Wednesday, June 19, 2013

The Risks Of This Year's Free Agent Class

It's mid-June, which means two things:  two teams most of us don't care about are playing for the Stanley Cup, I guess, and free agency is about to get underway.  For the non-game-watchers (who I now dub the Corsiati), free agency is an ever-entertaining-spectacle, as teams foolishly outbid each other for mid-range talent that they then trade to one another halfway through the contract.  It's a game of blind musical chairs where the winner is the person outside the circle laughing at the people playing.

This year is different from all others in the salary cap era in that the cap is actually falling.  While few teams treated the $70.3 million salary cap like a real figure last off-season, it's still going to put a strain on the dollars available this season.  We only need consult capgeek to see how this $64.3M cap will affect clubs - 6 teams are already over $60M, and only 6 are currently below next year's $44M floor.  We know there are compliance buyouts coming, but while those do increase the amount of room available, they also increase the number of free agents in the pool.  In addition, some big spender teams that appear to have a lot of room, like the Rangers, have to re-sign most of their core players this year or next, which will no doubt strain the budget.

The wags have already weighed on the free-agent signings that have taken place so far - Sergei Gonchar at 2 years and $10M and Mark Streit at 4 years and $21M - stating that the 'market has been set' and that prices will explode.  The trouble with these deals is not so much the money as it is the years.  Gonchar is 39, turning 40 at the end of next season, and Streit is 36 in December.  While both played at a high level this season, it's not hard to see Father Time creeping up on them (neither appeared to drive play at ES this year).  First, a dispelling - there's no reason for a player traded to a new team before signing a contract, as Gonchar and Streit were, to give that team a discount.  Gonchar was only dealt for a conditional pick, but Streit was traded for a non-refundable pick (and a non-prospect).  In fact, in Streit's case, it's a reason to drive a harder bargain.  We've seen contracts like this in the past with Ehrhoff, Bryzgalov, and Wideman - they do not seem to be discounts.  They seem to be overpays based on the fact that a team 'had' to have this player. (I know, I know, Ehrhoff was terrific this year, he's still signed for 8 more years).  So let's dispense with the talk that these contracts have somehow 'set the market' - they've done no such thing.  Ian White and Marek Zidlicky will get contracts based on what other teams are willing to pay them, not what they themselves demand to be paid as a result of Gonchar and Streit's deals.  However, there's another way in which these contracts do appear to set a kind of market for the deals to come - the money isn't totally outrageous, but the number of years are.  That's the kind of market it figures to be.

There's not a lot of money available in free agency and it's thought that the salary cap will go up in future seasons.  What can teams offer to outbid one another?  Absent a state or province with no income tax or the chance to play for a contender, there's not much - except years on the contract.  It will not be dollars per year that necessarily determine who goes where, it'll be how many years a team is offering.  And indeed, with a rising salary cap, why not take the risk that Mike Ribeiro will be productive at 36?  Won't his cap hit just be the NHL average by the time the contract ends?  Isn't medical science always advancing?  So on July 5 when your team appears to have landed a 'bargain' compared to years past, make sure to check the number of years on the deal - those July fist-pumps could easily curdle into an endless checking of capgeek's buyout calculator by the time 2015 rolls around.

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