The Case for Max Term Deals

[Provost]

There is every possibility that Boeser signs a shorter term bridge deal.  It has been talked about as the most likely possibility.  We also have to decide on term for Petterson and Hughes as soon as next July when we can extend them.

 

While there are pro’s and con’s to shorter deals, I think there are special  circumstances in the league that should push us towards locking up our kids as long as possible.

 

When Vegas came into the league, you suddenly added a high revenue team to the revenue sharing formula with the players.  The league wide cap jumped by a huge chunk based on that extra revenue infusion.

https://www.forbes.com/sites/ryanlake/2018/12/06/nhl-expansion-to-seattle-brings-hope-of-higher-salaries-for-players/#41e6759b2125 

 

After the first year of Seattle, we will be facing another big jump in the cap.  The expansion teams are guaranteed to be high revenue in at least the short term with sold out season tickets, corporate boxes, and media deals.

 

A $7.5 million dollar Boeser salary under an $83 million cap seems fairly rich, 9% of the cap.  Three years from now when the cap is probably around $92 million due to the looming Seattle bump, that is a much smaller percent of the total cap.  

 

We also dont don’t want to be renogotiating with him after a bridge deal under that newly inflated cap world.

 

The same logic should apply to Petterson and Hughes.  Lock them up as soon as we are able to extend them.  We are going  to live or die by these kids anyways and if they don’t turn out to be worth their contracts, we are in the crapper of the league for years anyways rebuilding again... and it won’t matter if they are overpaid as we will be rebuilding again.

 

The cap inflation gets bumped even higher than growth if we ever give up on a couple of the bottom teams like Arizona and let them relocate.  Their new locations would be high revenue teams, so turning the lowest revenue into one of the highest, drags up the whole average and inflates the cap.  It is going to happen eventually, and I would put my money on within 5 years.

Edited June 8, 2019 by Provost

[RRypien37]

Rolling the dice both ways. In all likelihood he continues his goal scoring progression and it would benefit signing him long term now for 6-7 rather than 7-8 if he puts up 40 goals on a short term bridge deal. 

[Provost]

13 minutes ago, RRypien37 said:

Rolling the dice both ways. In all likelihood he continues his goal scoring progression and it would benefit signing him long term now for 6-7 rather than 7-8 if he puts up 40 goals on a short term bridge deal. 

This is entirely aside from his potential development or lack thereof.  That is the point of the above post... it isn’t rolling the dice by signing him long term under this specific set of circumstances where we can be almost certain of a rapidly increasing cap within 3 years.

 

If his production makes him worth $7 million now.  In very short order due to the above circumstances unrelated to his development... that same production will be worth $8 million.  Even if he regresssed under that new cap reality, he would still end up being worth and able to sign a $7 million dollar deal if we had to negotiate with him after a three year bridge.  There is almost no downside risk to signing him long term and only upside.

 

I like Benning as a hockey guy, but don’t have a lot of confidence that he or anyone in the organization are accounting for these types of big vision variables.  This is the sort of thing that Gillis and Gilman would have accounted for... but they were ahead of the curve.

 

 

Edited June 8, 2019 by Provost

[Provost]

I should also add another compounding factor in looming cap inflation.

 

The US TV deal is expiring in two years and is currently being renegotiated.  Based on the massive inflation of rights deals even in the non major sports... the NHL is going to see a massive increase in TV revenue.  That is part of the shared revenue formula with player salaries, so will springboard the cap immediately.... possibly massively.  Moving from $200 million per year from NBC to $500 million dollars per year (likely based on sports TV rights deals recently) on a new deal... that is an immediate $5 million dollar increase to the cap for each team excluding existing normal growth.

 

Imagine what a deal a $7 million dollar deal for Boeser looks like if the cap is $100 million in 3-4 years?  That would be equivalent to a $9 million dollar deal with today’s cap.

 

https://www.forbes.com/sites/bradadgate/2019/01/15/hockeys-big-pay-day-is-coming/#48ae49c44e44

 

Edited June 8, 2019 by Provost

[Nuxfanabroad]

Watch guys like Point & Rantanen get locked in to contracts cheaper than BB's. I'm tired of seeing Cdn teams get hooped with their young talent

 

The BroonGoons have Pastafarian-nak locked in at 6.6. Yet his homely mug is pushing Dunkin Donuts from Boston to Hong Kong. Wouldn't surprise me if it comes out yrs later, these favoured US markets were giving underpaid stars all kinds of illegal kickbacks under the table.

 

Each passing yr, increasingly seeing this cap likely as rigged as the lotto! /end rant(sorry to sidetrack from your idea)

Edited June 8, 2019 by Nuxfanabroad

[luckylager]

Proposition - have @StealthNuck change @Provost's title to "Max Term".

 

Can I get a second on that motion?

[iinatcc]

3 hours ago, Nuxfanabroad said:

Watch guys like Point & Rantanen get locked in to contracts cheaper than BB's. I'm tired of seeing Cdn teams get hooped with their young talent

 

The BroonGoons have Pastafarian-nak locked in at 6.6. Yet his homely mug is pushing Dunkin Donuts from Boston to Hong Kong. Wouldn't surprise me if it comes out yrs later, these favoured US markets were giving underpaid stars all kinds of illegal kickbacks under the table.

 

Each passing yr, increasingly seeing this cap likely as rigged as the lotto! /end rant(sorry to sidetrack from your idea)

Tampa always signing players lower than then value is what baffles me the most. Either Benning is a terrible GM in contact negotiations or Yzerman (back when he was GM) was a genius in contracts 

[Gatorade-]

22 minutes ago, iinatcc said:

Tampa always signing players lower than then value is what baffles me the most. Either Benning is a terrible GM in contact negotiations or Yzerman (back when he was GM) was a genius in contracts 

The reason for this is Tax Related. It's an advantage where the after tax money at 9.5 Mil (For Kucherov for Example) is probably equivalent to another team paying him 11+ mil that doesn't have the tax advantage

[NewbieCanuckFan]

6 hours ago, Gatorade- said:

The reason for this is Tax Related. It's an advantage where the after tax money at 9.5 Mil (For Kucherov for Example) is probably equivalent to another team paying him 11+ mil that doesn't have the tax advantage

Unless you’re Edmonton.

[PunjabiCanucks]

A part of me is down if Boeser signs a bridge deal for 2 years at 6.5-7 million. It will allow us to see if he can stay healthy.

 

The scary part is if he stays healthy, and the Pettersson chemistry allows him to get a 35 to 40 goal season plus get 65-80 points. Then he holds the bargaining chip and could get 8 to 10 mill .

[rawkdrummer]

Go Long!

[Provost]

51 minutes ago, PunjabiCanucks said:

A part of me is down if Boeser signs a bridge deal for 2 years at 6.5-7 million. It will allow us to see if he can stay healthy.

 

The scary part is if he stays healthy, and the Pettersson chemistry allows him to get a 35 to 40 goal season plus get 65-80 points. Then he holds the bargaining chip and could get 8 to 10 mill .

But based on a mathematically certain big increase to the cap... even if he only plays the same number of games per year and has the same point totals... he would still be in line for more than $6.5-7 million dollar contract in two years because that is what 25 goal, 50-60 point guys who miss 15-20 games a season will be making.

There is no downside unless you think Boeser gets markedly worse than he is now.  Even at a little worse, the inflation means a long term deal becomes a good value deal quickly.

I am not sure I am explaining it right so folks are getting it.

 

Under a near flat cap future, long term deals have huge risk.  We know without any real doubt, that the cap will be WAY higher in 2-3 years due to the circumstances noted above.  It isn't a prediction, it is math.  We know the revenue sharing formula, we know Seattle is coming, we know Seattle will be sold out and have well above average league revenues over their first few years, we know the U.S. TV deal is going to be much bigger because we have the history of other recent sports TV deals... it could be even bigger than predictions because you could end up with one of the big streaming services, Amazon/Disney.etc making a play for their first big sports rights like HBO had done with boxing way back.

 

[alt kilgore]

A good point. 

I had put forward the thought before that both sides might feel better served with a shorter bridge deal. Boeser is a young talent on the verge of greatness, who, rightly so, thinks he can be a force in the league for years to come. You'd hope he has that kind of faith in himself. So he'd make a lot more with a higher wage, shorter term now, and then in a couple years when the cap goes up, and he'd have proven himself a top player, he'd get an even better salary stretched out to a longer end of contract date than he would now. And for the Canucks, they would be able to evaluate more what they had, how durable he is, how consistent. And so how much of the pot do they want to invest in him, compared to Hughes, Pettersson, and any other emerging stars at that time.

 

But you raise some good points on retaining value, and getting ahead of the cap rise.  It just takes faith in Boeser.  Its a gamble either way for different reasons. From what I've watched of Brock, yeah,  I'd take the risk and sign long term.

[ItTakesAnArmy]

18 hours ago, Provost said:

There is every possibility that Boeser signs a shorter term bridge deal.  It has been talked about as the most likely possibility.  We also have to decide on term for Petterson and Hughes as soon as next July when we can extend them.

 

While there are pro’s and con’s to shorter deals, I think there are special  circumstances in the league that should push us towards locking up our kids as long as possible.

 

When Vegas came into the league, you suddenly added a high revenue team to the revenue sharing formula with the players.  The league wide cap jumped by a huge chunk based on that extra revenue infusion.

https://www.forbes.com/sites/ryanlake/2018/12/06/nhl-expansion-to-seattle-brings-hope-of-higher-salaries-for-players/#41e6759b2125 

 

After the first year of Seattle, we will be facing another big jump in the cap.  The expansion teams are guaranteed to be high revenue in at least the short term with sold out season tickets, corporate boxes, and media deals.

 

A $7.5 million dollar Boeser salary under an $83 million cap seems fairly rich, 9% of the cap.  Three years from now when the cap is probably around $92 million due to the looming Seattle bump, that is a much smaller percent of the total cap.  

 

We also dont don’t want to be renogotiating with him after a bridge deal under that newly inflated cap world.

 

The same logic should apply to Petterson and Hughes.  Lock them up as soon as we are able to extend them.  We are going  to live or die by these kids anyways and if they don’t turn out to be worth their contracts, we are in the crapper of the league for years anyways rebuilding again... and it won’t matter if they are overpaid as we will be rebuilding again.

 

The cap inflation gets bumped even higher than growth if we ever give up on a couple of the bottom teams like Arizona and let them relocate.  Their new locations would be high revenue teams, so turning the lowest revenue into one of the highest, drags up the whole average and inflates the cap.  It is going to happen eventually, and I would put my money on within 5 years.

Eriksson, Lucic, Neal, Horcoff, Clarkson, just a few of the other side, the bad deals. These type of results mean the long rebuild again.

 

You know i figured it out about being a REAL GM in the league, it isn't doing the day to day hands on operations, that is relatively simple as there are so many speciaists to do the jobs, lawyers for contracts, accounts for balancing the books, assistant GM for meetings, scouts for scouting, a scouting department for drafting, a marketing department to sell tickets, coaches to run the team and fire when it comes time to CYA, HR department to stop the dudes from calling the gals "babes", a media department to screen questions all it really seems to be is being in "the old boys club". If they don't like you then trading becomes hard and they create stupid rules (Luongo) to penalize after the fact.

 

Anyway let Boeser sit out until December or all year if he wants, there should be no playoffs next year yet because the team still needs so many high end players.

 

 

[IBatch]

23 hours ago, Provost said:

There is every possibility that Boeser signs a shorter term bridge deal.  It has been talked about as the most likely possibility.  We also have to decide on term for Petterson and Hughes as soon as next July when we can extend them.

 

While there are pro’s and con’s to shorter deals, I think there are special  circumstances in the league that should push us towards locking up our kids as long as possible.

 

When Vegas came into the league, you suddenly added a high revenue team to the revenue sharing formula with the players.  The league wide cap jumped by a huge chunk based on that extra revenue infusion.

https://www.forbes.com/sites/ryanlake/2018/12/06/nhl-expansion-to-seattle-brings-hope-of-higher-salaries-for-players/#41e6759b2125 

 

After the first year of Seattle, we will be facing another big jump in the cap.  The expansion teams are guaranteed to be high revenue in at least the short term with sold out season tickets, corporate boxes, and media deals.

 

A $7.5 million dollar Boeser salary under an $83 million cap seems fairly rich, 9% of the cap.  Three years from now when the cap is probably around $92 million due to the looming Seattle bump, that is a much smaller percent of the total cap.  

 

We also dont don’t want to be renogotiating with him after a bridge deal under that newly inflated cap world.

 

The same logic should apply to Petterson and Hughes.  Lock them up as soon as we are able to extend them.  We are going  to live or die by these kids anyways and if they don’t turn out to be worth their contracts, we are in the crapper of the league for years anyways rebuilding again... and it won’t matter if they are overpaid as we will be rebuilding again.

 

The cap inflation gets bumped even higher than growth if we ever give up on a couple of the bottom teams like Arizona and let them relocate.  Their new locations would be high revenue teams, so turning the lowest revenue into one of the highest, drags up the whole average and inflates the cap.  It is going to happen eventually, and I would put my money on within 5 years.

Provost you hit the nail right on the head with this post.  Plus teams can lose big when gambling with bridge deals in general when dealing with star quality players see a Subban and see Price, they both bet on themselves and won huge.  Maybe we are paying a one million dollar premium the first couple years, then it evens out and then we are making money on a “team friendly contract “ the rest of the term...

[BI3KSA-]

On 6/7/2019 at 8:54 PM, Provost said:

I like Benning as a hockey guy, but don’t have a lot of confidence that he or anyone in the organization are accounting for these types of big vision variables.  This is the sort of thing that Gillis and Gilman would have accounted for... but they were ahead of the curve.

You're kidding yourself if you dont think every GM and every player agent doesn't already see this coming. Projected rises in cap space has been part of contract negotiations in the past and absolutely still are in the present (across every league that has a cap). This isn't some groundbreaking deep analysis you're uncovering here, Benning is most certainly aware. 

Regardless, a bridge contract is risky for us and we'd be much better suited taking a longer term deal. Its also likely Boeser wants a bridge contract and is betting on the cap going up as well as betting on himself improving. We're going to have to pay more than his market value for his age, production and upside if we want to sign him long term. 

Edited June 9, 2019 by BI3KSA-

[mephnick]

The Leafs made a huge f---up with Matthews contract. They paid him max and only locked him up for 5 years to the start of his UFA

 

So, you paid max? Without buying any UFA years? So the next contract (safely assuming Matthews is still awesome in his prime) is either going to cost you a billion dollars or he's going to walk? When you have a guy like that, you buy the 8 years, because year 5-8 are going to be a steal when the average salary keeps rising.

 

Dubas really baffled me with that one.

[stawns]

On 6/7/2019 at 8:35 PM, Provost said:

There is every possibility that Boeser signs a shorter term bridge deal.  It has been talked about as the most likely possibility.  We also have to decide on term for Petterson and Hughes as soon as next July when we can extend them.

 

While there are pro’s and con’s to shorter deals, I think there are special  circumstances in the league that should push us towards locking up our kids as long as possible.

 

When Vegas came into the league, you suddenly added a high revenue team to the revenue sharing formula with the players.  The league wide cap jumped by a huge chunk based on that extra revenue infusion.

https://www.forbes.com/sites/ryanlake/2018/12/06/nhl-expansion-to-seattle-brings-hope-of-higher-salaries-for-players/#41e6759b2125 

 

After the first year of Seattle, we will be facing another big jump in the cap.  The expansion teams are guaranteed to be high revenue in at least the short term with sold out season tickets, corporate boxes, and media deals.

 

A $7.5 million dollar Boeser salary under an $83 million cap seems fairly rich, 9% of the cap.  Three years from now when the cap is probably around $92 million due to the looming Seattle bump, that is a much smaller percent of the total cap.  

 

We also dont don’t want to be renogotiating with him after a bridge deal under that newly inflated cap world.

 

The same logic should apply to Petterson and Hughes.  Lock them up as soon as we are able to extend them.  We are going  to live or die by these kids anyways and if they don’t turn out to be worth their contracts, we are in the crapper of the league for years anyways rebuilding again... and it won’t matter if they are overpaid as we will be rebuilding again.

 

The cap inflation gets bumped even higher than growth if we ever give up on a couple of the bottom teams like Arizona and let them relocate.  Their new locations would be high revenue teams, so turning the lowest revenue into one of the highest, drags up the whole average and inflates the cap.  It is going to happen eventually, and I would put my money on within 5 years.

Boeser hadn't remotely earned that kind of money and that kind of term.  That would be setting a ridiculous standard for future contracts, Petey included.

[Provost]

6 hours ago, BI3KSA- said:

You're kidding yourself if you dont think every GM and every player agent doesn't already see this coming. Projected rises in cap space has been part of contract negotiations in the past and absolutely still are in the present (across every league that has a cap). This isn't some groundbreaking deep analysis you're uncovering here, Benning is most certainly aware

With one of the smallest front offices in the league and theybwya they have managed thing in the past... no Infont think they are aware, at least beyond a general knowledge of the cap going up.

 

I don’t have confidence that he will be doing deep analysis of what this will mean for his roster construction and how he plans on structuring contracts.

 

Agrnts have certainly mapped this out in precise detail with full future modelling.

[IBatch]

On 6/8/2019 at 4:10 AM, iinatcc said:

Tampa always signing players lower than then value is what baffles me the most. Either Benning is a terrible GM in contact negotiations or Yzerman (back when he was GM) was a genius in contracts 

It’s not hard to understand how they can do this given their players pay no state tax.   This means their bottom line for contracts over 6 million and up is a lot higher then 29 other team in the league. A 9 million contract is the same as 10.5 in other cities (except Vegas and Florida ...Dallas is close after them, but the rest aren’t close at all).  It’s also why SJ had to offer 13 for Tavares, which in Vegas and Florida’s teams would be like 11...they pay some of the highest taxes in the league in Cali.   Yzerman isn’t a genius, he will find things a lot different in Detroit.   Points 9 million would be like 10.5....or his 8 million like 9.25 etc etc...