Rookie Contract and Injury Compensation Q's - Toews decides to play NCAA

[kurt]

I have a few questions related to Toews' decision to remain in the NCAA this season, rather than playing AHL hockey under contract with the Blackhawks organization. From what I understand, Toews turned down a 900K+ contract to return to
college hockey.

However, I have a couple questions, related to insurance compensation for injury, and the salary cap and entry-level contracts:

1. I understand it may be better for his development (though I'm sure the AHL wouldn't really hurt his development either), but what if this kid suffers a career-ending injury this season? Is there any impact on his level of compensation for this player if he's not under contract?
2. I understand the new CBA has restrictions on entry-level contracts, restricting players' (such as Ovechkin, Crosby, Phaneuf, Malkin, etc) ability to earn their true market value until after a few years in the league. If a player like Toews elects to wait a year before signing a contract, does that further prolong his opportunity to earn a higher salary in the NHL?

If the answer to #1 is 'yes', and the answer to #2 is 'yes', why would a prospect decide not to sign?

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[kdb209]

I have a few questions related to Toews' decision to remain in the NCAA this season, rather than playing AHL hockey under contract with the Blackhawks organization. From what I understand, Toews turned down a 900K+ contract to return to
college hockey.

However, I have a couple questions, related to insurance compensation for injury, and the salary cap and entry-level contracts:

1. I understand it may be better for his development (though I'm sure the AHL wouldn't really hurt his development either), but what if this kid suffers a career-ending injury this season? Is there any impact on his level of compensation for this player if he's not under contract?
2. I understand the new CBA has restrictions on entry-level contracts, restricting players' (such as Ovechkin, Crosby, Phaneuf, Malkin, etc) ability to earn their true market value until after a few years in the league. If a player like Toews elects to wait a year before signing a contract, does that further prolong his opportunity to earn a higher salary in the NHL?

If the answer to #1 is 'yes', and the answer to #2 is 'yes', why would a prospect decide not to sign?

1. Yup. He get's a career threatening or ending injury - he's screwed. He might be able (on his own) to get some insurance coverage, if he returns to UND. If he signs an ELS contract, he has that 3 yrs of salary guaranteed - actually only the signing bonus and two-way AHL salary would be guaranteed (unless he got injured while on the NHL roster, then his full NHL salary would be guaranteed).

2. Yup, again - sort of. For someone signing their ELS contract at ages 18-21 yo, the ELS is for 3 years - with one big caveat. A player who signs his ELS SPC as an 18 or 19yo and plays less than 10 games in the NHL, has his ELS contract extended an extra year. So, even if Toews had signed this year (as an 18 yo) and played mostly in the AHL (less than 10 games with the Hawks), his contract would not age - it would be extended for a year. From that perspective, it would be no different than if he stayed at UND and signed next season.

 

[kurt]

1. Yup. He get's a career threatening or ending injury - he's screwed. He might be able (on his own) to get some insurance coverage, if he returns to UND. If he signs an ELS contract, he has that 3 yrs of salary guaranteed - actually only the signing bonus and two-way AHL salary would be guaranteed (unless he got injured while on the NHL roster, then his full NHL salary would be guaranteed).

Seems like a bit of a gamble to me, I'm surprised so many players elect to play an extra year of junior or college hockey for this reason alone. I wonder if there have there been any highly touted prospects that have decided to play an extra year of amateur, and suffered such an injury. I certainly wouldn't take the chance.

Plus, I'd be keen on getting paid. I can certainly say the university experience is great, but I'm not convinced the quality of education received while playing varsity sports is exactly stellar, but I'm sure the quality of education differs from program to program, and university to university. Either way, I would put a higher value on an extra year of top prospect salary than I would on a year of college.

2. Yup, again - sort of. For someone signing their ELS contract at ages 18-21 yo, the ELS is for 3 years - with one big caveat. A player who signs his ELS SPC as an 18 or 19yo and plays less than 10 games in the NHL, has his ELS contract extended an extra year. So, even if Toews had signed this year (as an 18 yo) and played mostly in the AHL (less than 10 games with the Hawks), his contract would not age - it would be extended for a year. From that perspective, it would be no different than if he stayed at UND and signed next season.

Jeez, players get shafted at the entry level! Sure, people may say young players have to earn their stripes, but there's no question some generational talents deserve much more than they're permitted to earn. It makes perfect sense I guess, as future prospects aren't union members, and don't get to vote on their contracts. Their loss is veterans' gain. But that's another issue.

Anyhow, the 10-game rule is interesting, and I suppose the mechanism serves well to not discourage players from going back to the amateur ranks for a season or so.

 

[Ted Hoffman]

Jeez, players get shafted at the entry level! Sure, people may say young players have to earn their stripes, but there's no question some generational talents deserve much more than they're permitted to earn. It makes perfect sense I guess, as future prospects aren't union members, and don't get to vote on their contracts. Their loss is veterans' gain. But that's another issue.

Go dig up notes on Alexander Daigle's first contract; that led to restrictions on the maximum salary an entry-level player could earn.

Then go dig up notes on Joe Thornton's entry-level contract; that's why there's restrictions on how much in bonuses an entry-level player can earn.

 

[Buffaloed]

1. I understand it may be better for his development (though I'm sure the AHL wouldn't really hurt his development either), but what if this kid suffers a career-ending injury this season? Is there any impact on his level of compensation for this player if he's not under contract?

There's insurance available for athletes in his position (eg: Peterson International). It's expensive (about $35,000 per $1 million coverage), but it's well worth it for someone in his position to take out a loan out to pay for it. The contract offer from Chicago may even be able to be used as collateral.

 

[kdb209]

There's insurance available for athletes in his position (eg: Peterson International). It's expensive (about $35,000 per $1 million coverage), but it's well worth it for someone in his position to take out a loan out to pay for it. The contract offer from Chicago may even be able to be used as collateral.

Using a contract offer from Chicago, even as collateral, could pose some NCAA eligibility issues.

 

[kurt]

Go dig up notes on Alexander Daigle's first contract; that led to restrictions on the maximum salary an entry-level player could earn.

Then go dig up notes on Joe Thornton's entry-level contract; that's why there's restrictions on how much in bonuses an entry-level player can earn.

Just because GMs sign players to bad contracts, doesn't mean it's fair to impose restrictions on their contracts. In my opinion, these restrictions are in place for very simple reasons:

• Under a salary cap, there is only so much salary available to players.
• Players must vote to ratify a new CBA.
• Current players want the opportunity to earn as much money within the cap structure as they possibly can.
• Prospective players don't vote.

Thus, the interests of entry level players are not protected, and restrictions are in place.

Using a contract offer from Chicago, even as collateral, could pose some NCAA eligibility issues.

Are you serious? And I'm complaining about the NHL being unfair in their treatment of young athletes. What was I thinking?

Are there any examples of top-prospect college athletes (basketball, baseball, football, or hockey) who have elected to forego a year of professional sports in order to continue at the college level, only to suffer a career-ending injury, and not receive insurance compensation that would have been in line with their level of professional earnings?