Last week, we looked at ten types of bad NHL contracts, along with some tips on how general managers could avoid them.
This generated a fair amount of discussion and feedback, much of which fell into one of two main groups.
The first — and by far the most common — of those two groups was something along the lines of this: “Hey dummy, you listed a player on my favourite team as a bad contract but he’s not because he’s really good and my team’s GM is super smart and never makes any mistakes!”
Fair enough. That was probably to be expected.
But the second most common feedback was: What about the other side of the coin? Where’s the post on all the good contracts?
That’s a decent idea. Who says we’re only allowed to focus on the negative around here?
So today, we’re going to flip the script and focus on the good contracts.
But we’ll need one caveat. Unlike the list of bad contracts, we’re not going to do ten different types. (Yes, the blogger’s handbook says we should aim for some symmetry between the two posts, but that’s not going to be possible here.)
To be honest, I had to trim the bad contracts list down to get it to ten, which is why categories like “The overly aggressive new owner who orders his GM to do something dumb” and “The GM who doesn’t care about the future because he knows he’s getting fired soon” didn’t make the cut.
That won’t be the case with the today’s list, because the reality is GMs still sign more bad deals than good ones.
So we won’t get to ten, but we’ll do the best we can. And we’ll start with the very best contracts of all.
(Specific cap numbers in this post are via CapFriendly.)
THE ENTRY-LEVEL DEAL
The contract: This is easily the most obvious category. Entry-level deals almost always provide good value, and at times can be almost ridiculously cost-effective.
That’s how the CBA is designed – players have to pay some dues on their first contract before they can start down the road to making the big money.
In a league where young players (especially forwards) often have some of their most productive years early on, that adds up to the potential for team reaping enormous value on these contracts.
Sure, occasionally a youngster with a bonus-laden deal will trigger those bonuses for a cap-strapped team, rolling the cap hit into the following season and causing headaches. But even in those cases, it’s other bad contracts on the books that are causing the cap squeeze — not the young star who’s still making far less than he could on the open market.
How to make it happen: Stockpile picks, draft well, and then develop those prospects into players who can contribute in the big leagues. In other words, exactly what every team in the NHL already says it wants to do.
We did say this was the obvious category.
But if you want a degree of difficulty, the real trick here is to find a way to compete for a Stanley Cup while at least a few of your best players are still on their ELCs. That’s what teams like the Edmonton Oilers and Toronto Maple Leafs are hoping they can manage, but it’s rare to see a team pull it off. See the 2010 Chicago Blackhawks for an example of what can happen if you do.
THE SECOND-CONTRACT SUPERSTAR
The contract: These days, you hear a lot of grumbling from GMs about second contracts.
Originally, it was assumed that players would enter the league on cheap ELC deals, graduate to slightly higher-paying second contracts, and then work their way towards UFA status where the really big money would be waiting for the stars who’d proven themselves over time.
But in recent years, we’ve seen some players skip straight to a big-money, long-term deal on their second contract. That bothers some old-school types, and it goes against how we thought the new system would work.
But here’s the thing: the players who take these deals have to negotiate with very little leverage. Sure, they can always stay home, and in some cases the threat of an offer sheet could spook a team into action.
But for the most part, there’s no open market for these guys. They have to take what they can get. And as long as they live up to their potential, those long-term deals almost always end up being a great value for the teams that sign them.
Recent examples: Drew Doughty. Erik Karlsson. Mark Scheifele. Oliver Ekman-Larsson. Tyler Seguin. Taylor Hall. Ryan McDonagh. Vladimir Tarasenko, probably. John Tavares, who may have the most team-friendly contract in hockey. Johnny Gaudreau. Hampus Lindholm.
How to make it happen: The gamble here is that whole “as long as they live up to their potential” part.
If the player regresses, then the team can be stuck with a deal they might regret. We don’t even need to be talking about a total bust – even a modest step back can be enough to make a deal look shaky.
Take Jordan Eberle, who signed a six-year, $36-million extension in 2012 when he still had one year left on his ELC. He was coming off a 34-goal, 72-point season and it looked like the Oilers had locked him in at great value.
Four years later, he’s a good player who has yet to get close to those numbers again, leaving the Oilers with a contract that’s at best just OK and maybe tips slightly into the “bad” territory.
Those sorts of scenarios are why some teams still prefer to offer a short-term “prove it” deal as a second contract. But overall, the bigger deals work far more often than they don’t, and if a team is willing to roll the dice on a young player, the potential payoff is a big one.
THE GENERATIONAL TALENT
The contract: When the original salary cap CBA was crafted in 2005, it included a limit on individual player salaries: nobody could sign a deal with an AAV of more than 20 per cent of the current cap.
That seemed about right, and the limit did come into play early on when Brad Richards signed for a then-maximum $7.8-million hit in 2006.
But then a weird thing happened. As the new rules sunk in and teams started figuring out how to work under them, the 20 per cent limit was all but forgotten as nobody came especially close. Alex Ovechkin signed for 17 per cent in 2008; Sidney Crosby got 14.5 per cent in 2012; Jonathan Toews and Patrick Kane‘s record-setting extensions only came in at 15 per cent.
That’s fine – none of those guys are taking second jobs to make ends meet. But the end result is that true franchise players — the kind that only come around every few years or so — are probably underpaid in today’s NHL at almost any price, even when they’re the highest paid players in the league.
Recent examples: Crosby. Ovechkin. Some or all of Toews, Kane and Anze Kopitar, although that’s less certain. And of course McDavid, who will never be overpaid at any point in the next decade no matter what contracts he signs.
How to make it happen: In the words of Brian Burke, Win a goddam lottery.
THE UNDERRATED DEFENCEMAN
The contract: Every now and then, an NHL team just gets a bargain. Call it timing, call it smart forecasting, or just call it luck, but sometimes a long-term deal works out beautifully.
It’s not unheard of for those deals to go to forwards – Max Pacioretty comes to mind – or even occasionally to a goaltender.
But for some reason, defencemen show up in this category far more often than anyone else — and it’s usually a specific type: solid in both ends, often with good possession numbers, but doesn’t put up eye-popping offensive totals.
And by the time everyone realizes that he might secretly be a stud, some smart team has locked him up on a great deal.
How to make it happen: Ask everyone in your front office if they’d rather have the players on the list above, or Dan Girardi, Andrew MacDonald or Dion Phaneuf. Fire anyone who even stops to think about it.
THE UFA BARGAIN BIN
The contract: Free agency opens on July 1, GMs around the league spend the better part of a week handing out ridiculous contracts to just about anyone with a pulse, and then the entire hockey world packs up and heads to the cottage for the summer.
Meanwhile, a handful of useful players are still sitting on the open market wondering how they missed out on the windfall.
And as training camp draws near, some of those players may decide that a bargain basement contract is better than no contract at all.
How to make it happen: Don’t let anybody in the front office anywhere near a phone on July 1.
Yes, we already gave that advice in last week’s post, but it’s worth repeating here. GMs make their worst mistakes when UFA season opens. Waiting even a few days for prices to come down is the mark of a smart team.
But how do you resist that opening day temptation? The key here is to focus on the “what” instead of the “who.” If you’ve convinced yourself that you absolutely must sign one specific player, then you’re going to have to make your move on July 1 and it probably all ends in disaster.
But if you decide that you want, say, a third-line scoring winger or a bottom-pair defenceman with some toughness, then you can be patient knowing that more than one guy will fit that description.
Sure, it’s a bit of a game of chicken – it’s always possible that everyone on your list gets snatched up while you’re trying to play it cool.
But the odds are good that somebody useful will still be available after the market starts to taper off, and that’s where you can find a deal that represents value.
THE HOMETOWN DISCOUNT
The contract: This is the one every fan loves to talk about.
Sure, your favourite team’s star player needs a new deal, and everyone assumes it will be expensive. But surely he’ll take less to stick around, right? He likes it here, the organization treats him well, and he says he loves the fans.
Besides, he wouldn’t want to clog up the salary cap when he knows you’re trying to build a Cup winner… would he?
Spoiler alert: In almost every case, yes, he would. Despite fans bringing the concept up every time a star player needs an extension, big hometown discounts are exceedingly rare.
Recent examples: Everyone who ever negotiates with Steve Yzerman, for some reason. And you could certainly make the case that Crosby took a steep discount when he signed his most recent deal with the Penguins. And maybe the Sedins?
Other than that, the list is fairly short — perhaps because players hear about stories like this.
How to make it happen: Build an organization that treats players and their families well, develop a reputation for fairness, and put together a team that has a legitimate shot at the Stanley Cup.
Also, if at all possible, be Steve Yzerman.
THE VETERAN CHASING ONE LAST CUP
The contract: The distant cousin of The Hometown Discount, this deal sees an aging player take a well-below-market contract to chase a championship.
These deals are also rare, but we see one or two most off-seasons.
Recent examples: Brian Campbell with Chicago. Brad Richards with Chicago. Paul Kariya and Teemu Selanne with Colorado back in 2003. Daniel Alfredsson with Detroit. Marian Hossa with Detroit, at least as far as the one-year term. Jarome Iginla rejoining Darryl Sutter in Los Angeles next July, but try to look surprised.
How to make it happen: Build a Cup contender (if not an outright Cup winner), leave yourself with a little bit of cap space, and then wait for the phone to ring.