THE PROJECTION BUSINESS
THE PROJECTION BUSINESS
Offering term and big money to an unproven player is a gamble. But increasingly for NHL execs, a Hail Mary on elite talent is not only worth the risk, it's the smart play.

John Chayka was pretty fresh on the job in 2016 when Clayton Keller became the first player drafted under his tenure as GM of the Arizona Coyotes. The scene was exactly what you’d expect after Keller’s name was called seventh overall; big smiles, hugs from the family, a bunch of people on stage wearing their best suits. Despite posting killer numbers with the U.S. National Team Development Program, Keller’s slight frame had introduced the possibility he might slip a bit down the board — and opened Chayka’s decision up to potential criticism — but it was no real shock to see a guy with his talent get snatched up. “He is an excellent skater. [He’s got] vision, hands — I love this pick for Arizona,” said analyst Mike Johnson. “This is where the league is going.”

Three years on, an occasional reminder of Keller’s talent is still required. His rookie campaign was a 65-point success, but his sophomore season brought a 22-point dip. He has just one goal this year and is producing at about a 55-point pace on a club that doesn’t win games by outgunning opponents.

Lose yourself in the lows and it’s easy to wonder why Keller was offered a seven-year contract worth $7.2 million annually a full month before he was to begin the third and final season of his entry-level deal and basically a year in advance of restricted free agency. Look around the league, though, and you’ll soon find that some of the best deals going these days — for the teams, that is — were signed more as a show of faith than a reward for what was already on the record.

Young players are influencing NHL games like never before and as the I-deserve-to-get-mine mentality spreads to the point of orthodoxy among them, the challenge of transitioning from their CBA-mandated, entry-level deals to their second contracts isn’t going away for teams weighing a risk-reward scenario while making calls on players with small bodies of work at the highest level. There are no sure things when you’re in what Chayka calls “the projection business,” but increasingly it seems there’s enormous upside for teams that trust their evaluations and come to the table early prepared to talk about six or seven years.

PACK OF PACTS
Despite a production dip after his rookie season, Keller was sewn up early by 'Yotes GM John Chayka, who also inked Jakob Chychrun, Christian Dvorak and Nick Schmaltz to long deals before their ELCs lapsed

Leave it to the youngsters to start a trend, and trust the generations north of them to slightly mislabel it. Not long after Keller and the Coyotes knocked out their business, no less than 11 restricted free agents coming off entry-level pacts — all somewhere between very good and elite — had yet to strike new terms with their teams as training camps were about to kick off. When six of them — Zach Werenski, Charlie McAvoy, Brock Boeser, Brayden Point, Matthew Tkachuk and Patrik Laine — all settled with two- or three-year agreements, the Internet reflexively started throwing around the term “bridge deal.” The phrase has been around in this context for a while and though it remains appropriate in that these contracts offer a palatable short-term solution, there’s a new dynamic in play that almost renders it a misnomer. “It was the bridge from entry level to the monster [third contract],” says one agent. “I just think we need a new word for it now.”

That’s because, while still short and connective, these deals are no longer merely a vehicle to get players to the real payday; they already contain serious dollars themselves. The smallest cap hit among those half-dozen players who went all summer without contracts and signed short-term is McAvoy’s $4.9 million per and the juiciest is Tkachuk’s $7 million. Even by pro sports standards, that’s not still-putting-in-your-time money. Maybe the current bridge deals should be known as “kick the can” contracts, because they allow the team more time to sort out their financial affairs until the really big AAV comes due. And, let’s be clear, that large figure is what these players have in mind when they think of becoming restricted free agents again in the dead prime of their career. In a tidy bit of planning on the part of those elite young guns, that next negotiation will dovetail with an expected salary-cap spike thanks to the lucrative U.S. television deal the NHL steadfastly believes is coming when the current one ends after 2021–22 (to say nothing of how legalized gambling could change the landscape).

So if a player doesn’t get an offer of long-term security at the outset, it’s a pretty easy pivot to think: How about I get paid now and really, really get paid not too long from now? It’s a strategy that’s become commonplace in the NBA, a league one long-time hockey executive says he keeps close tabs on so he’ll know what trends are coming to hockey in three to five years.

A bridge deal — okay, “kick the can” doesn’t exactly roll off the tongue — can offer clubs some temporary flexibility and end stressful and distracting negotiations, but it’s probably rare for it to be Option A. “By coming to the table a year early [teams are likely] going to get the player at a discount [relative] to what they’ll probably get the player for if they go down to the wire,” says the agent.

We’ve all seen the high-stakes exchanges in movies that involve a briefcase full of money on one side and a bag of merchandise on the other: The rule of thumb is nobody hands over the cash until they see the goods. Hockey circles are full of people who gag at the notion of forking over mega dough — like the vast total promised on six- or seven-year deals — to anyone who hasn’t already left a red line’s worth of blood on the ice. Difficult though it may be, those executives have to get comfortable with the idea of promising the green before unzipping that bag and seeing everything inside.

“It’s easier to cite past production and then rationalize why a certain level of compensation is warranted,” says Chayka, whose fellow GMs pulled some disgruntled double-takes when they saw the bar Keller’s deal was setting. “I think that’s a lot less cognitive strain than to understand how you create value. Those years have gone by and have already played out, and you’re trying to match your revenues with expenses, essentially. You’re paying for the production that’s upcoming — and that involves projection. It’s certainly not perfect, but that’s the business we’re in.”

Chayka will be the first to tell you every situation is unique when it comes to negotiations. Budget considerations dictate the Coyotes have to be unconventional and creative. Some teams can play the no-state-tax card; the Toronto Maple Leafs can afford to have a star player like William Nylander sit out and not worry about losing top billing in their market. What’s increasingly tough to argue, though, is that regardless of the situation, getting out in front of things and offering money and term is something you must look long and hard at if you’re on the side cutting the cheques.

Nathan MacKinnon makes $6.3 million annually to be a top-three offensive threat in the league, something that will be true through the 2022–23 season. He signed his seven-year extension eight days into becoming an RFA, on July 8, 2016. At that point, MacKinnon was coming off a two-year period where he basically played at a 54-point pace. In the first year of his deal, he notched 53 points in 82 games. One year later, he was runner-up to Taylor Hall for league MVP. (Hall, by the way, continues to make $6 million per on a seven-year deal he signed the summer before he could become an RFA.)

POUND-FOR-POUND
Arguably the best contract in the NHL today, MacKinnon's seven-year extension wasn't the no-brainer it appears to be in hindsight when he and the Avalanche put pens to paper

The Florida Panthers watched Aleksander Barkov post 96 points for $5.9 million last season and he inked his six-year extension six months before the end of his ELC in January 2016, when he was in the midst of a third-straight injury-shortened season and had yet to register more than 36 points in a single campaign.

Jack Eichel is a solid bet to notch his first 100-point season for $10 million thanks to an eight-year deal he signed on the eve of his final entry-level campaign in October 2017. That’s a healthy tab, but still great value for a guy with his pedigree who would have been a slam dunk first-overall pick had he not come along in the same draft year as Connor McDavid.

Some will say the preceding examples were no-brainer calls from the outset, though hindsight is probably playing a larger role in that opinion than one might initially realize. Is Keller in the same category as any of those players? Not on our spreadsheet. But odds are that, by next year, a player who tore up the pre-NHL ranks and had more points in his freshman season than anybody his age or younger — save Laine — will be worth $7 million annually. And even if it takes two years to get there, he’ll still have six more to go at great value.

Ryan Nugent-Hopkins has never put up the totals you’d hope for from a first-overall pick. On balance, though, he’s certainly been worth the $6 million he’s been collecting annually for six years thanks to an extension signed in 2013, one year before his ELC ran out.

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And don’t forget the ancillary benefits of taking care of business early. Now the guy can focus on hockey instead of publicly saying the next deal is the last thing on his mind while furiously texting his agent behind closed doors. “There’s no distractions in terms of the player playing in the last year of his contract and the speculation that goes along with that,” says Chayka. “For Clayton, there’s no incentive other than to do what’s best for the team. Not that it was ever any question, but it certainly erases that for all of our [signed] players. Now, hopefully, they can focus on buying a house and setting down roots and getting their family situated. I think if you have the right types of people who are wired the right way, that stability is really what cultivates a sustained winning culture.”

Mock the Ottawa Senators all you want, but surely that’s what GM Pierre Dorion had in mind when, at the end of September, he signed Thomas Chabot to an eight-by-eight extension nobody needs to be sold on right before Chabot started skating in his final ELC campaign. Maybe New Jersey Devils GM Ray Shero would tell you the same thing about Nico Hischier, who has fine two-way chops, but thus far has topped out at 52 points and matched Keller’s 47 last season. Either way, Shero wasn’t waiting around to find out what this year will bring, inking his young centre on Oct. 18 to a seven-year extension worth just a hair less than Keller’s.

Will we see clubs push hard to get the likes of 2020 RFAs Mathew Barzal, Pierre-Luc Dubois and Roope Hintz to follow suit in the coming months? And will the teams that employ Rasmus Dahlin, Andrei Svechnikov and Elias Pettersson try to avert future headaches by inking them to extensions as soon as that becomes an option next summer? Again, the particulars of every situation are different, with all kinds of factors pouring into the equation. If recent history is any indication, however, the price tag for top-level talent left twisting in the wind after their ELCs expire goes up, not down. “I’m personally aware of several situations where there were negotiations with some of these big RFAs [in the summer of 2018] when they were eligible to sign extensions and the player’s ask was several million dollars lower than what they ended up signing for [in 2019], and it was the clubs that [initially] said no,” explains the agent.

If it’s in team’s best interest to sign players early, the natural counter is that players shouldn’t be in a rush to put pen to paper. Fair enough, though that path isn’t for the faint of heart as drawn-out negotiations — like the one that hung over the Leafs and Mitch Marner all summer — don’t tend to be fun for anyone. “I don’t think any player wants to be in that situation,” Keller says of the grind-it-out talks we saw in many markets in September. “The Coyotes and myself wanted to get a deal done, it was awesome to get it done before that and not have to worry about anything. Now you just go out and play, and that’s a great feeling.”

It’s certainly a common one in the Coyotes dressing room. In addition to Keller, Jakob Chychrun, Christian Dvorak and Nick Schmaltz all signed six- or seven-year extensions well in advance of their ELCs lapsing. “We prioritized being proactive,” Chayka says. “I think being reactive — in life in general — typically doesn’t bear a lot of fruit. There’s some risk involved in any decision you make and being proactive involves slightly more risk, but ultimately we feel we know our players better than anyone.”

Of Schmaltz, Dvorak and Chychrun, the highest cap hit on the new deals belongs to Schmaltz at $5.9 million. He’s come out of the gate putting up nearly a point-per-game on a defence-first Arizona team that appears ready to build on a determined showing last season and challenge for a playoff spot in the Pacific Division. Go ahead and be dismissive of a squad that hasn’t made the post-season since 2012 but remember, this is all about casting forward, and Keller couldn’t be more excited about the Coyotes’ trajectory.

“I just love everything about Arizona,” he says.

When the feeling is mutual, lock it in.



Designed and edited by Evan Rosser.

Photo Credits

Mike Stobe/NHLI via Getty Images; Sara Schmidle/NHLI via Getty Images; Michael Martin/NHLI via Getty Images.