Five questions about the wave of 'efficient' long-term contracts

To say that the NHL is a copycat league is like noting water is wet. It’s so self-evident that it barely feels worth mentioning. You see it in the 1-3-1 power play and the drop breakout, or when teams try to build facsimiles of whichever roster won the previous Stanley Cup. And, of course, you also see it in the way managers structure contracts.

The Leo Carlsson offer sheet from this past summer seems to have altered the collective brain chemistry of GMs around the league, who suddenly noticed what the rising salary cap means, and have handled it like an eight-year-old in a convenience store with a 20 dollar bill. 

As the new CBA was set to kick in on Wednesday, Tuesday became a contract run of bizarre proportions. Teams rushed to sign players to eight years while they still could, or to offer them bigger signing bonuses, or to just get a deal done because others were getting deals done. 

Those new contracts should mostly be fine, but they leave us with questions. Let’s go with five thoughts on all this contract madness, and what just happened.

1. Are these deals really unlikely to crush anyone?

Fans can hang their hat on the fact that no team will be harmed much by these deals. The salary cap is going up at such an alarming rate that a lot of these deals won’t require the players who signed them to be league leaders for the money to have been worth it over the long term. The percentage of the cap they’ll eat up will shrink as the upper limit rises, and so there will be a world where second pair defencemen make $9 million, or good third line forwards earn $6 million -- there’s not a player who signed a deal this past week that can’t attain those expectations. 

There’s even a provision in the CBA that allows guys who flop before age 25 to be bought out for one-third of their deal (it’s two-thirds if you're 26 or older), and these recent signings are largely players who are young enough that this could be an option if things go south. 

I always say: Teams generally know what young players are going to be before anyone else, so these contracts reflect a reasonably close estimation of what the players are or will become. That's why these contract totals shouldn't crush teams.

Now, the devil on my shoulder is asking: “Is it a good thing to pay them before they’ve had to push to maximize themselves? Is that the best way to get the most out of a player?” 

But this is the positive section of today's piece, so maybe we’ll treat those questions like an eclipse and not look directly at it. Next!

2. Are we sure contract efficiency should be the goal at this point?

By the time everyone catches up to a trend, you’ve missed the advantage. You wanted to adopt analytics when there were still enough rock heads out there who treated them like witchcraft that you could gain an advantage. That's harder to do when all 32 teams employ professionals to take them seriously.

Likewise, the time to chase contract efficiency was during the five years of a flat salary cap. Through that time, good teams had been doing cartwheels at the deadline to add good players using double-retention trades, or playing with LTIR structure. The best teams knew you absolutely needed maximum efficiency deals (hello, Carolina). 

But when you talk about the direction things are going, efficiency is suddenly less important. You always want to be efficient if you can, but these days you can actually use a bridge deal on a player and it won’t kill you. You could get them for, say, two cheap years up front and if you’ve got a legit stud on your hands, then you’re happy to pay them after that, and you shouldn't have a cap problem doing it. Not to mention, this gives you the chance to go seven years after the bridged two, effectively locking up a stud for nine combined years. 

And, sometimes, that player you’ve bridged will reveal themselves to be something different than you expected, only now you'll have more information and can pay them on an extension for what they actually are, rather than what you hoped they were.

Further to this, if you go long on a guy who turns out only 'OK' and the rest of your team isn't good enough, you’ve now forever-rostered a player who’s part of something that isn’t working. There’s opportunity cost there, potentially for young guys on the way up. 

Lastly, you're making a statement to a player when you sign him for a lot of money and a lot of term. That player is probably not going to like it if he's slotted low in the lineup after being paid like a core contributor. You could unnecessarily complicate things. 

3. Will all these deals even end up being efficient?

I guess I’m struggling with the math a bit. The idea is that by signing players to these big-money, long-term contracts now, they'll eventually become very "cheap" deals.

But in almost every case, the upfront cost is such an overpay (Ryan Johnson noted as much when talking about Zeev Buium), sometimes by several million, that you’ll require that much of a performance delta (play quality versus cost) in the other direction over the later years. People will argue “If he’s even a second pair defenceman in five years, it’ll be fair pay.” And that’s true if it eventually happens. But it doesn’t off-set the overpay up front, which kills the logic of doing a deal like this. 

In six years, will Buium be a $15 million defenceman making $9.4 million? I could absolutely see it. But the Canucks need him to become that for his deal to even claw back to level value. It probably will happen, he’d just have to out-play the money by so much later on to see the gains they seem to be expecting, and it feels odd to me.

That’s a long walk to this: a few of these deals will undeniably, unequivocally be dirt cheap deals for their teams in time. I’m just not sure that, on average, they will provide the great, efficient value that they’re supposed to present.

4. How long until internal salary caps become relevant?

I mentioned that you could conceivably bridge a guy now, and you’ll still have room to pay him later if he turns out to be a star (Lou Lamoriello loved “if you have time, use it”), but: I’m not so sure every NHL team will have an appetite (or ability) to pay to the cap every year. 

For years now, the worst part about being a hockey fan has been that you almost need an advanced degree in math to understand what's going on with player movement. Contracts and cap space have entered our parlance to a degree that’s hurt the enjoyment for the average fan, but this may become less relevant if we start to see a separation between the real spenders and those who keep their powder dry until they’re legit contenders. 

Some teams just won’t want to spend to the ceiling, period. 

The hope is that all this contract and math stuff becomes less relevant as the years go on. If you want your team to sign a guy, they should have space. The question may just come down to whether your owner has the deep pockets, and the desire, to make it happen.

And finally,

5. What does this mean for the next contracts your team has to hand out?

If you’ve tracked the Maple Leafs saga over the years, you’ll note that they gave out their big deals right before the cap went dead flat. Many will claim the main problem was that they signed John Tavares for $11 million, then caved on William Nylander, leaving other players on the roster to think “well if that guy got what he wanted, I should get mine too.” While teams like Boston and Florida had “internal caps” set by their top players that others fell behind, the Leafs had guys grinding for every nickel, and it hurt them.

After a team says “Hey we love this player, here’s a max-length deal,” isn’t it going to be hard to dig in with the next guy? Haven’t you declared the floodgates open? There will be more cap space ahead as long as it continues to grow, but you just don’t want to start the “more money era” by being too liberal, too early.

In all, the floodgates aren’t just open, they’re gone. There’s new money to be had, and teams are as eager to spend it as the players are to grab it. Many of these new deals will work out just fine and look great, but there won’t be a 100 per cent hit rate.

The sudden quest for efficient contracts comes at an odd time, and I think we’re still waiting to see a team figure out the new, best way to operate, while copycat teams chase the gains earned by efficient teams of yore.