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Are ultra long-term contracts a blessing or curse for the teams that issue them?

Jul 15, 2012, 5:33 PM EST

Jeff Carter, Mike Richards Getty Images

Since the salary cap era started, teams have been becoming more and more open to signing players to extremely long-term (basically lifetime) contracts in an effort to provide themselves with cost certainty. It also allows them to give players the type of money they want now, while keeping the overall cap hit low by frontloading the deal. In turn, players get the security that a long-term deal provides.

It seems like a win-win scenario, but of course it’s not that simple.

The NHL owner’s initial CBA proposal sought to limit contracts to five-years in length, but even if these types of ultra long-term deals are still an option next season, should GMs be interested in signing players to them?

To get a better idea of the potential pros and cons, let’s take a look at the five longest active deals that have been in effect for at least three full seasons.

Rick DiPietro (New York Islanders – 15 years, $67,500,000) — Obviously, this deal perfectly sums up the risks involved. The deal began in the 2006-07 campaign and at this point a $4.5 million cap hit is pretty low for an all-star caliber goaltender.

The problem, of course, is that DiPietro is not an all-star caliber goaltender. He’s been plagued by injuries over the last four seasons and hasn’t even been that good during the brief periods where he’s been healthy.

At this point, he’s the Islanders backup goaltender and someone who probably wouldn’t be able to find a one-way contract as an unrestricted free agent. All the same, the Islanders have made a commitment to him that lasts through the 2020-21 campaign.

Alex Ovechkin (Washington Capitals – 13 years, $124,000,000) — Going into this deal, Ovechkin looked like about as safe a bet as you could get. Sure, his $9,538,462 cap hit was excessive for the time and is still the biggest in the NHL, but could you blame Washington for locking up a man that promised to be one of the greatest goal scorers of his generation?

To an extent, yes. It doesn’t matter who the player is, assuming that he’ll be among the league’s elite for the next 13 years is a big gamble. It hasn’t exactly blown up in Washington’s face, but Ovechkin’s 38-goal, 65-point 2011-12 campaign certainly leaves something to be desired given his contract. Still, Ovechkin is young and over the span of his career, last season might prove to be the low point.

Henrik Zetterberg (Detroit Red Wings – 12 years, $73,000,000) — Zetterberg’s deal has fared better than most. His $6,083,333 cap hit is looking increasingly favorable given how much the market have risen in recent years. His offensive output did decline a bit in 2011-12, but he remained the team’s point scoring leader.

Mike Richards (Philadelphia Flyers/Los Angeles Kings – 12 years, $69,000,000) — This one is a bit harder to judge. The Philadelphia Flyers eventually decided to go in a different direction, but, in part due to his reasonable $5,750,000 annual cap hit, they were able to trade away his contract for a pretty nice haul.

He then went on to record just 44 points in 74 games in his first season with the Los Angeles Kings, but he stepped up in the playoffs and helped them win the Stanley Cup. His deal certainly can’t be called a failure, but it remains to be seen if he’ll be able to build off of his strong playoff run and have a more productive all-around season in 2012-13.

Marian Hossa (Chicago Blackhawks – 12 years, $63,300,000) — For the most part, this contract has worked out fine so far. Hossa helped the Blackhawks win the Stanley Cup and it’s hard to argue with that. His $5,275,000 cap hit is also pretty friendly and has made the deal justifiable even though he’s missed a decent amount of playing time due to injuries.

With Hossa, even after three seasons under the deal, the jury is still out. He’s already 33 and he’s signed through 2020-21. It might not be too long before his contract starts to look like a drag on the team.

In a way, Hossa’s deal encompasses the risks that we still can’t fully explore. Seeing as these types of deals gained popularity with the new (soon to be old) CBA, we haven’t gotten to see these deals play out through to their conclusion. However, we can already clearly see examples of the big risks these contracts come with.

  1. biasedhomer - Jul 15, 2012 at 7:53 PM

    Add to the List

    Keith
    Lungo
    Quick
    Carter
    Franzen
    Kovy
    Suter
    Parise

    • polegojim - Jul 16, 2012 at 7:29 PM

      Flip sports and have some more fun:

      MLB:
      Puljols
      Rodriguez – Mr. Absent in October

      NFL:
      Vick
      Romo

      • biasedhomer - Jul 17, 2012 at 1:31 PM

        Well, for starters, MLB has no cap, so for a team like the Yankees, it won’t screw them up too much.

        Secondly, in the NFL, those contracts are not fully guaranteed. Vick can be cut after this season I believe, and the Eagles will not have to pay him a dime. And Vick and Romo or both not even close to 10+ years.

        The best comparison for salaries of players would be in the NBA, which you oddly left out. How often does a player sign a 10+ year contract? The longest was I think Magic and his 25 year contract. I can’t recall any other 10+ year contracts. Even Miamis Lebron, Wade, and Bosh didn’t get 10 years (even though they did get $100M). And personally, I’d rather have a player on my team making $100M over 5 years, rather than $100M over 10+ years.

  2. stakex - Jul 15, 2012 at 9:45 PM

    Its hard to judge these deals till they are over.

    Take Ovechkin for example. Some will point to last season and say “See, Washington shouldn’t have given him that big contract with the big cap hit”. Yet it was just one year, and the guy still scored 38 goals in a “horrible season”. If he was an UFA this summer, he would still be offered just as big of a contract by pretty much every team in the NHL. Now if his production continues to fall till the end of his deal, THEN you can turn around and trash talk it.

    The only deal on this list that you can say right now was down right bad, is Rick DiPietro. He was never really good enough to warrent the contract the Islanders gave him. All the other guys on this list were worth the risk based on their ability…. DiPietro wasn’t. Throw in a rapid decline in his ability, and a mountain of injuries and his contract looks REALLY bad.

    • jrsaffell - Jul 16, 2012 at 11:44 AM

      Using Ovi as an example was stupid. The guy can be on a nothing line in a system that goes against his play style and still put in almost 40 goals. He’s worth more than Crosby imo and he isn’t one nudge to the head away from ending his career.

      DiPietro’s cap hit isn’t crippling though. And as you said, the guy was never that good. The Isles are crap because they have crap ownership and management. NYI could work around him if the wanted, it’s not like if Pitt loses Sid again and possibly forever and get stuck with that mega-contract.

  3. ray2013 - Jul 16, 2012 at 4:00 AM

    I think focusing only on the player’s contract is misleading in terms of evaluating the impact of these contracts. Look at the Wild with their two major signings. In the middle of the summer they were able to sell thousands of season tickets in addition to their existing season ticket holder base. I don’t know the exact number, but I’m sure they also sold thousands of ZP and Suter jerseys, and those official jerseys aren’t cheap. Signing elite players to these types of contracts raises the excitement level of the local market, who buy season tickets and luxury boxes, and who pay to watch their teams.

    I know as an Albertan, that many people here will be supremely outraged, if the Oilers don’t sign Hall, Eberle, Nuge and Yakupov to long-term contracts so that they can play the majority of their career as Oilers. You have talent, you don’t want to lose it. Nobody here wants to watch anyone of them pull a Suter/ZP and walk away from Edmonton with nothing in return.

  4. polegojim - Jul 16, 2012 at 10:30 AM

    Long term contracts = guaranteed flatline/lag period for player performance.

    I’m a proponent of ‘pay for current performance’ at every level of professional sports.

    Annual base contract with built in incentives for success.
    1) You mail it in – enjoy the base
    2) You get injured – enjoy the base and free health care, hope your team does well.
    3) Individual success/stats – enjoy some $
    4) Team success – progressive incentive per level of playoffs reached – enjoy even more $$
    5) Team Wins Stanley Cup – enjoy the MOST $$$

    In a capitalistic society, people will perform at a higher level when there is perennial ‘URGENCY’ – Anticipation of gain/fear of loss and less comfort.

    You want the best every year? Nobody relaxes – Keep the HEAT ON.

    Seriously, how do the NHL, NFL, MLB, and NBA NOT get that?

    • jrsaffell - Jul 16, 2012 at 11:51 AM

      People want guarantees, but it would be refreshing if contracts were paid on a performance basis.

      How bout 100k per point? Doesn’t that sound ridiculous when you put it that way? Plenty of guys are getting way more than that though.

      I could use 100k and I’m sure that over 82 games even I could get an assist or two. I’d be fine with that money.

    • williplett - Jul 16, 2012 at 1:00 PM

      Sorry, but this looks more like an insanely rigid-and even more random-way of paying Rollerball players under a communist regime than any sort of capitalistic system where NHL players negotiate a fair share of a very lucrative pie. What happens to good players on bad teams or bad players on good teams? What happens to an elite player injured by a bad player who has even greater incentive to injure talented players now that injured players only get scale? Who is given the all seeing right to dictate who has “mailed it in”?

      No thanks, personally, and I kinda get why the multi-billion dollar professional sport leagues in this country don’t get it either.

      • polegojim - Jul 16, 2012 at 7:22 PM

        @williplet – I bet you would! You must work for the government,eh?

        That thinking is exactly what gets you what you have today! Spiraling cost and inflated pricing at every level imaginable, plus failing return on investment -see every league I mentioned, including PBT discussions right now.

        Communism? Last time I checked, Corporations… you know, the ‘capitalist’ kind… run their businesses on ‘pay scales’ and ‘target bonuses’.

        I never said ‘pay everyone the same’. It’s not too hard a concept… let me help you:

        What happens to good players on bad teams or bad players on good teams?
        See #3 – in case you didn’t read. You can EASILY stack individual success bonuses to make up for a good player on a bad team, but he still has to perform at a personally HIGH level to get it.

        What happens to an elite player injured by a bad player who has even greater incentive to injure talented players now that injured players only get scale?
        Ok – then negotiate an ‘injury without opportunity’ clause that pays at 50% targets, with $ dock to a penaltized player. If a guys risks 10-25% of his pay, including bonus’, for intentional injury – that’s a deterent.

        Who is given the all seeing right to dictate who has “mailed it in”?
        HELLO – let’s try this again – it’s not dictating… It’s called ‘P-E-R-F-O-R-M-A-N-C-E’, you know – that results the player achieves on ice. They ALREADY negotiate bonuses on this stuff. It’s not new. Plus/Minus, Points, SOG, Goals, Assists, Save%, etc. checkout NHL.com… they’re pretty smart people and already track ALL ot those things.

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