No, the new CBA won’t limit contracts to five years

Friedman: Ditching long-term contracts is a bad idea | ProHockeyTalk

There’s talk of shortening up contracts to help cut down on the salary cap circumventing deals as the players and NHL negotiate a new CBA. Elliotte Friedman of CBC postulates that cutting out the long-term deals would be a bad idea because they won’t benefit the players or the teams they’re meant to help out.

[...] Friedman hypothesizes what it would be like if the maximum length of a contract was five years.

Ryan Suter is 27. Zach Parise is weeks away from 28. Shea Weber will be just shy of 28 when he (tentatively) hits free agency next summer. Evgeni Malkin will be 26 when (under current rules) the Penguins can begin negotiating an extension with him.

[...] With the current “super contracts,” you can take less money on the back end to help your team’s cap situation. With a five-year maximum, you can’t. None of those guys is going down to $1 or $2 million at age 31 or 32 — nor should they. It’s completely unreasonable to expect the league’s best players to do that, especially in a sport where one big hit can ruin your career.

I think it’s a pretty sure thing that they won’t try to limit contracts to five years, or anything close to that. Because it’s obvious what would happen: if you’re a superstar UFA, at age 26, and you know you’re going to have to get a new contract when you’re 31, you will insist on the maximum for each of those five years, and take your discount in the next deal. When the Crosby player of each crop gets his big UFA contract, it will therefore be maximum allowable salary for five years. There would certainly be no incentive to take less money (the injury issue) and none to take a shorter term (except in cases when the player isn’t sure if he wants to stay with his team, or wants another year to prove his worth — the same issues as we see currently). But the effect of a limit on length (at least one as short as five years) would be to send cap hits for star players skyrocketing.

Making matters worse, deals with monster cap hits and big cash do damage to the smaller markets.

I think you’ve got that backwards. Cap-circumventing mega-term deals are great for the big markets and terrible for the small ones, because the big ones have the cash and the small ones don’t. The mega-deals make it possible for big market teams to spend big when the cap in theory should be leveling the playing field. When cap hits are closer to actual salary, it benefits the small markets, because the whole point of the cap system is that everyone is on the same budget.

It’s not “deals with monster cap hits and big cash” that hurt the small markets. It’s deals with artificially low cap hits relative to “big cash” that hurts them. Because they don’t have the big cash.

And there’s another problem with suddenly limiting all contracts to five years. It gives an unfair advantage to the players with the contracts that are grandfathered in. Teams won’t sit still for a CBA that does anything significant to change the cap advantages of their already signed cap-sneaky deals. And the union won’t like it either, because it would take huge chunks of change out of the pockets of its clients (as it stands, all this cap-circumventing results in the teams being allowed to give more money to the players than they would otherwise be allowed to — the union likes higher salaries for its big players; it’s not going to give that money back or negotiate itself out of that money in the future).

Whatever the new CBA does to put the damper on the “big tail” contracts, it’s going to have to be with an eye toward incremental change. Off the top of my head, I expect:

  • Contracts for players under the age of 35 will not be allowed to take the player past 40, and maybe that number should be lower, 37-ish.
  • There will be some kind of tail-to-dog ratio rule. Something that limits, for example, the top paying 4 or 5 years of a deal to a certain percentage of the lowest paying 4 or 5 years of the deal.
  • I would also think about some kind of “low to high single year” ratio. Something that says, for example, that the lowest salaried year of a contract can’t be smaller than (10%?) of the highest salaried year. Kovalchuk’s rejected contract had a high of $10-11MM and a low of $500K, if memory serves, which is around 5%.
 

  1 comment for “No, the new CBA won’t limit contracts to five years

  1. m_and_m
    July 9, 2012 at 8:14 AM

    Off topic but on your depth chart, where is Clifford?

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