Long Term Contracts - Good Idea? Bad Idea?

Discussion in 'The Business of Hockey' started by abracanada, Jul 29, 2006.

  1. abracanada

    abracanada Registered User

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    Hemsky signing for 6 years looks good now. And it does have some benefits. These long term deals make it a lot easier to move players, that is for sure. Thing is, will the salaries continue to escalate the way they have? I suspect not. Very easy to get tied in at exactly the wrong time.
     
  2. MrMastodonFarm*

    MrMastodonFarm* Registered User

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    Obviously you have to judge each contract on their individual merits, but the majority of them I don't like. In a capped world you limit alot of your options when you sign a guy to a 7+ year/5+ year deal. We won't see the ramifications right away, but in 2-3 years we are going to see a huge mess when it comes to the teams that have bad long term deals.
     
  3. Fugu

    Fugu Guest

    From a players' perspective, I think longterm contracts are bad for one reason alone. Escrow.

    The cap may go up a few more percentage points over the lifetime of this CBA, but the warning signs are already out there. I looked over commitments teams have made thus far, and it does seem like a solid majority will be spending over the midpoint. Just how far over remains to be seen, but if that trend continues, guys who signed last year or who gave up $$$ for term will end up with less than player's who got a lift from the cap going up and who did not trade term for dollars. The beauty of linkage is that it shifts around where the money goes, and it goes from the pocket of one player into the pocket of another.

    From a team's perspective, it may be wise to lock a good player into a longer term deal especially if the belief is that the cap will increase again. There is a delicate balance though of just how longterm to go. Losing flexibility with your roster especially to longterm deals given to older players may be really painful. And as noted in the previous paragraph, if more and more teams eat up their own cap space, moving guys will become harder and harder if it ever should come to that.
     
  4. Street Hawk

    Street Hawk Registered User

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    Age and injury

    A young guy like Hemsky, drafted in 2001, so in 2006, he's only 23 years old, so this 6 year deal takes him to age 29, which is pretty good. Compare this to the 7 year deal that Elias (drafted in 1994, which makes him 30 in 2006), got, which takes him to age 37, might not look so good if Elias isn't producing after age 35.

    Hemsky has put up enough numbers that his 4.1 million dollar per year cap hit isn't too bad. Even if he just produces what he did last year, the deal is going to be good for the Oilers. If Hemsky learns to shoot the puck more he could be a 90 point guy, and for 4.1 million, that is outstanding value, given that the Oilers bought out 2 years of UFA.

    For the Devils, Elias will continue to produce for the next few years. But, what will his production be when he's 35-37? We've seen Sakic, who is 7 years older than Elias, point production drop off a bit, but still pretty good numbers. If Elias can perform at that kind of clip in the last 2 years of his deal, then it's a good deal for the Devils.

    I have to say, I was shocked that Hemsky got a 6 year deal, from a player's point of view. Most guys in his situation would have taken a deal that got him to UFA or at the very least good more money to give up 2 years of UFA.

    Long term deals are not bad if you sign someone under 30, so with the new UFA age down to 27 soon, then locking up a 27 year old for 6 years until they are 33 is very good for a team, because you've seen what the player has done for the past several years and that player is hitting his prime at 27.

    Be weary of long term deals for guys that are 30-32.
     
  5. GSC2k2*

    GSC2k2* Guest

    Long term deals are almost always good for the player.

    It is guaranteed money, even if you are hit by a bus.
     
  6. Fugu

    Fugu Guest


    And in your opinion, when aren't they? See, you did leave an opening... almost... which is quite uncharacteristic of you, btw.
     
  7. Street Hawk

    Street Hawk Registered User

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    Breakout...

    It's not in the player's favour if they suddenly break out. I mean, take Hemsky, if he turns into a 100 point player every year after year 2 of the deal, he'll consider himself underpaid for the final 4 years of the deal.

    That's why I was surprised to see Hemsky sign for 6 years instead of going for 4 so that he would hit UFA at age 27 instead of 29. 4 years is a long-term deal IMO.
     
  8. Poochie_D

    Poochie_D Registered User

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    I'm not crazy about them but I'm sure everyone can agree on me with this: The Long term contracts which were signed last offseason look alot better then the ones this season.

    I remember thinking how bad Alex Kovalev for 4.5M looked. Now it looks like a gem of a contract. Even Saku at 4.75M and Tomas Kaberle at around the same thing looks amazing.
     
  9. arrbez

    arrbez bad chi

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    Exactly. Everyone was ripping the Leafs for signing Kaberle to $4.25 or whatever, but that price looks great now compared to some of the deals that have been signed during free agency (hell, the Leafs just signed Kubina for $5).
     
  10. Spawn

    Spawn Registered User

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    Depends on the players age really, if the player is alittle long in the tooth, then you can really screw yourself with such a long contract, but if the players a young sure bet producer, than the longest possible is what they need (Crosby for 10 years anyone would take that, but they wouldn't take Jagr for 10 years)
     
  11. Jonjmc

    Jonjmc Registered User

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    There is very little risk for the player with these long term deals, unless as was mentioned earlier they have a real breakout season and turn into a top 10 scorer. The risks for the teams are many and great. What if the cap goes back down to 39 mil again. Players that were signed for over 6.8 (the max under this scenerio) would still be paid whatever their contract is.... for example Chara would still be paid 7.5 even if the cap dropped to 39... or lower. I believe its much more likely that the cap goes down over the rest of the current cba than it goes up.... many things factor into this, the disparity of large and small markets still, the initial excitement of getting hockey back, the horrible television deal with OLN, the lack of any meaningful revenue sharing... the list goes on and on.

    I've posted this thinking before but I believe it bears repeating... the owners and GMs still havent figured out how to operate in a capped league, they will... after its too late for them.

    Buffalo seemed to be the poster child for the small market team this year, but even they didnt get it right. They will now have to trade, let go, move in some manner a few of the players that helped them in the cup run this year.... or increase their self imposed cap and lose money.
     
  12. GSC2k2*

    GSC2k2* Guest

    A Sidney Crosby signing a long term deal for less than the max, for example. A player of that obvious promise would be better off insuring himself out the wazoo and taking a short term deal (such as has been done in the NBA by the current crop of max-level players like James, Wade, Anthony and Bosh). Other players of less promise would find it difficult to insure themselves against loss of earnings which the insurers would assess them as having no hope of attaining.
     
  13. CREW99AW

    CREW99AW Registered User

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    It depends on whether you're getting the player to sign a team friendly deal.Is he taking the security over a longterm deal over fighting for every dime,maybe testing the market?
     

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