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NHL has reason to fight for maximum contract lengths

Nov 14, 2012, 12:07 PM EDT

Rick DiPietro Getty Images

NHL owners and general managers need to be protected from themselves. This much we know, and the league doesn’t deny it.

Even the last CBA – the one with the hard salary cap that was supposed to be bulletproof – had loopholes that GMs exploited to sign free agents.

The most notable loophole allowed teams to offer “back-diving” contracts that gave players lots of money up front and practically none as the term expired. Not only did these deals artificially deflate the cap hit by tacking on years past a player’s probable retirement date, it also gave the player the bulk of his money sooner than later, which is better than the opposite.

It’s hard to imagine those back-diving contracts will exist once a new CBA is signed. The owners will fight too hard for them to be nixed.

However, some observers think owners will stand less firmly on another demand, that being maximum contract lengths of five years.

Under the last CBA, there was no such thing as a maximum contract length. Ilya Kovalchuk and Rick DiPietro signed for 15 years each. Shea Weber got 14. All told, 16 players notched deals for 10 years or more.

Players like long-term deals because they offer security. NHL contracts are guaranteed, so once they’re signed they can’t be canceled, even if the player stops producing or gets hurt.

Which brings us to our point: If the salary cap restricts how much a player can earn and there’s no way to front load deals, what do you think a prized free agent is going to ask for in negotiations if there’s no cap on contract lengths?

The answer is term. If only because there’s nothing else to ask for.

And if meeting that demand is the only way one team can beat out another team to sign the player, he’ll get it. (Let’s face it, GMs know they can be fired tomorrow, so what do they care if the team has a problem down the road? See: moral hazard.)

Long-term contracts aren’t necessarily a terrible thing, but believe it or not there have been athletes that got a little too comfortable once they cashed in on a big deal.

There have also been players whose health issues kept them off the ice. (Or, in the case of DiPietro, severely restricted their time on it.)

Maybe a few long-term contracts gone wrong is simply the price owners will have to pay to get a new CBA. And there are probably owners and GMs that don’t want five-year limits; they want to lock up their stars as long as possible.

Then again, maybe it’s a battle NHL commissioner Gary Bettman thinks is winnable (the NBA won it), so he might as well win it.

  1. tmoore4075 - Nov 14, 2012 at 12:16 PM

    Said it 1000 times now. The 5% variance eliminates the back diving contracts. If they are still worried about long contracts cap them at 8-10 years but most players won’t be getting those. Probably just the superstars. Pushing for a 5 year term limit and the variance is stupid. There is a deal to be made here and for the most part easily if both sides would actually give.

    • rogersjd16 - Nov 14, 2012 at 12:42 PM

      You just said it – the NHL wants the limit and variance. If they came to the players with an offer for 7 or 8 years with the variance, the players would accept.

    • elvispocomo - Nov 14, 2012 at 3:58 PM

      Absolutely agree 5 years is unnecessary. The link for the NBA getting a 5 year term limit notes they previously only had 6 years maximum, so I can see a limit but making it 5 years to try and fix these extremely front loaded contracts just because that’s what the NBA has is not effective.

      I’d be fine with even 7 years max (along with something to protect the actual yearly salary from dropping considerably in the final years) but it’s clearly something the NHL doesn’t have to have so low to protect themselves from themselves.

  2. bleed4philly - Nov 14, 2012 at 12:40 PM

    Bettman’s whole blueprint for this lockout is the NBA. Where as the players are trying to make it like the MLB. If there isn’t hockey by the time football season is over, we’re not having a season. The players should just agree to it, they’ll still be millionaires in the middle of a recession.

    • stakex - Nov 14, 2012 at 1:43 PM

      The recession actaully ended three and a half years ago… but that aside, you still make a valid point.

  3. rogersjd16 - Nov 14, 2012 at 12:41 PM

    “NHL contracts are guaranteed, so once they’re signed they can’t be canceled, even if the player stops producing or gets hurt.”

    Unless the NHL just decides they won’t honor them and creates new issues to hold a hockey season hostage with…

  4. bleed4philly - Nov 14, 2012 at 12:45 PM

    Might I add they should just allow owners to collude so they don’t come across looking like complete idiots with some of their contracts. That’s a huge factor that partially caused this mess in the first place.

  5. hitem396 - Nov 14, 2012 at 1:04 PM

    hey jason brough.

    everyone knows this. i also dont like 10 yr deal esp. when it comes to Hockey. Hockey is not basketball. one shot one hit can change his whole career.

    However, owners have offered long term deals to swallow some cap hit from a player like ovi, sid, perise, weber and else. question is WHY did they offer the long term deal? if they thought it was too risky, then they should have not offered it. Simple as that. ok forget the past.

    on HRR issue, honor the current contracts. then 50/50 split, then players also should give up this kind of contract year limit issue. this is the only way.

  6. soj83 - Nov 14, 2012 at 1:50 PM

    the NHL already has the power to limit the length of contracts…it is very complex and hard to understand, but here it is: don’t offer long contracts. you can’t whine about length of contract and the amount of money in the contracts when you yourself are the ones presenting them.

    • stakex - Nov 14, 2012 at 1:54 PM

      Such a false argument.

      All teams want to win, so if there is a loophole they are going to exploit it. If one team starts to do it, all the other teams have to follow if they want to compete even if they don’t want to. Its a legit problem that needs to be fixed, and if your best argument against fixing it is: “Don’t fix it, just don’t do it”, you really don’t have much of an argument (or an understanding of the concept “winning”).

  7. stakex - Nov 14, 2012 at 1:51 PM

    I think the second to last statement in this article hits a REALLY important fact. The vast majority of NHL players will gain absolutely nothing from this lockout, even if the players “win” in the end. I mena look at it like this:

    1. These contract issues, which Fehr says is a major sticking point, don’t effect 90% of the players in the NHL. Only a handful of super starts will ever get a contract longer then five years, and an extra year of restricted free agency isn’t going to hurt most players.

    2. When it comes to a possible salary reduction, your super starts are willing to throw a season away to avoid it since in the long run it might actually save them money. However the vast majority of NHL players will lose more money with a lost season, then they would have just taking a small pay cut and playing the full year.

    —————

    So when you see Fehr on stage with Crosby right behind him, and hear inflamatory statements from guys like Kovelchuck/Ovechkin…. remember that this lockout is all about guys like them, not your average player. Fehr is willing to throw the season away so a handful of NHL players make a bit more money over the course of their career, while hundreds of other players would lose quite a lot.

    • ThatGuy - Nov 14, 2012 at 4:15 PM

      All together the contract issues effect all the players. Different one’s effect different type of players.

      The 5 year Max is likely to effect star players a lot more, no arguing that.

      But the 2 year ELC and added year until UFA is meant to hammer the avg player. Think how many avg players spend 2-3 years in the AHL. Taking away another year of that ELC will allow teams to sign avg players to lower paying two-way deals after their ELC expires because the player has no leverage or NHL experience. A Player like Kyle Palmieri who spent the past two years in the AHL would have had his ELC expire with barely a cup of coffee in the NHL. If there wasn’t a lockout he would be playing top 6 minutes for the ducks this season, which would give him a heck of a lot bargaining power come RFA time.

  8. kicksave1980 - Nov 14, 2012 at 2:04 PM

    @stakex- Long term contracts don’t equal success. I mean, I know that the Islanders have been threats to climb out of the Atlantic cellar since giving DiPietro that deal, but…

    So your concept of staying competitive by “keeping up” with the idiot owners who hand these deals out is flawed. Owners who feel compelled to follow suit, well, that’s their problem.

    • valoisvipers - Nov 14, 2012 at 2:16 PM

      @kicksave1980 Do you then let your star UFA walk away to another team for a couple bucks more? You’re fans will love you for that eh and good luck looking for a new team to be a GM for.

  9. billsin20xx - Nov 14, 2012 at 2:51 PM

    How about the fans though? As a fan I like my ‘super star’ staying with my team, hopefully till he retires. I hate this changing teams every x years, I think it’s great when they are signed for the long term.

  10. kicksave1980 - Nov 14, 2012 at 3:04 PM

    @Valo- I hear what you’re saying, and I don’t disagree. But my point is that we are all being denied hockey because owners can’t save themselves from each other. I actually preferred the non-salary cap days…money doesn’t equal success…just ask the Rangers.

    • elvispocomo - Nov 14, 2012 at 5:31 PM

      Agreed on that, but it’s unreasonable to expect that all teams will avoid these crazy, long-term, front-loaded deals just because it’s the right thing to do. Nashville tried it and ended forced into a bigger deal than they probably would have been able to get Weber to agree to after the Philly offer sheet.

      The players have to take some responsibility for signing these deals as well, knowing the risk and financial burden it puts on a lot of the teams. They certainly (their agents really) drive up the price as UFAs to maximize earnings.

      In the end, contract length means very little if you can have cap hits and salaries be equal, or at least with only small variances, over the length of the contract. No $1M salary in the final years after giving $10+M in the first few means that deal isn’t as good for the players and the cap hit can’t be artificially lowered.

  11. mungman69 - Nov 14, 2012 at 4:05 PM

    It’s just a shame that owners and players just keep posturing instead of sitting down and hammering this sh•t out. Everyone loses but the players lose more than the owners. None of them care about the fans. With the internet and so many other sports to follow some day the fans won’t come back.

  12. fortwaynekomets - Nov 14, 2012 at 7:26 PM

    7 letters my friends… ECHL & AHL.

  13. dannythebisforbeast - Nov 14, 2012 at 11:11 PM

    Shows how stupid they are that no one considered that teams would offer life contracts to circumvent a cap.

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