Welcome to the Real World, Part 4?

Question

You are the owner of a young team full of stars. Next year, they all come due as free agents. Signing all of the free agents will bring you $14MM over the Cap using their current market value.

What would you do to keep your team as competitive as possible?

Lubers and ZapCity
You have the right idea in my opinion. A series of long-term, escalating contracts for your core. This methedology was successful to some extent for the Cleveland Indians in the 90s when they were successful year in and year out.

Bob,
An excellent answer. Some lawyers argue that teams can circumvent the salary cap by frontloading contracts because the 'average salary' is what counts against the cap. So if you are the Rangers, or the Leafs...you can offer a player 5 year contract at $30MM, and front load the first two years at $10MM and the last 3 at 3.3MM. It counts as $6MM the entire time. Small marlet teams may be able to pay the $6MM a year, but not the front loaded $10MM (the $4MM would come from MSG and MLSE's bloated bank accounts)

Answer 1

I'm not 100% sure how the low/high contracts work with the new CBA so I'll probably be messing some things up. I'll also assume that you're talking about restricted free agents, all drafted on the same year and have been playing together ever since, with three year deals and this is the last year (because you didn't clarify....if that matters, my hockey holiness).

Let's give these players names instead of identifying them in a mundane manner like Player A, Player B, etc.: Crosby, Ovechkin, Kane, Phaneuf, Kessel, and Montoya. That's one line and a goalie. Let's also assume that their stats, player traits, strengths, and weaknesses reflect those of their real-life counterparts. I'd trade Ovechkin and Kessel for high draft picks, other high prospect players, and/or a low paying veteran like Roberts or Nolan to provide leadership, or something to build off of. The rest, I'd sign to low/high contracts. Crosby long-term (say, 7 years), Montoya and Phaneuf mid-term (4-5 years), Kane and said veteran for short-term (2-3 years). By the end of the four to five years, I'll still be able to either re-negotiate or execute the option of trading Kane, Montoya, or Phaneuf in order to keep the value of my investment for the same strategy as I did for Ovechkin and Kessel (I'm assuming the veteran will retire on his own accord). As you can see, my strategy here is to build around one player: Crosby. Wow, I stayed up til 1:40am trying to figure this one out.

Megs: the man is asking some extremely good questions about the business aspect of hockey, which makes it a hockey question. It can also be in the business section as well, but who will answer with the in-depth knowledge that this section has?

Answer 2

First of all no team would ever face this situation. There is a blend on all teams of players of different ages which would negate this from ever happening, however being a wily dude with a buck. I'd move my entire number two line and number 3 d man in exchange for as high a draft pick as I can get for each.
Good dmen are rare so don't dump those. So are good goalies. Number two or three line guys are a dime a dozen (so to speak) and if you can realize better financial value then you make the move and keep going.
I'd also do my best to ensure that I never had every contract come up at the end of one season again.

Answer 3

Yes. Definitely evaluate your talent and lock them up to multi year contracts prior to them becoming "superstars". The Pats and The Eagles of the NFL have been doing this for years. NHL GM's are still at the learning curve of this.
Also, a way around that cap issue (for rich teams-NYR-Philly etc) is to front load money to them so the cap hit will be the same but the value of the contract is more. 25 million for 5 years is a 5 million a year hit on the cap but so is 11 million/12 million/ 1 million/1 Million/ 1 Million. Both 25 million dollar contracts at 5 per year on the cap hit but the second one is probably worth MUCH more because he is getting 23 million within 2 years. I would have to think that works out to another 5-10 million for that player.
Beyond that it gets so deep. Having a STRONG front office, and scouting department is so underrated because if you cannot afford to keep everyone, you need good, young and cheap talent replacing them and that falls on the aforementioned.
Buffalo was in a pretty good situation in that they have some up and comers that are cheap to replace some of their lost talent. You always have to think ahead and have a Plan B. You also need a good mixture of youth and talent these days. Look at Anaheim last year, they could afford to bring in some big names because the Getlaf's, Perry's etc were not taking up cap space. They lose Penner because he was too expensive but have Ryan as his inexpensive replacement. Not all good players come from the 1st round and I know the draft is sometimes hit and miss but obviously some teams do better than others.
It can also be said that with losing follows winning. Many teams like the Pens and the Sens are built on losing seasons and high draft picks and in some cases, good draft picks. These are teams that may have problems in the future because of it but not before they probably have some success.
I am sure that for "some" of these guys, it is important to treat them well as an organization and like family. Some will remember it when it come to "home team discounts" and some won't I guess. Comes down to that front office again with making sure they also draft "quality" kids, not just on the ice but off. Crosby could have held out for more but winning is important to him. Martin Brodeur has always given the Devils a home team bargain. These things help.

Answer 4

Megalomaniac: These are questions that are very real in the current NHL. They are very much hockey questions.

Mega: You are entitled to your opinion, but these are far more intelligent and thought provoking questions than "Who is going to win the Stanley Cup this year?", "How does my fantasy team look?" and "What does Habs mean?"

To actually answer this question, I would attempt to sign my players to the longest term contracts possible so that at the end of the contracts, I am under paying. I would look at hiring a "cap-guru" management type, possibly someone with experience in the NFL who is skilled at manipulating contracts to fit these situations.

PuckDat: The Penguins have the potential to be in a similar situation to this example. They have a boat load of young talent, most of whom were high draft picks selected over a few years.

Answer 5

I would trade one 7 mil player for a first round pick, stagger the pay schedule of the second line so their salaries peak at different times. (Assume average salary of 4.25 mil) Example:
year 1, l/w = 2 mm, c = 3 mm, r/w = 5 mm total 10mm.
year 2 l/w = 7 mm, c=2 mm, r/w=3 mm total 12mm
year 3, lw=5mm, c=7mm, r/w =2mm total 14mm
year 4, l/w= 3mm, c=5mm, r/w=7mm total 15mm
First year cap savings 2.75, total still over = 3.25 mm
Trade a 2mm defenceman and structure pay to mid level defence in a similar way.
Hope the cap increase is at least 2 million per year and this will work. Maybe.

Answer 6

Puckdat, the Pens are about to find themselves in this boat. Granted, they may not all be coming to FA status in the same year or without any warning, but in 3 years whomever Pitt keeps from its current crop will be past their entry-level deal. Crosby got his coin. Malkin, Staal, Fleury and Letang will want theirs, as will Esposito.

The solution is credit. Staggering deals to mature in future years, in hopes that the cap figure will rise sufficiently or that trades could be made at a later date. Today's reality is that teams need to define their core nucleus and focus primarily on keeping that intact.

The fact is that you can't keep everyone and need to have succession plans in place within this new NHL. If you face being $14M over, you need to decide which assets are more expendable and secure as many quality players and/or picks for them as possible.

Answer 7

See who you can get early using extensions and let the many players go and replace them with drafted talent.

Answer 8

This is a business question not a hockey question and belongs in another section.

With all due respect Mr Lubers thats my point, there's more interest in the business side of things than the sport itself and as a fan of hockey and not of the modern business world, I'm getting very tired of that.

Answer 9

I would call Mr. Holland, Mr. Nill, and Mr. Devellano, and see what they have to say. Even though you can't consider their team "young".

Answer 10

I hire Jeff as my exective General manager to make the decisions for me.


What? its logical!