Is this perceived 'market value' notion flawed?

[BodaciousBeefBazooka]

I personally think the market value notion is flawed in the NHL currently. Despite caphits going up every year by 'X' amount I think RFA's and their agents are starting to take adavantage of this and some Gms are desperate to retain certain players and are willing to pay them. I'm going to use an example of a player on the Maple Leafs right now that is an RFA (I am sure most know who I am talking about) He is asking for 7 million a year and quite frankly I dont believe he is worth 7 million. Just because some GMS are desperate to retain certain player(s) because they dont have the depth and/ or firepower up front. The GM doesnt want to potentially lose a player so they pay them handsomely. They essentially 'break the system' as some refer to here and other RFAs see this and want to cash in on high salaries because they figured 'hey, this player got this amount, so I'll try and get that amount as well' as an example. I think kyle Dubas deep down knows the leafs dont have depth and scoring issues up front so he doesn't want to pay out a perceived 'market value' price. What do y'all think about this?

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[VoluntaryDom]

All I can say is Chiarelli ruined market value for RHD via trade eh Larsson and for F RFA’s like Draisaitl.

 

[BodaciousBeefBazooka]

All I can say is Chiarelli ruined market value for RHD via trade eh Larsson and for F RFA’s like Draisaitl.

He was the gm I was hinting about in my thread who is desperate that broke the system.

 

[Lunatik]

I'm not sure how it was flawed, it's evolved as the league has gotten younger.

 

[tucker3434]

Guess it’s time for a new lockout.

 

[Brock Radunske]

All I can say is Chiarelli ruined market value for RHD via trade eh Larsson and for F RFA’s like Draisaitl.

He was the gm I was hinting about in my thread who is desperate that broke the system.

Yep. The Oilers ruined the RFA market, the trade market and the lottery system.
Quite the operation they run out there.

 

[Howie Hodge]

Your top players, and players perceived to be approaching said status are getting paid the big bucks. You build around star players.

Your bottom roster players are now getting the scraps.

Higher percentage of cap going to fewer players.

Simply the sport mirroring how the other major sports have been dividing up their respective payrolls.

Always going to be hits and misses as to who should be well paid.....

 

[ConnorMcMullet]

Yep. The Oilers ruined the RFA market, the trade market and the lottery system.
Quite the operation they run out there.

The RFA market is not what's messed up - it's the UFAs. Call Draisaitl overpaid as much as you want, it is still MUCH better value than pretty much every other UFA that has signed recently. Draisaitl is worth way more than 1.5 million more than Evander Kane and JVR. Even Tavares is not worth 3 million more than Drai, and he took a 3 million pay cut to play in Toronto (he was offered 14 by SJ).

 

[KingsFan7824]

All value is flawed because every player isn't a UFA every July 1st.

 

[WJCJ]

The salary cap has roughly doubled in 10 years, players salaries have followed fairly close behind. $7 million now is equal to approximately $3.5 million 10-11 years ago, if this keeps up the same percentage of the cap is going to be over $9 million in 3-4 years.

What I am trying to say is that is that market value also is connected to the percentage of the salary cap, you can't get too wrapped up in the dollars without looking at what the percentage of the cap space it takes up. It is changing rapidly year by year. Every new season has new salary rules so far.

 

[hotpaws]

market value is subjective so if Nylander's market value is lower in Toronto than he believes and they can't come to an agreement then Dubas should trade him so he can better allocate cap to a greater need

just because we signed JT which pushes Nylander down a peg and we are now cap strapped doesn't mean Willie has to accept a below comparable deal to accommodate the team especially since he has no guarantee the team won't trade him

also as has been said endlessly no one knows what is being asked/offered so placing blame on one side or another is foolish

and just to add , throwing out a players demand even if true without also saying what term he's basing his demands at is just trying to paint the player as greedy since what they're asking would vary greatly depending on term

5/6 yr term - ufa at 27/28 - 6's

7/8 yr term - ufa at 29/30 - 7's

imo the older he becomes a ufa the less he'll probably be offered on his next deal and the more he'll ask for on his present deal

 

[NotProkofievian]

Mmmmm nope. The term ''market value'' is self referential, and therefore tautologically true. If a value was arrived at through a market process, it's market value. Assets tend to flow to those who value them most*.

*under a variety of assumptions of little interest here.

 

[hotpaws]

The RFA market is not what's messed up - it's the UFAs. Call Draisaitl overpaid as much as you want, it is still MUCH better value than pretty much every other UFA that has signed recently. Draisaitl is worth way more than 1.5 million more than Evander Kane and JVR. Even Tavares is not worth 3 million more than Drai, and he took a 3 million pay cut to play in Toronto (he was offered 14 by SJ).

so SJ's rumored offer went up from 13 to 14 , another month and it'll be he turned down 16m , lol

Overall i agree with your post and in a perfect world i'd much rather overpay a player coming off his elc since he has his entire prime in front of him than a ufa when chances are he will decline before his contract ends . This being said , players coming off there elc don't have anywhere near the leverage ufa's have and retaining a key player or adding a free asset at just the cost of cap space is sometimes the price to become/remain competitive

there's no perfect answer , it just comes down to the situation individual teams are in

 

[BodaciousBeefBazooka]

there's no perfect answer , it just comes down to the situation individual teams are in

Yeah this could be it.

 

[Echo Roku]

This is simply how salaries increase in this league. If players didn’t push for higher wages at their role, then everyone would be paid around the same amount they were when the salary cap started

 

[tarheelhockey]

The idea of market value is fine.

The problem is that fans, including the OP, don’t have an accurate idea of what it means.

 

[BodaciousBeefBazooka]

The idea of market value is fine.

The problem is that fans, including the OP, don’t have an accurate idea of what it means.

Care to share what your perception and belief of market value is? You didnt explain it in your post. Its a numerical figure a certain player(s) is paid on based on his/there production, intangibles and statistics etc etc. No? IF that 'x' player is paid that 'x' amount other GMs should follow suit and they should pay the same (ball park amount) for similar player 'x' because they have similar statistics, intangibles and production cause a few other GMs did that? For sake of argument, albeit an exaggerated example. If Zach Hyman puts up 20 points and wants 5 million and a GM is dumb enough to pay that for him, a similar player of his caliber will want the same amount because thats what the other GM did on the other team. Makes sense? How exactly is that fair for other teams when its time to re-sign a player?

 

[abo9]

Just because some GMS are desperate to retain certain player(s) because they dont have the depth and/ or firepower up front. The GM doesnt want to potentially lose a player so they pay them handsomely.

I mean, as soon as the player hits UFA he's going where the money will be. As long as GM's have space to "break the market value", its gonna happen.

I'm not a pro of business or anything but if say, Tavares went to UFA this summer and teams all offered $10M, then if I really want Tavares, why would I not give that extra million to help my chances of him signing with my team? Say I work the math for my team and I am currently able to create 14M in cap space, and this contract will not impede my team's efforts in keeping my current players + Tavares is absolutely a piece I want to add to my team is I push for the Cup. Then why would I not offer 14M, which is money-wise more attractive than the 10M other teams have to offer?


RFA's are trickier... I think Nylander's only leverage in this case is sitting out or signing an offer sheet (with the signing team losing a lot of picks)?

I feel the RFA has to give up at some point, but then idk what its gonna mean going forward for future negociations between him and the team

 

[Critical13]

The idea of market value is fine.

The problem is that fans, including the OP, don’t have an accurate idea of what it means.

Agreed.

 

[CDN24]

Care to share what your perception and belief of market value is? You didnt explain it in your post. Its a numerical figure a certain player(s) is paid on based on his production, intangibles and statistics etc etc. No? IF that 'x' player is paid that 'x' amount other GMs should follow suit and they should pay the same (ball park amount) cause a few other GMs did that?

Market value is easy to determine in a free and open market, it is what someone will pay and you see how it works every July 1st. The problem is in the NHL until a player becomes a UFA it is not free or open. Player X is drafted by a team, once he signs an entry level deal that team controls his NHL rights until he becomes a UFA. What leverage does a player have

1) Arbitration (nylander does not have arbitration rights yet)
2) Offer sheet- someone as to offer one
3) Play in another league (europe)
4) hold out.

Once a player gets to arbitartion eligible (usually 4 years of NHL service) then other player comparables come into play. In Nylander's current situation the Leafs can play hardball as he has few options. however the team and the player both have to take a long term view

Team is thinking

1) I can sign him up longterm buying Arbitration eligible years and UFA years- I will pay more now but hopefully less in the future
2) I can play hardball on a bridge deal now and expect to pay more in the future.

Player has the same thoughts

do I want security of LT deal now or will I want a couple of cheap years and really cash in in the future.


Each option has risks for both sides. Fair value is what they ultimately agree to, I would hesitate to call it Fair market value as it is a very restricted market. Team must balance also - do I want to upset a potential star to the point that he wants play elsewhere as soon as he is UFA and also the effect of a long holdout on the team dynamic.

Sure NHL teams could all decide to pay peanuts to guys coming off entry level deals without arbitration rights but that smells of collusion and an anti-trust lawsuit to follow.

Dubas as a wealth of riches talent wise but he does have to find a way to keep everyone happy with limited resources and find some $ to fix his defence. Its a big test for the rookie GM

 

[lomiller1]

"Market value" is whatever someone is willing to pay. Since GM’s are willing to pay it, these contracts are market value by definition. It really doesn’t matter what some other GM paid a different player, if A GM willing to let the player sit they can get a better deal. It’s up to each GM to decide if that makes sense for their team and each player to decide if sitting out makes sense for them.

The situation does tend to favor players a bit because GM’s can be out of a job quickly if an RFA is sitting out and the team is losing. This is where ownership comes in and if they are willing to be patient and take a longer term view or not. If they are willing to stand behind the GM then ultimately the GM has more then enough leverage to get players to sign on their terms.

 

[tarheelhockey]

Care to share what your perception and belief of market value is? You didnt explain it in your post. Its a numerical figure a certain player(s) is paid on based on his production, intangibles and statistics etc etc. No? IF that 'x' player is paid that 'x' amount other GMs should follow suit and they should pay the same (ball park amount) for similar player 'x' because they have similar statistics, intangibles and production cause a few other GMs did that? For sake of argument, albeit an exaggerated example. If Zach Hyman puts up 20 points and wants 5 million and a GM is dumb enough to pay that for him, a similar player of his caliber will want the same amount because thats what the other GM did on the other team. Makes sense? How exactly is that fair for other teams when its time to re-sign a player?

No, market value is what a team is willing to pay. It's literally that simple.

Real life example: I just went on Zillow and in about 30 seconds found a 6488 square foot house in Flint MI for sale at $469,000. Gorgeous house that's on the verge of being a legit mansion. After I wrote that last sentence, I changed the location to NYC and entered the same square footage. To get 6-7000 square feet on Staten Island, you'll drop $2-4,000,000. That's nearly 10 times the price for basically the same house. Why? Because nobody wants to buy a house at any price in Flint MI. It doesn't matter how nice the house is, because there's no market for anyone to buy a house. So the market price for anything, regardless of how nice, is peanuts compared to what it would be in a place where people are scooping up anything they can find. That is what market value means.

Back to hockey: If there were 300 players as good as Zach Hyman on the market, he would be lucky to get a minimum level contract. There are only so many roster spots to go around, and there's a good chance that most of those Hyman-level players would be in the AHL or Europe before it was all over. So a GM has absolutely no reason to over-bid for one of them. If Hyman won't take $600K, move on to the next Hyman type guy who will take it. $600K is Hyman's market value.

But if there are only 2 players as good as Hyman on the market, then suddenly there's a massive competition for his services. GMs have the job of making their team better, and 29 of them are in a position to miss out completely on the opportunity. So even if some of those 29 are willing to just walk away and look at other options (trade, development), if even 5 of them are interested in those 2 players, now you have a "race to the top" of the salary scale to see who is willing to overpay the most in order to avoid losing the race. Hyman ends up making $5 million because at least one of those GMs is willing to pay it. $5 million is Hyman's market value.

This can create some really weird dynamics. Say there are 3 good goalies on the market and only 2 teams needing a goalie. There's a strong likelihood that the team with the most money to burn will overpay in order to get the best goalie in that group, even if he's only the best by a little... say that guy gets $5 million. The second team now has their choice of 2 goalies and no real difference between them, so they can afford to sit back and make lowball offers. Whichever goalie is more desperate to have a job will take the lowball offer... say $2 million. The third guy is now out of a job completely and will either take a $1 million backup contract or leave for Europe.

That's more or less what happened with goalies this season. Look at the contracts signed by these guys, who are basically on a level with each other:

July 1:
Jonathan Bernier - $3 million
Cam Ward - $3 million
Jaro Halak - $2.75 million
Carter Hutton - $2.75 million
Anton Khudobin - $2.5 million

So the market value of a low-level starter/high-level backup goalie is $2.5M-$3M, yes?

But look what happens two days later:

July 3:
Robin Lehner - $1.5 million

Why was Lehner's market value literally half what his peers made 2 days earlier? Because by the time he signed his contract, almost everyone had signed their goalies already and there was nobody interested in spending lots of money on one. So Lehner, who is every bit as good as Bernier and Ward, will make half their salary.

Conclusion: Market value is nothing more than what a GM is willing to pay for that player at that moment, and their willingness to pay is driven by supply and demand.

 

[BodaciousBeefBazooka]

No, market value is what a team is willing to pay. It's literally that simple.

Real life example: I just went on Zillow and in about 30 seconds found a 6488 square foot house in Flint MI for sale at $469,000. Gorgeous house that's on the verge of being a legit mansion. After I wrote that last sentence, I changed the location to NYC and entered the same square footage. To get 6-7000 square feet on Staten Island, you'll drop $2-4,000,000. That's nearly 10 times the price for basically the same house. Why? Because nobody wants to buy a house at any price in Flint MI. It doesn't matter how nice the house is, because there's no market for anyone to buy a house. So the market price for anything, regardless of how nice, is peanuts compared to what it would be in a place where people are scooping up anything they can find. That is what market value means.

Back to hockey: If there were 300 players as good as Zach Hyman on the market, he would be lucky to get a minimum level contract. There are only so many roster spots to go around, and there's a good chance that most of those Hyman-level players would be in the AHL or Europe before it was all over. So a GM has absolutely no reason to over-bid for one of them. If Hyman won't take $600K, move on to the next Hyman type guy who will take it. $600K is Hyman's market value.

But if there are only 2 players as good as Hyman on the market, then suddenly there's a massive competition for his services. GMs have the job of making their team better, and 29 of them are in a position to miss out completely on the opportunity. So even if some of those 29 are willing to just walk away and look at other options (trade, development), if even 5 of them are interested in those 2 players, now you have a "race to the top" of the salary scale to see who is willing to overpay the most in order to avoid losing the race. Hyman ends up making $5 million because at least one of those GMs is willing to pay it. $5 million is Hyman's market value.

This can create some really weird dynamics. Say there are 3 good goalies on the market and only 2 teams needing a goalie. There's a strong likelihood that the team with the most money to burn will overpay in order to get the best goalie in that group, even if he's only the best by a little... say that guy gets $5 million. The second team now has their choice of 2 goalies and no real difference between them, so they can afford to sit back and make lowball offers. Whichever goalie is more desperate to have a job will take the lowball offer... say $2 million. The third guy is now out of a job completely and will either take a $1 million backup contract or leave for Europe.

That's more or less what happened with goalies this season. Look at the contracts signed by these guys, who are basically on a level with each other:

July 1:
Jonathan Bernier - $3 million
Cam Ward - $3 million
Jaro Halak - $2.75 million
Carter Hutton - $2.75 million
Anton Khudobin - $2.5 million

So the market value of a low-level starter/high-level backup goalie is $2.5M-$3M, yes?

But look what happens two days later:

July 3:
Robin Lehner - $1.5 million

Why was Lehner's market value literally half what his peers made 2 days earlier? Because by the time he signed his contract, almost everyone had signed their goalies already and there was nobody interested in spending lots of money on one. So Lehner, who is every bit as good as Bernier and Ward, will make half their salary.

Conclusion: Market value is nothing more than what a GM is willing to pay for that player at that moment, and their willingness to pay is driven by supply and demand.

Gotcha! makes sense! Close thread! lol

 

[Sugi21]

He was the gm I was hinting about in my thread who is desperate that broke the system.

Even before Chiarelli Oilers management we’re handing out big extensions to RFA’s in Hall, RNH and Eberle all getting $6 million a piece. $6 million doesn’t seem like much now but at the time they signed that was a good chunk of change. The argument is had they earned that big RFA deal?

 

[GirardSpinorama]

Care to share what your perception and belief of market value is? You didnt explain it in your post. Its a numerical figure a certain player(s) is paid on based on his/there production, intangibles and statistics etc etc. No? IF that 'x' player is paid that 'x' amount other GMs should follow suit and they should pay the same (ball park amount) for similar player 'x' because they have similar statistics, intangibles and production cause a few other GMs did that? For sake of argument, albeit an exaggerated example. If Zach Hyman puts up 20 points and wants 5 million and a GM is dumb enough to pay that for him, a similar player of his caliber will want the same amount because thats what the other GM did on the other team. Makes sense? How exactly is that fair for other teams when its time to re-sign a player?

If you dont feel like a hyman level player isnt worth 5 mill, you dont pay him. No one is forcing you to. It does not matter what another GM does. The market corrects itself and the cap is limited. If we have Gms all spending massive cap percent on bad players while you are the efficient one, chances are you will step up ahead.