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03-11-2007, 12:09 AM
  #1
HotToddy
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Weakness of the CBA

Does anyone else think its a little weird that the new CBA makes contract average the cap hit, disallowing front-ended/back-ended contracts?

What was the though process on this being included into the new CBA? The only obvious one is it reduces incentive for teams to fully maximize their cap hit each and every season.

To me its one of the reasons Smyth is gone, how easy would it have been for a team like the Oilers to offer Smyth a back-dated 6-7 million dollar contract for this year as part of any contract, reduce his cap hit for back end years reducing exposure to an albatross contract when Ryan is 36.

What's the problem? Am I missing something simple, team wins and player wins in the above scenario.

IMO if the current CBA falls apart due to union shenanigans or the players opt out at their 4 year option they should re-negotiate this point.

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03-11-2007, 12:22 AM
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WheatiesHockey
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Maybe look at the NFL experience?
San Francisco offered Steve Young a heavy back ended contract he never collected much of it due to injuries.
Older players often get heavily back end loaded contracts which they will never collect much from.
Much of the labour turmoil in the the recent NHL came from the quailifying offers given to exactly two free Group 2 free agents Joe Sakic and Sergei Federov. Both were mid career top end talent players up for grabs in an era of NHL expansion.That will not happen again any time soon.
This summer there will be a wealth of top end talent available to teams with salary cap room.
The cap was supposed to be the great equaliser for teams like Edmonton. Maybe?

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03-11-2007, 12:23 AM
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Agreed. Shouldn't it be the actual contract instead of the average of the contract.

Another weakness in the CBA is emergency call-ups. I know this year is wierd but teams should be allowed to call up anyone not just for the position that a player is injured when there's no one in the minors to call up in that position.

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03-11-2007, 12:25 AM
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Quote:
Originally Posted by WheatiesHockey View Post
Maybe look at the NFL experience?
San Francisco offered Steve Young a heavy back ended contract he never collected much of it due to injuries.
Older players often get heavily back end loaded contracts which they will never collect much from.
Much of the labour turmoil in the the recent NHL came from the quailifying offers given to exactly two free Group 2 free agents Joe Sakic and Sergei Federov. Both were mid career top end talent players up for grabs in an era of NHL expansion.That will not happen again any time soon.
This summer there will be a wealth of top end talent available to teams with salary cap room.
The cap was supposed to be the great equaliser for teams like Edmonton. Maybe?
I agree with your post, but the big single difference it the no guaranteed contracts in the NFL. I think that's why the NHL has the average cap hit, so richer teams, can't go out, back load a guys deal, then send him to the minors to remove the cap hit from the roster.

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03-11-2007, 12:30 AM
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Fayne Gretzky
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I'm not sure but I think it would be stupid for a team that knows they won't make the playoffs in the following year, to sign their star RFA to a max contract for that season, and much lower for subsequent seasons when they might compete. Sure both the team and the player wins, but not all 30 teams, especially the year-in year-out contenders would agree to that.

How about if a player signs a big deal that's front-weighted. After that first season, they now become much more valuable to the team, trade-wise, and if said team falters, they will be traded like UFAs at the deadline. Having term-average cap hits promises security to the player.

Trying to think up other situations, can a player retire during the term of a contract? If so, forcing a player on a back-weighted contract to retire by cutting his playing time or even putting him on waivers a la Mogilny is more than a little bit unfair. This all boils down to the security issue.

This also prevents increasing contracts that are built to offset inflation, ie more money in year 7 based on projected real-dollar values. I can't think of any contract that has this clause in other businesses, and would lead into longer-term contracts being signed (like those crazy football ones, ech). I'm not sure these long contracts are a bad thing, but I'm sure a more enlightened individual could make an argument for or against it.

Basically, I like the average cap hit, it makes for some more realistic contracts, rather than some 500k in year 1, 7m in year 2 deals that might crop up.

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03-11-2007, 12:36 AM
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Quote:
Originally Posted by Ext View Post
I'm not sure but I think it would be stupid for a team that knows they won't make the playoffs in the following year, to sign their star RFA to a max contract for that season, and much lower for subsequent seasons when they might compete. Sure both the team and the player wins, but not all 30 teams, especially the year-in year-out contenders would agree to that.

How about if a player signs a big deal that's front-weighted. After that first season, they now become much more valuable to the team, trade-wise, and if said team falters, they will be traded like UFAs at the deadline. Having term-average cap hits promises security to the player.

Trying to think up other situations, can a player retire during the term of a contract? If so, forcing a player on a back-weighted contract to retire by cutting his playing time or even putting him on waivers a la Mogilny is more than a little bit unfair. This all boils down to the security issue.

This also prevents increasing contracts that are built to offset inflation, ie more money in year 7 based on projected real-dollar values. I can't think of any contract that has this clause in other businesses, and would lead into longer-term contracts being signed (like those crazy football ones, ech). I'm not sure these long contracts are a bad thing, but I'm sure a more enlightened individual could make an argument for or against it.

Basically, I like the average cap hit, it makes for some more realistic contracts, rather than some 500k in year 1, 7m in year 2 deals that might crop up.
I don't really understand your argument.

More (supposed) security for a player vs a change in the CBA that would make teams fully maximize their cap spending ability. Having cap room at the end of the season would be a bad cap management decesion and would expose owner/owners who are not as competitive.

Having front weighted contracts that have cheap years in the back end would be a sensible strategy for teams, why would a team induce the expense of the large up front year and then move the player? It would happen very rarely.

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03-11-2007, 12:48 AM
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Quote:
Originally Posted by HotToddy View Post
I don't really understand your argument.

More (supposed) security for a player vs a change in the CBA that would make teams fully maximize their cap spending ability. Having cap room at the end of the season would be a bad cap management decesion and would expose owner/owners who are not as competitive.

Having front weighted contracts that have cheap years in the back end would be a sensible strategy for teams, why would a team induce the expense of the large up front year and then move the player? It would happen very rarely.
A team with money may induce that expense in a non-contending year in order to get much much better assets for the future. We all know how much contract affects a player's value in this league - see Richards. If he was making 5 mil, we'd be all over him....then again, so would Tampa. I could see a rich team that will lose their stars (a rich Calgary after next season, for example) signing players to front-weighted contracts, paying up the next season, and getting an extra first round pick or so at the deadline. A team like Detroit wouldn't agree to this, since they always seem to be in the playoffs anyway.

Just an idea.

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03-11-2007, 12:58 AM
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Jimmi you are correct. Football contracts are only guaranteed as long the player can survive to collect his war booty. Survival on the NFL field is pretty much week to week.
Most likely at the age of 36 a player like Smytty would have limited market value with a $7 million contract.There would be no takers on that one.
One of the interesting things things with the caps is that aging champons will take significant pay cuts to keep playing the game. We saw this with Eddie Belfour signing with Florida this year for about 1/4 of his former salary.

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03-11-2007, 12:59 AM
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Quote:
Originally Posted by HotToddy View Post
Does anyone else think its a little weird that the new CBA makes contract average the cap hit, disallowing front-ended/back-ended contracts?

What was the though process on this being included into the new CBA? The only obvious one is it reduces incentive for teams to fully maximize their cap hit each and every season.

To me its one of the reasons Smyth is gone, how easy would it have been for a team like the Oilers to offer Smyth a back-dated 6-7 million dollar contract for this year as part of any contract, reduce his cap hit for back end years reducing exposure to an albatross contract when Ryan is 36.

What's the problem? Am I missing something simple, team wins and player wins in the above scenario.

IMO if the current CBA falls apart due to union shenanigans or the players opt out at their 4 year option they should re-negotiate this point.

This is NOT one of the reasons Smyth is gone. The Oilers have a budget of a few Million lower than the cap. Even if the Cap was 100 Million, the Oilers wouldnt spend more.

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03-11-2007, 01:11 AM
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If the NHL salary cap was $10 Million the Oilers would be at $7.5 million and still have a full rink.

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03-11-2007, 01:11 AM
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Quote:
Originally Posted by WheatiesHockey View Post
Jimmi you are correct. Football contracts are only guaranteed as long the player can survive to collect his war booty. Survival on the NFL field is pretty much week to week.
Most likely at the age of 36 a player like Smytty would have limited market value with a $7 million contract.There would be no takers on that one.
One of the interesting things things with the caps is that aging champons will take significant pay cuts to keep playing the game. We saw this with Eddie Belfour signing with Florida this year for about 1/4 of his former salary.
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Originally Posted by jedi View Post
This is NOT one of the reasons Smyth is gone. The Oilers have a budget of a few Million lower than the cap. Even if the Cap was 100 Million, the Oilers wouldnt spend more.
I disagree it wouldn't have helped. The EIG agreed to 27 million for Smyth, front-end it say 6.5, 6.25, 5.5, 4.75, 4.00 and it would have been much more palatible and an easy negotiation. Teams can't ammortize contracts right now which means they have to incur large risk on contracts for payers 30+.

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03-11-2007, 01:15 AM
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Ryan Smyth wanted 5 years at far too much money, and he likely is not as valuable at the end.

I am sure if Ryan would have taken a

6 6 5 4.5 4 he would still be here

That is only a 25.5 million contract over 5 years and it is less then the Oilers offered at 5.4 per year or 27 mill total. So you can even spread another 1.5 mill over those years to beef up the numbers.

The reality is, Ryan is maybe worth the deal I showed over 5 years, but he isn't worth more then that.


If Ryan would have taken any deal that would average out to $27 million over 5 years I am sure the Oilers would have taken it to keep the fans happy.

But Ryan wouldn't take less then 5 years and he wouldn't come down to a number of 5.4 per year.

Lowe is a good GM and he would have proposed many different deals to Ryan's agent

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03-11-2007, 01:18 AM
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Originally Posted by HotToddy View Post
I disagree it wouldn't have helped. The EIG agreed to 27 million for Smyth, front-end it say 6.5, 6.25, 5.5, 4.75, 4.00 and it would have been much more palatible and an easy negotiation. Teams can't ammortize contracts right now which means they have to incur large risk on contracts for payers 30+.
I think to EIG, the money overall is the bigger worry than the cap hit. It's not like the oilers spend to the cap anyways.

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03-11-2007, 01:42 AM
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Ryan Smyth is not Elite and therefore is not worth 5.5M or even 6.0M. Lowe already went higher than he wanted to offering him 5.4M per season for 5 years and it wasn't enough. Smyth thinks he worth more than he really is. That kind of money should be reserved for the Elite and that's something Smyth is not. According to TSN, he doesn't have the talent to become Elite.

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03-11-2007, 01:49 AM
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As an organisation the Oilers have long cherished frugality in an insane NHL market. If every team in the NHL was run like the Oilers the payrolls would be maxed out at $15-20 million league wide, there would be no need for a cap and every owner would have a fat bank account even the marginal teams.
With Smytty the Oilers had to cope with some unusual circumstances. He was the face of the franchise and obvious team leader. Without him the Oilers look pale and sickly. Was Smytty worth $5.5 Million in an open market? the answer would be NO. was he worth it to Edmonton Oilers? Yes. Objectivity has its limits in the NHL market.
A few years back, I remember Pierre McGuire was profiling contract values and value to their teams by comparing Marian Gaborik and Martin Havlat. On paper Havlat and Gaborik have almost identical profiles. Havlat was a second line player on Ottawa while Gaborik was numero uno on a middling Wild team.
Conceivably a player like Ilya Kovalchuk could easily score 30 or more goals for the Oilers and so could many other players and maybe outperform Smytty maybe for less than $5.5 Million. In the salary cap world it really is a case of relative value and what a player does for his individual team. Boston got a great dman in Zdeno Chara but wound up using a great deal of cap room on one player and is still likely to miss the playoffs.

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03-11-2007, 05:21 AM
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Quote:
Originally Posted by WheatiesHockey View Post
Maybe look at the NFL experience?
San Francisco offered Steve Young a heavy back ended contract he never collected much of it due to injuries.
Older players often get heavily back end loaded contracts which they will never collect much from.
Much of the labour turmoil in the the recent NHL came from the quailifying offers given to exactly two free Group 2 free agents Joe Sakic and Sergei Federov. Both were mid career top end talent players up for grabs in an era of NHL expansion.That will not happen again any time soon.
This summer there will be a wealth of top end talent available to teams with salary cap room.
The cap was supposed to be the great equaliser for teams like Edmonton. Maybe?
the day after the oilers got FCP people said it was, now it appears some players play for more then just money

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03-11-2007, 07:55 AM
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Originally Posted by Smyth2Hemsky View Post
Ryan Smyth is not Elite and therefore is not worth 5.5M or even 6.0M. Lowe already went higher than he wanted to offering him 5.4M per season for 5 years and it wasn't enough. Smyth thinks he worth more than he really is. That kind of money should be reserved for the Elite and that's something Smyth is not. According to TSN, he doesn't have the talent to become Elite.
And the sad thing is that he will get paid like he's an elite player. Why? Because, like any business, some managers/owners tend to over-valuate the intangibles, which are very hard to put a value on.

Bank to the main topic, yeah, that's a very good point. When I first heard about it, I didn't quite understand the purpose of it, still don't. It's not like the contracts are not guaranteed. If you want to be stupid and sign a player or players for 2-2-2.5-2.5 and finally 7, your just screwing yourself in the last year when you have to resign a bunch of players or sign FAs.

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03-11-2007, 10:04 AM
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I don't think the cap hit had anything to do with the Smyth contract. I think it boiled down to simple dollars paid over the deal.

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03-11-2007, 11:15 AM
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I don't think the cap hit had anything to do with the Smyth contract. I think it boiled down to simple dollars paid over the deal.
So you don't think having a 5.5 milion dollar cap hit for 36 year old Smyth was a big fear of Lowes? Frankly at his current production Smyth is worth 6 million. The problem is forecasting a 36 year old Smyth.

No doubt the total contract value was the main negotiable point but the depreciation of Smyth had to be a factor.

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03-11-2007, 11:51 AM
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A purely speculative point, but does anyone else wonder if Smytty walked away from the best offer he will ever get? In an open market how many teams will be interested at 5 plus million? What if teams are only interested in his services for 3 years at $4 million or less?

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03-11-2007, 02:28 PM
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Originally Posted by WheatiesHockey View Post
A purely speculative point, but does anyone else wonder if Smytty walked away from the best offer he will ever get? In an open market how many teams will be interested at 5 plus million? What if teams are only interested in his services for 3 years at $4 million or less?
There's certainly a good chance of that, although I still think there's a good chance that the Islanders would offer a better deal because (a) they gave up quite a lot and will have pressure to justify doing so; (b) Wang/Snow appear to have an abiding faith that the cap will keep going up (no other plausible explanation for DiPietro contract). However, if Isles sign Smyth, they're really going to have to juggle players around. They have an incredibly cheap defense right now, most of which have expiring contracts this year.

If Islanders don't sign Smyth, I bet Smyth will get 6 M plus for up to 3 years. However, I don't think anybody else will come up with a 27 million package over 5 years.

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03-11-2007, 02:37 PM
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Not a weakness

I don't think it's weakness in the CBA. It prevents teams from paying huge signing bonuses that don't count against the cap. A back ended contract or lengthy contract has alot of risk, if the cap goes down year to year or it stays the same for a long period it could hurt the team. The Islander's have perfected " How not to Sign Contract's For Dummies" authored by Charles Wang, Mike Milbury and Garth Snow.

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03-11-2007, 03:19 PM
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the average is a good rule.. imagine if a team's in a win-now mode with a bunch of established players.. it'd most likely back-load a bunch of contract offers to players just for the chance of winning the cup in the upcoming season.. so you say ohh they are screwed for the future years then.. then why worry about what's going to happen down the road when you just gave yourself the best chance of winning now..

on to the other point.. 36 year old smyth at 5+ mil a burden.. that's ironic because people complain about atheletes not showing "loyalty".. well what are we talking about here from the other side of the table?..

to attract players to sign with you.. you have to give them incentives.. 1) money and committment and 2) winning..

the oilers showed none of the above but let's just blame smyth anyways..

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03-11-2007, 03:36 PM
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Quote:
Originally Posted by HotToddy View Post
Does anyone else think its a little weird that the new CBA makes contract average the cap hit, disallowing front-ended/back-ended contracts?

What was the though process on this being included into the new CBA? The only obvious one is it reduces incentive for teams to fully maximize their cap hit each and every season.

To me its one of the reasons Smyth is gone, how easy would it have been for a team like the Oilers to offer Smyth a back-dated 6-7 million dollar contract for this year as part of any contract, reduce his cap hit for back end years reducing exposure to an albatross contract when Ryan is 36.

What's the problem? Am I missing something simple, team wins and player wins in the above scenario.

IMO if the current CBA falls apart due to union shenanigans or the players opt out at their 4 year option they should re-negotiate this point.
I don't think its a weakness. If anything its proactively anticipating a problem.

Simply put, that the natural tendency of teams that are looking at win now now would be for clubs to sign unreasonably long backloaded contracts heavily and screw their future capspaces beyond all recognition. This has AFAIRC occurred with NFL teams.

Averaging capspace out is a very prudent measure.

edit: 4th liner already got the bingo while I was busy researching my memory

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03-11-2007, 09:40 PM
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Originally Posted by 4th_Liner View Post
the average is a good rule.. imagine if a team's in a win-now mode with a bunch of established players.. it'd most likely back-load a bunch of contract offers to players just for the chance of winning the cup in the upcoming season.. so you say ohh they are screwed for the future years then.. then why worry about what's going to happen down the road when you just gave yourself the best chance of winning now..

on to the other point.. 36 year old smyth at 5+ mil a burden.. that's ironic because people complain about atheletes not showing "loyalty".. well what are we talking about here from the other side of the table?..

to attract players to sign with you.. you have to give them incentives.. 1) money and committment and 2) winning..

the oilers showed none of the above but let's just blame smyth anyways..
Very interesting point. I forget to measure for the stupidity of NHL owners when I made my post and I think you are probably hitting on a real problem.

Couldn't a rule be made to circumvent stupid GM's?

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