What's The Deal With 100 Year Hockey Contracts
I was first introduced to the insanity involved with NHL contracts back in 2006. That was the season that my fantasy hockey team "I Don't Watch Hockey" won the championship and earned me a $150 prize.
Because, as my team name stated I didn't watch hockey, I had to rely on looking at different fantasy websites and articles to try to come up with some kind of draft strategy. During my research on goalies, I came across a story that caught my eye. The title was something along the lines of
"Rick Dipietro Signs 15 Year Contract With New York Islanders"
What the What!?
I thought I was reading the story wrong. A 15 year contract? That couldn't be right.
Well it was.
The Islanders signed a goalie of all people to that deal. Back then that didn't mean much to me, but after hearing about goalies coming in and out of Washington over the years, it sounds pretty insane to me now. (I also recall the words "injury-prone" thrown out a bit and looking at some brief game-logs...what a terrible deal)
Fast forward to 2010...I still don't watch hockey.
That year I came across another interesting story while perusing around the internet. It caught my eye because it looked familiar.
"Kovalchuk gets 17-year deal from Devils"
There it was again. Another insane NHL contract. This time however, the NHL decided that the deal was too long, and they rejected it. Interesting...
Fast forward to 2012...I watch hockey now!
Just last night someone tweeted "The Flyers Are Insane"
According to reports the Flyers offered the Predators Shea Weber a 14 year deal for around 100 million bucks.
I have a question. The Kovalchuck deal was rejected because at the end of it he would be 44 and the NHL didn't think he would be playing still. (NY Times) The Weber deal would put the defenseman at 41 years old at contract end. How is that much different? Why are the Flyers allowed to do this?
The Predators can still match the deal, and they have the money to do so. However, Philly went creative and front-loaded the contract which could make it hard. (Rotoworld)
So can someone explain to me what is up with these long term contracts. As an NBA and NFL fan my knowledge of contracts is that they are meaningless. If you want more money you can just cry like a baby and refuse to play or request trades. Basically do whatever you want.
Do these contracts exist in hockey because it is more honorable. Is it because of the CBA. Leave me some answers in the comments!
4 comments:
A lot of hockey people have asked the same question re: Kovalchuk.The length of contract loophole was being exploited for a while, but the NHL felt it had to act with New Jersey, becuase they felt NJ took it too far.
But the reason for the long contracts is because the cap hit is basically defined as total money paid on the life of the deal divided by # of years, not the amount a player gets paid in any 1 season. So a lot of these deals will only be paying out a million or so of real cash at the end of the deal, but it allows the cap hit to be reduced initially. Hope that answers 1 of your questions.
Hockey contracts are fully guaranteed and there was no limit on the length. I think NBA contracts can only be 5 years, and NFL contracts are not guaranteed (cry like a baby, get new contract. Suck like a baby, get cut).
So the player is going to get all of that money, but there is a salary cap and players want more money than there is cap space available to pay them. So some teams started offering them 15 year deals where the last few years pay basically nothing to bring the average annual amount (which is the cap hit) to a lower level, while paying the player about twice what their cap hit is in real money early on. The general thought is most of those players will probably retire in their late 30s anyway and get the team out of that cap hit and contract when it isn't worth it.
Other teams (Caps, Islanders) have done more legitimate long term contracts; Ovechkin has a 13-year deal that pays him either $9M or $10M each season, and ends when is is like 33. He will play through the whole thing, and it wasn't lengthened to reduce the cap hit. Backstrom has a 10 year deal with slowly increasing salaries. The team believes these are their core guys and will be worth it (and possibly a bargain, see Backstrom who makes less than a lot of top centers) even later in the deals. The risk is if they're injured, the owner still has to pay them, and I think you can't get insurance companies to cover a contract longer than, like, 7 years.
So some teams do it because they truly value a player and think it is worth it to pay that much, that long. Others do it to get a top player to play for them at absurdly too-high salaries earlier, with an implied expectation that the will retire before the pittance being paid at the end of the contract designed to help the team's salary cap numbers.
I thought that 100 year contract was a big fluke but it appears like there are some underlying truths to that absurdity. How can summer hockey camps even thought of this benign idea is just beyond me, and I'm sure I share the same sentiment with literally everyone who will come across this.
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