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Four reasons why owners have been willing to sign players to long contracts

Dec 4, 2012, 2:36 PM EDT

Tyler Seguin Getty Images

The New York Post’s Larry Brooks took the NHL to task today, slamming the likes of Bruins owner Jeremy Jacobs and Jets owner Mark Chipman for signing players to six-year contracts right before the old CBA expired, then having the gall to demand five-year limits during current negotiations.

It wasn’t the first time the owners have been accused of hypocrisy, and the players are justifiably upset with the NHL’s demands. Nobody wants their employment freedoms restricted.

That said, there are good reasons owners have been willing to sign off on long-term deals.

Here are the four main ones:

1. Because the players are young. Tyler Seguin (six-year deal) is only 20. So is Taylor Hall (seven years). Evander Kane (six years) is 21 and Jordan Eberle (six years) is 22. All four are franchise players that will still be in their 20s when their contracts expire. For that reason, the NHL may be willing to soften its position on term limits for restricted free agents. Maybe it’s a six-year max, maybe it’s eight.

2. To reduce the cap hit. It’s the back-diving type of contract the NHL won’t allow to exist in a new CBA. The league should have addressed this loophole before it signed the last CBA, but there’s no point crying over spilled milk. Currently there are 16 players with contract lengths of 10 years or longer. Of those 16, only a handful signed with the expectation they’ll still be playing when their deals expire. Take Roberto Luongo’s 12-year, $64 million contract that’s set to expire when he’s 43. In reality, it’s only a nine-year deal; the last three years are for minimal salary. In hindsight, the Canucks probably shouldn’t have agreed to it, given they’re now trying to trade him and his contract is the biggest impediment to a deal. But looking back, without Luongo’s artificially lowered cap hit, they likely wouldn’t have been able to acquire Chris Higgins and Maxim Lapierre at the trade deadline prior to their run to the Stanley Cup finals in 2011. Both players were key additions that year.

3. To get the player. You can argue all day about the wisdom of Wild owner Craig Leipold for committing a combined $196 million to sign unrestricted free agents Ryan Suter and Zach Parise to identical 13-year deals this summer. But that was the market and it was the only way he could win the bidding war for their services. Again, you can question the wisdom of the deal, but Leipold felt he needed to make the investment to invigorate a fan-base that had grown tired of losing. Given there weren’t many Wild fans complaining, it’s hard to argue he failed in that regard.

4. To keep the player. See: Shea Weber, who forced Nashville’s hand when he inked a 14-year, $110 million ($58 million) offer sheet with the Flyers. The Predators had already lost Suter to free agency; they felt they couldn’t lose their other franchise defenseman. Was it smart? Guess we’ll find out. But like Suter and Parise, Weber was going to get big dollars and term wherever he ended up. For Nashville, it was either buck up or start rebuilding again. Suffice to say, Preds fans were glad ownership chose the first option.

For the NHL, demanding term limits on contracts is no different than demanding a salary cap. It’s being done to level the playing field and protect owners from themselves.

  1. danaking - Dec 4, 2012 at 2:45 PM

    There should be a fairly easy compromise here, one that can even involve the fans. What about a five-year max contract, unless you’re signing your own player, in which case the max can be 10? Also, cap hits are either the actual value of the contract each year, or must all be the same value/year. (A 5-year, $25 million contract must be paid out $5 million a year.)

    Seems everyone gives a little there, and fans will be appeased because it will be easier for the home town team to keep players.

    • hockeyflow33 - Dec 4, 2012 at 4:23 PM

      It’s ideas like this that make me wonder what the hell is wrong with these guys. There’s been numerous solid ideas in the comment section here alone that would make complete and total sense for both sides. How can we get some of us into these meetings?

      • zetaone - Dec 4, 2012 at 4:58 PM

        Be a millionaire.

      • id4joey - Dec 4, 2012 at 6:44 PM

        That’s a stupid idea. Try sending that idea to Fehr and Bettman.

    • stakex - Dec 4, 2012 at 5:09 PM

      Thats far from a good idea.

      The owners of teams that currently don’t have star players would never go for it, neither will teams that expect to be in playoff contention for the forseeable future. There are two main problems with it:

      1. The NHL is looking for more parity… not less. Building a long term dynasty team would be MUCH easier under your idea.

      2. If teams have a much easier time keeping stars since they can offer them contracts twice as long, that would mean the only way to get a star player if you don’t currently have one is to draft them. The problem is these are no certain things when it comes to draft picks. Not to mention teams that don’t have enough star power to win the cup, but aren’t terrible enough to get good draft picks would be stuck in a terrible limbo land.

      ————————————————————————————————————

      Also, the players freaked out when the owners wanted to make it so there is no more then a 5% difference in year to year salary… do you honestly think they would take a deal where there is 0% difference allowed in year to year salary? Absolutely not. Besides, such an idea would be a real problem for older players looking for a bit of job security.

      This is why its a lot harder then you think. What might sound like a good idea before you dig into it, is often a really bad idea that has no chance of going anywhere.

      • hockeyflow33 - Dec 4, 2012 at 7:26 PM

        This would be an incredible benefit to small market teams.

  2. manchestermiracle - Dec 4, 2012 at 2:50 PM

    I’m sure those reasons look good to owners, but fail miserably to take into account the health of the game or even their own long-term interests. Is it just me, or do these guys have a remarkable resemblance to investment bankers (which some of them are)? You know, make highly-speculative, potentially disastrous bets and then arrange for somebody else to bail you out when they don’t pan out. Of course you take all the credit if it works. Oh, and don’t forget to cash in your fat “bonus” no matter how the deal turns out…

  3. davebabychreturns - Dec 4, 2012 at 3:22 PM

    There are a ton of reasons why owners would want to sign players to long term contracts, even ones that well exceed the maximum they’re now requesting.

    If nothing else, in an environment where revenue growth (or at the very least, inflation) means that a certain dollar figure gets less and less valuable as time goes on, locking players in at a specific cost is of considerable value for teams.

    The question that might be harder to answer is, why owners want to impose maximum contract lengths (this commenter would suggest that it is merely being used as leverage in these negotiations).

  4. rockyspond - Dec 4, 2012 at 3:41 PM

    Nice try danaking but:

    the owners already proposed an annual allowable variance of 5% in actual salary being paid; the PA immediately rejected that as a blatant assault on players’ contracting rights.

    the PA would never accept a system limiting a players’ right to test free agency value by allowing only his home team to sign him for more than 5 years. let’s say a player wants the security of a long term deal, but wants it from a contender rather then continuing to play to play for a perennial loser. or can a home team sign a player to a 10 year deal but then be prohibited from trading him? Maybe a more acceptable option could be a system allowing for longer term contracts with only a rolling maximum of 5 years being guaranteed…i.e after year 1, years 2-6 become guaranteed, after year 2, years 3-7 become guaranteed, etc.

    • hockeyflow33 - Dec 4, 2012 at 4:24 PM

      The NHL would finally get the NBA sign-and-trade

    • zetaone - Dec 4, 2012 at 5:03 PM

      Not sure why this is getting down votes, it’s another honest and legitimate idea.

      • id4joey - Dec 4, 2012 at 6:47 PM

        Terrible idea. Owners might as well shut down the league.

  5. id4joey - Dec 4, 2012 at 6:05 PM

    valoisvipers, why do you think people here take a fit when I comment, and 2 days later PHT comes out with an article repeating what I’ve said and no one bats an eye? Ah! Kids!

  6. id4joey - Dec 4, 2012 at 6:41 PM

    valoisvipers, I’m hearing good things about the effort to make a deal. I hope I was wrong about this player/owner meeting, and that something very positive will result. It appears that the Toronto owner, (he has a few bucks at stake here….) is pushing hard for a deal. They’ve been locked up for a couple of hours already.

    • zetaone - Dec 4, 2012 at 6:45 PM

      What do your inside sources tell you Joey?

      • zetaone - Dec 4, 2012 at 6:45 PM

        Wait. Sources, or voices?

      • hockeyflow33 - Dec 4, 2012 at 8:01 PM

        I’d imagine that they tell him he’s a douchebag

  7. id4joey - Dec 4, 2012 at 6:50 PM

    Why do you ask a dumb question when the answer was already posted? WTF is the matter with you zetaone?

    • zetaone - Dec 4, 2012 at 7:02 PM

      I want specifics. Cmon, let’s hear that juicy insider info you’ve got.

    • zetaone - Dec 4, 2012 at 7:02 PM

      More of them.

    • zetaone - Dec 4, 2012 at 7:03 PM

      Sorry if I skimmed your previous post. You see after a while of reading your stuff, that’s all I can stomach.

      • id4joey - Dec 4, 2012 at 7:22 PM

        You skim, but keep replying. Which one is it, genius?

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