Contract Quick-Fixes and why Larry Bird isn't in the NHL

As the current Collective Bargaining Agreement between the NHL and the NHL Players' Association creeps steadily toward its own expiration date while fans, bloggers, players, and teams alike try to make sense of what impact it's had on the sport of hockey, there's a fantastic breadth of ideas centered around the one common topic that something will certainly have to change for the sport's biggest league.  Smaller hockey markets continue to struggle while the league's big-market clubs grumble about paying to prop them up.  The Players' Union remains without a leader and seemingly without a direction in a time where the first battles of the new Collective Bargaining process war are already being fought. 

The Kovalchuk decision, the upcoming demotion or exportation of Cristobal Huet and the league's subsequent threats about reviewing current contracts have made it perfectly clear that among the issues to be discussed is the way individual player contracts are considered not only for length, but for salary cap hit and for permanency status.  While nobody is absolutely sure exactly where the league will fall on the side of each of these issues, since two years is plenty of time for a rift to form between hockey's self-sustaining teams and the struggling revenue-sharing-receipt-needy clubs, it's generally agreed that the league will side on contract limits, stricter cap hit rules, and if possible, the end of guaranteed contracts in hockey (which would probably make the contract limit discussion moot). 


I've seen a lot of talk out there about ideas for contracts; some of these ideas are good, others bad.  I thought I would address some of the more common ones I've seen out there and what kind of impact they'd really have in a salary-capped NHL world.  

The Larry Bird Rule/Franchise Tag - Slight variations on the same concept: A player with a lot of value to a team has an exception built into his contract that makes it so that the dollars paid him do not count against the cap.

The Good: Teams are allowed to keep the players that they spent the time developing into stars without the fear that another club will come along and poach that talent.  Antti Niemi might still be a Blackhawk and Mikael Samuelsson would still make Dan Cleary flinch every time he winds up for a slapshot.
The Bad:  While in theory, this lets teams pay their stars what they deserve while keeping enough talent around them to compete; in practice, this would likely lead more to an increase in mercenary behavior than what's currently in place.  On the back of all of the players willing to settle in one city for an organization they love, you'd have a group of mid-level talents soaking up a majority of that extra cap space trying to get their paydays while the getting is good.
The Reality: When was the last time a member of a team's core actually went on to sign elsewhere?  Crosby, Ovechkin, Datsyuk, Zetterberg, Malkin, Toews, and Kane all signed deals at varying levels of hometown discount before they became UFAs.  The Sedins became UFAs and then signed back with their hometown team.  Right now Anaheim and the Rangers are having trouble getting their core guys, Bobby Ryan and Marc Staal (both RFAs) signed, but Anaheim's issue isn't about cap space and the Rangers' issue is more about Glen Sather being terrible at his job.  Considering both of them are RFAs and the teams will get compensation if those guys end up elsewhere, I'd say the current setup makes it fair.

The Luxury Tax - A simple-yet-elegant solution to the idea that the big clubs should get to spend their big money on big talent.  The Salary cap becomes a simple suggestion to the proletariat among the purveyors of puck.  For every dollar a team spends over a certain amount, they are taxed an additional dollar that goes toward revenue sharing for the less fortunate.

The Good: None of that pesky small-market team business gets in the way of a bunch of rich guys who set the price of talent in the NHL and now want to simply purchase more of it because they can.  The small teams are happy because they're the ones who benefit from those dollars.  Sure, they have more trouble competing than they do now, but at least everybody's making money, right?
The Bad: The NBA has a luxury tax and is barreling towards a work-stoppage faster than Darren Helm on meth.  Estimates of how many NBA teams are actually earning money range from 10 to -5.  Keep in mind, thanks to their television deal, this league pulls in about a billion dollars more per year than the NHL and their salary cap is pretty close to the same, yet many of their teams are struggling and the on-court product is the most questionable in regards to quality and integrity among all the major sports.  Is this the league we want to take ideas from?
The Reality: Half the reason for the current lockout wasn't so the small teams could keep up with the big guys, but rather so the big guys wouldn't bankrupt themselves in egomaniacal pissing contests with one another to show who could spend the most.  Besides, compared to the NBA, the NHL already has something of a soft cap.  Basketball's cap is based solely on the average club's revenue, while hockey's tacks on an extra $8M to that figure to make the current cap. Finally, remember that players are guaranteed a percentage of revenue.  If you dump extra money into their salaries without increasing revenues, it's all going to come back in escrow anyway and the players are going to be angry.  A possible solution would be to count money paid into the luxury tax pot as hockey-related revenues, therefore increasing the players' share, but that doesn't do anything to solve the possible bankruptcy of the large clubs by incompetent management.  Let's face it, it would be a huge problem for the NHL if the Bruins went belly-up; much bigger than if the Panthers cease to exist. Giving the Wings enough leeway to spend where they should be able to spend also gives teams who aren't as well-managed just enough rope to hang themselves with.

Modified Contract "Guarantees" - While I haven't seen a single hockey fan say that the league should do away with guaranteed contracts (although I'm sure there are some out there who think that), I have seen a bit of talking about how it would be nice if teams and players could restructure deals.

The Good: I'm sure that right now, Cristobal Huet might be completely willing to take a pay cut from the Blackhawks to avoid being relegated to an inferior league.  Huet would have control over the process so he wouldn't outright be a free agent, but rather would have the choice to negotiate a contract that would make him worth his own talent to an NHL club (although I'm not sure exactly how you talk a guy down from $5.6 million to room and board).  Doing this would allow some teams and players to fix their own mistakes and move on.
The Bad: Part of what I like about hockey is that our offseasons are not filled with questions as to whether a specific player is actually going to attend training camp or stories about a team dangling a player to get him to take a pay cut.  Allowing teams and players to amicably agree to change contract terms also allows them to do it significantly less amicably.  Contract holdouts stress everybody and tend to leave a bad taste.
The Reality: For every one situation where it worked out best for everybody, you'd have ten where there's a guy who's going to hurt his team until they come to the bargaining table with the money he feels he should be making.  Leave creating more problems than you fix to well-intentioned politicians and Hollywood screenwriters who lean on deus ex machina to get themselves out of plot corners.

Changing How Cap Hits are Calculated - This one is split into two camps.  On the one hand is the very simple argument that the cap hit should equal the salary for that year; on the other hand is the High-3 idea where, regardless of the contract's length, a player's cap hit is equal to the average of the highest three years for pay.

The Good: This would close the creative loophole that big-spending teams use to artificially lower cap hits.  With either of these rules in place, the issue of contract length limit might disappear entirely, as teams can no longer "tack on" useless years at the end of a contract where a player is expected to retire and cancel his cap hit.
The Bad: Takes away a certain level of security for players who may deserve it and who may view lifetime contracts as a reward rather than a trick.  Creates less flexibility for keeping home-grown stars
The Reality: I lean more towards the idea that the cap hit should be calculated as the salary for that season.  While it takes away the flexibility of creative accounting, it doesn't take away the concept of lifetime contracts like the High-3 rule would do.  Under a 1-year rule, you could sign a guy for 12 years and he'd have a different cap hit every year.  Under the High-3 rule, there's less incentive to sign a guy to a lifetime contract, knowing that there's no cap relief in the later years if there's a salary drop-off.  Interestingly enough, this has just as much potential to turn the players into the two separate groups of the home-grown guys and the mercenaries as a Larry Bird Exception would. Perhaps a hybrid idea where a home-grown talent's cap hit is calculated under the current system and a "mercenary" is calculated under a year-by-year system would work.  It is convenient to note that the two biggest problem contracts for the league were Kovalchuk's and Hossas, two mercenary deals, while Franzen's and Zetterberg's are the most rational and legal among comparable contracts.

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