NHL can’t stop the insanity
Even after lockout, contract craziness continues
At least we didn’t have to wait long to discover that a lower salary cap and new contract term limits wouldn’t stop the profligate spending in the National Hockey League.
It was supposed to be the start of a new era of restraint for NHL owners, the consequence of the new measures earned during the lengthy lockout. In the first few days of the free-agent period, though, almost half a billion dollars was committed to a few dozen athletes.
It makes you wonder why the players fight so hard in the collective bargaining process. No matter what new spending restrictions they finally concede to the league, it seems some owners still can’t help themselves. Defying all attempts at self-regulation and self-control, they agree to astonishing deals stretched over indefensible periods of time.
The problem with payroll rules, even a salary cap, is that there are always ways around them. As Forbes recently wrote, the rules are like tax legislation: It’s a constant cycle of teams finding loopholes and the league trying to close them.
When the cap was first established, it wasn’t long before NHL general managers started signing players to dubious front-end-loaded, long-term contracts that stretched well beyond retirement age.
These deals were designed to circumvent the maximum annual salary and reduce the annual cap hit for signing a star player. As any dispassionate observer could have predicted at the time, many teams playing this game were saddling themselves with lengthy commitments to players that stretched well beyond their prime years.
Marian Hossa, who is 34 and almost needed back surgery this summer after admitting he was limping during the playoffs, has eight years left on his contract with the Chicago Blackhawks.
Some teams might not have cared about overpaying a player in the later years of a contract especially if, like the Blackhawks, they had decent revenues and it helped them win a championship in the short term, but even small-market franchises were sucked into the vortex.
Just over a year ago, Minnesota Wild owner Craig Leipold was bemoaning the scarce profits of an NHL owner. “The revenue that we’re generating is not the issue as much as our expenses,” he said.
“And our biggest expense by far is player salaries.”
A few months later, just weeks before the owners were about to take their tough, united stand to control salaries, the Wild signed two of the most coveted free agents available, Zach Parise and Ryan Suter, to 13-year, $98-million contracts.
Such lengthy deals made a mockery of the cap and drove up the price of free agents beyond what many teams could afford. So, the league fought hard to impose term limits of seven years on free agents signing with new teams and eight years for those renewing with their existing clubs.
Even that, it’s now clear, hasn’t completely reined in the temptation to overspend and over-commit.
The Maple Leafs, for example, are considered one of the biggest winners of the off-season because they signed David Clarkson. However, Clarkson is a power forward who is almost 30 and the Leafs had to commit to paying him more than $5 million a year for the next seven seasons. Based on welldocumented past evidence, including Wendel Clark, the former Leafs captain to whom he is most often compared, Clarkson won’t be able to sustain his style of play for the length of his contract. He may have an impact this year and next, but the Leafs will likely be overpaying him within three years.
The greatest contributor to the off-season extravagance this year, however, are the compliance buyouts. With a reduced cap next year, the league handed out “Get Out of Jail Free” cards so that teams could buy out their previous foolish, unsustainable contracts and replace them with crazy new, untenable deals.
A few years ago, the Tampa Bay Lightning signed Vincent Lecavalier to an 11-year, $85-million contract extension. Just four seasons into the new deal, they decided that, gosh, being committed to an aging star until he was 43 years old wasn’t such a good idea, so they bought him out for $33 million. The end result: a team that’s not exactly rolling in revenue effectively paid Lecavalier $73 million for four seasons, more than $18 million a year.
Fans of teams that didn’t make a big splash in the freeagent waters this month may be disappointed, but many should be grateful their clubs didn’t get caught up in the hysteria. No matter how much off-season buzz it might create, the return is not always worth the investment.
Perhaps, during the next round of collective bargaining, the players shouldn’t fight the league so hard. It doesn’t matter what the owners ask for in terms of concessions to control their own behaviour. In the end, many teams will still overpay and over-commit and find ways to skirt the objective of controlling player compensation, and players like Clarkson and Lecavalier, who is now getting paid by two different teams to play hockey, will reap the benefits.