risk/high-reward deal is the kind every general manager loves and every pundit proclaims an immediate win, but for obvious reasons these deals are rare. How often are players that can really move the needle for a franchise available for a song?

There was really only one inarguable example on July 1: Brian Campbell’s return to the Chicago Blackhawks. Campbell is far closer to the end of his career than to its beginning, but even at the age of 37 he remains an exceptional defenceman.

Last year, the Panthers were 12 Corsi events per hour better when he was on the ice than when he was off it, which is a ridiculous number and a big part of the reason he ended the season with a plus-31 rating. Still, it doesn’t really take analytics to know that the Blackhawks underpaid for his services.

It’s obvious if we simply comparing his ice-time to his paycheque:

campbell

Barring a debilitating injury in Game 1, there’s virtually no way for Campbell to underperform his one-year contract. Nearly half the league’s defencemen have a higher cap hit than Campbell; less than one-in-ten averaged more minutes than he did last year.

It’s worth mentioning Alexander Radulov’s contract with Montreal here, too. Radulov’s cap hit is significant, but because he’s signed to only a one-year deal, there’s little risk for the Canadiens, and they inked a player who could be a premium offensive weapon for the team.

High-risk, high-reward

Most of the best free agents don’t sign sweetheart deals; as a rule they want guaranteed money for as long as possible.

The 2016 class is no exception. Six players signed deals worth at least $5.0 million per season and with a term exceeding a half-decade. All are capable of playing a significant role in the present; all run the risk of becoming costly mistakes some years down the road.

Two of those players, David Backes and Frans Nielsen, are 32 already and that heightens the risk involved. The other four, though, have their own issue:

structure

From a risk perspective, the key attribute of signing bonuses is that they cannot be bought out; that money is guaranteed. Salary is bought out at two-thirds of its total over double the length of its contract, but it represents such a small portion of these deals that they’re basically iron-clad.

To illustrate, if Edmonton were to buyout Milan Lucic today, it would be on the hook for 85 per cent of his deal, and that’s the least bonus-laden contract of this quartet. If the Islanders wanted to buyout Andrew Ladd immediately, they would have to pay 94 per cent of that pact.

Low-risk, low-reward

There’s a mushy middle between low- and high-risk and between low- and high-reward, but most bargain deals find themselves at this end of the spectrum. Consider, for example, the players identified as likely value signings by Sportsnet’s analytics department. Two of them signed on the opening day of free agency.

Jonathan Marchessault was one, agreeing to a two-year deal at an annual value of $750,000 with the analytically-inclined Florida Panthers. That’s very little money for an NHL player, and Marchessault’s scoring rate was second-line level last season, so it’s possible that he’ll end up a contributing piece on a scoring line in Florida. That’s both useful and good value, but it’s not the kind of effort likely to dramatically alter the Panthers’ fortunes as a team.

Patrick Wiercioch was the other player who signed, on a one-year, $800,000 agreement with the old-school Colorado Avalanche. That’s not a lot of money for a guy who can play regular minutes and who might even end up as a capable second-pair defender for the Avs. Again, though, we’re talking about smart but relatively small bet at the margins.

We liked those four players going into July 1 because it seemed likely that the amount of risk would be lower than the potential reward, but even so it takes a lot of those small, smart bets to move a franchise in the right direction.

High-risk, low-reward

These are deals where there’s just no way for the player to cover the acquisition cost. The draft equivalent is a team taking a player it believes will be a bottom-six talent with a first-round draft pick; the team could have just traded said pick for an already-completed version of that player.

These deals are uncommon, but not quite as rare as the low-risk, high-reward deals mentioned at the outset. Teams fall in love with players that fill what they feel is a needed dimension.

Matt Martin in Toronto is a good example this year. He’s a physical player who does smart things defensively, but he just doesn’t add enough offence to play higher up the lineup. His scoring rate ranks 369th among NHL forwards (min. 1,000 minutes) since 2012, which means that if offence alone were what mattered he isn’t really a top-12 NHL forward.

He’s also 27, so improvement is exceedingly unlikely. Toronto paid him $2.5 million per year on a four-year term. There’s just no way to win that deal; at best he’ll be overpaid relative to his contributions but those contributions will fill a need for the Maple Leafs.

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