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Huge contracts for Getzlaf, Perry and Semin and now, Phil Kessel, too? What are NHL GM’s supposed to do?

Now that so many hockey fans have earned advanced (if informal) degrees not only in statistical analysis but ‘capology’, economics, finance, business administration (and time as decision-makers at a senior personnel level in the sports industry), it’s easy to anticipate certain reactions when NHL teams sign players at these exorbitant salaries.  Because, well, we all think we're experts at these things nowadays, it seems.

For example, the Anaheim Ducks recently signed Corey Perry and before that Ryan Getzlaf to huge, long-term contracts.  The predictable response?  “Look at how stupid Bob Murray is—over-paying for those guys…how will he build the rest of his team?”.

The other expected criticism is, of course, that many of the same GM’s or owners who opposed the very idea of long-term contracts are now doing that very thing by signing these seemingly outrageous contracts. I must admit I was indeed a bit baffled when Carolina went to the well and signed Alexander Semin to a 5-year deal this week for big money (7 million a year, ouch)- when the guy could barely get a contract last summer.  But here we are.

And here’s the apparent reality:  the new CBA is what it is.  The owners, we recall, wanted five-year limits on contracts, which sure would have made sense to me—as a hockey fan.  Not only did I want to see the GM's and owners protected against themselves, but I trust no player to perform at a level worthy of huge money for seven or eight seasons- even five.  And whenever players can put themselves on the market, of course some team will step up and pay "more" than they should.  These GM's and owners are competitive people.  They're trying to win.  Should we criticize them for trying to build their team with elite players?

If they don't pay up, they'll be loathed by their fans- or worse, accused of collusion, if every team just suddenly decided this business of paying extravagant salaries had to stop. It's a no-win situation for the owners and GM's.  

The PA naturally fought and fought the five-year limit idea, and got pretty much what they wanted.

So the league is stuck with teams that need and want to stay competitive, with a gun held to their head.  Oh, I know people always say, “no one makes these owners/GM’s sign these ridiculous contracts…”.  And that is true.  No one made the Islanders give Di Pietro that money, or the Canucks give Luongo his deal.

But let’s be honest—and fair.  It’s a competitive and complex marketplace.  Teams need to survive, and in most markets, to do that, they need some bums in the seats.  This is hockey- not football.  So they need players with some pedigree to sell any tickets at all in many U.S. markets.

If the Maple Leafs had Getzlaf and Perry right now (and even assuming we had not won a Cup with them), would we say “oh, they are demanding 8-year deals at 8 million plus per…that’s silly, just let them walk….”?  I don't think so.  The fan base would go crazy, demanding we keep our "core" players that helped us "win".

As fans, we want and expect our owners to cough up to keep or attract great players. Mike Illitch has done it for years in Detroit, and everyone loves him- especially the players.  But so do Red Wing fans.  (Buffalo owner Terry Pegula tried to step up to the plate and spend big money two years ago when he came to town—amid universal fan and media applause—and it has been a disaster. Does that mean he should not have tried to improve the team?)

You might be saying, “hey, the Sabres made the wrong signings..”.  But wait, who knows what the “right” signings will be in advance?  Brian Burke was supposed to be a genius GM, but his free-agent signings in Toronto were simply awful.  He, like any GM or NHL owner, does their best to assess what they can "afford" and how a player will perform.  After that, all bets are off. Does that make Burke a bad General Manager because some of his decisions went south?

Anyone who follows VLM knows I’ve long, long believed that the money athletes receive nowadays is insane.  It has been for decades but it is seriously out of whack now. Way out of whack on every level.  But many disagree with me, and think professional athletes are actually fairly paid, or maybe even underpaid.  I don’t get it, but that’s their view.

So players hold out for every dollar they think are worth, or can get somewhere else.  If the Ducks did not sign those guys, what was the team’s option?  Let them go for nothing this summer?  How would their fan base feel about that?  Trade them for less than what they are really “worth”?  And, in reality, that’s almost always the outcome.  You never get what the true elite players are worth.  A bunch of prospects and ‘maybes’ and draft picks—if you’re lucky.

So I’m not going to unduly criticize teams if they “overpay” to retain their best players, given the reality of the CBA.   I don't get the Semin deal, but I'm not in Jim Rutherford's shoes.  Nashville did not really want to pay Weber what they did after losing Suter, but under the “rules”, they had to cough up once Philly stepped up last summer.  That’s business, I guess, whether I like it or not.

At least in the case of Perry and Getzlaf, they were drafted, developed and won a Championship together in Anaheim.  There is some history there.  They aren’t rentals or UFA’s just going to any other team only for big bucks.  They probably could have got similar deals in free-agency. At least they are showing (I sort of have to hold my nose as I type this) a kind of loyalty to their first NHL organization.

The only way to solve this problem is to have a different CBA—and that opportunity is gone.  As long as there is free-agency at ridiculously low ages in hockey, you’re going to have teams scrambling to find ways to pay their star players.

Here in Toronto, it means we’ll have to pay to keep Phil Kessel, right?  But here's a question: given where the market continues to go (forever "up"), would you, if you were Dave Nonis, pay Kessel 7 million a year?  8 million?  He has more points than Perry this season, and had more than Getzlaf last season, if that’s the measuring stick.

Let's not stop there:

Are you happy paying Grabovski more than 5 million a year to check?

Do you want to pay Bozak 4-5 million or more for what he does?

All those who like MacArthur, will you also like him at 5 million a year?

I raise these questions simply to remind ourselves that we get what we asked for.  People supported the players during the lockout, and the deal that was ultimately signed still allows for monstrous, absurdly long, guaranteed contracts.

As long as the winds tilt completely in the players' favour, this is what we will have.  Gazillion dollar players who, for the most part (there may be exceptions, I recognize), are simply not worth it.

It looks like hockey will follow basketball and baseball and football.  There will now be constant talk of having to get rid of “bad contracts” in hockey, too.  Yes, the same ones “stupid” owners and GM’s signed.  But I’ll say it again: sure, no one held a gun to their head, but if they want to survive in a competitive marketplace, you have to retain your best players.  That’s what GM’s and owners are trying to do.  If the “system” encourages players to seek the max at every turn, they will of course do just that.  What can teams do?

People would gladly pay (and I did, many times) to go see Bobby Orr, Bobby Hull (right), Gordie Howe, Wayne Gretzky, Guy Lafleur, Mario Lemieux  and here in Toronto, Keon, McDonald, Salming, Sittler, Clark and Gilmour.

In the present day, I'm sure most fans would gladly pay to see Crosby and some others.  It’s like LeBron in basketball. You're willing to pay big money for tickets to see the very best.

But when it comes to many of the rest of the NHL players, we often wouldn't recognize the difference between them and any replacement part.  Yet in the crazy world of hockey, they are worth millions, including some of the Leafs I mentioned above.

My point?  I hate it, but I'll say it: let’s not complain if the Leafs end up paying Phil Kessel 8 million a year for 8 years by the time he hits free-agency.  In today's absurd hockey world, it may be that—or get virtually nothing of value in return.


  1. Well if you have been following my comments a couple of posts ago this is what I was talking about. The Leafs have a hard decision coming in the next couple of years. The NHL is a private enterprise so what an owner is willing to pay is none of my buisness. It is not my money and I'm not forced to support the team. But with the cap going down can the Leafs afford to pay Kessel that much money? Don't forget Kadri is going to get a new contract this summer, Phanuef is up after next year. This is why I would entertain the idea of trading Kessel now when his value is at it's highest. If Kessel gets 8 mil per that will be 1/8 of the payrole is he the kind of player you can build a winning team around. I know it sucks to talk about the richest team in hockey not being able to afford a player, but that is the reality moving forward under a cap system. What if it comes down to one of Phanuef or Kessel, who would you keep? Potentialy the Leafs will have Lupul, Kadri, Grabovski, Phanuef and Kessel all over 5 mil per year next year alone. That is 1/3 of the cap in just 5 players. Somebody is going to have to go and that doesn't even take into account Bozak or McArthur.

    Oh well it's not as bad as Vancouver who has 61 mil tied up in 14 players next year. This in a year when the cap is going to be 64 mil. Gillis has botched the Luongo trade badly and his team is screwed royaly next year. Why would anyone trade for him now when in all likely hood they are going to have to buy him out this summer? The guy should be fired for epic bunglement.

  2. I well recall your earlier posts, Willbur. And I think you raise an intriguing question (Phaneuf v Kessel). There are a number of teams who will likely face a cap crunch heading into next season. Will the Leafs "build around" Phaneuf and Kessel, or try to get top value for one of them at some point?

  3. Semin and Kessel have similar numbers this year, so 7-7.5 million for 5 years seems about right. He will have to show a whole new level of intesity in the playoffs to get 8 million a year. If he doesn't have a great playsoffs, he isn't worth $8 million. It's that simple. Players at $8 million a year are key performers at playoff time.

    I would like to keep Kessel, but if he wants much more...goodbye in a deadline trade next year. If the return is good enough, the team should be ok without him. Kadri could be far more important to the team's future. But that's something we can figure out this summer.

    Cap space isn't that big of an issue. There is already 7 million in cap space which is greater than next year's reduction. Buy out Komisarek. Connolly and Lombardi come off the books this year, so in total that should free up 11 million. Liles doesn't have a long term future with in a team with Gardiner and Reilly so there is almost another $4 million that we should be able to free up in trade over the next year. Armstrong and Tucker come of the books in the next year so there another $2 million for a total of 16 million

    As long as nobody gets too greedy, we should be able to re-sign Bozak, Kessel, and MacArthur while providing a heafty raise for Kadri. Bozak isn't getting 5 million, it might be 3-4 million with similar numbers for MacArthur or an increase of about 3 million over what we are spending for the two players. Perhaps we could go a bit higher for the two players but not that much....that's about the limit.

  4. I like your breakdown, DP. The key line is "as long as nobody gets too greedy"! Thanks for that.

  5. There is also another option, I'll call it the Boston model: sacrifice some scoring on the third line and fourth lines and build those lines into more defensive shutdown lines at a lower price. McClement make $1.5 million while MacArthur will probably get 4 million or 4.5 if somebody is stupid. Does MacArthur really provide $2.5 more value than McClement? I think not.

    Take a look at the salaries for these 4 Boston players:

    Pandolfo, Jay $625,000
    Thornton, Shawn $1,100,000
    Paille, Daniel $1,300,000
    Campbell, Gregory $1,600,000

    Would you rather have those 4 guys spread across your third and fourth lines or one overpaid Clarke MacArthur playing on the third line at $4.5 million? The total cost is about the same.

  6. Personally, DP, I'd take the Boston players you mention in a heartbeat over "paying" MacArthur.

  7. A couple of thoughts...
    It's easy to say we should get rid of Kessel - but who's going to replace his points? He's been one of our top guys every year he's been here. Sure, he may infuriate some of the faithful, but he's delivered. And if he and Lupul get back on track, we have one of the premier tandems in hockey (as we did last year). I think he's worth whatever it takes. It would probably be easier to trade Phaneuf, simply because we have more defencemen available - even though I don't see anyone who can play his minutes.
    I think the key part of your post today is:

    "People would gladly pay (and I did, many times) to go see Bobby Orr, Bobby Hull (right), Gordie Howe, Wayne Gretzky, Guy Lafleur, Mario Lemieux and here in Toronto, Keon, McDonald, Salming, Sittler, Clark and Gilmour....
    You're willing to pay big money for tickets to see the very best."

    When it comes to salaries, we aren't talking just about sports. We're talking about sports as entertainment. Or maybe it's entertainment as sports. On the pure business model of it, is Tom Cruise worth 20 million dollars for a movie? He is if the movie makes 500 million dollars! Heck, give him a free Mercedes, too! (Which one studio did when they passed the 100 million dollar mark on a film of his). Are hockey players worth 8 million dollars a year? Sure - if ownership is making 100 times that. People will pay to see them, will watch TV, will buy merch. Not to mention the ancillaries: how much do teams make from ads on the boards, I wonder? It's all business, pure and simple. And if your top guys can bring you a winner - it's buttercream icing on the cake. In fact, it's extra layers on the cake as well!

    On a side note, I'd love to see a stat that tracks an athlete's performance before and after getting the huge payday.

  8. I'll never get used to it, Gerund O'- but I realize it is what is is. Thanks.

  9. From a Leaf perspective, I find the upcoming trade deadline compelling. Much will depend on what is offered. I imagine, for example, that Vancouver would ante up for Tyler Bozak, creating the interesting possibility of cashing in on a rental and the Leafs re-signing that very rental as a UFA in the summer. I would certainly listen to offers for Kessel, his recent impressive forays on the backcheck notwithstanding. Of course, moves like this would be risky from Nonis’ perspective because they could create significant holes in the lineup heading into the playoffs. On the other hand, not making these deals now could create significant contractual pressure to dole out money anyway, without getting any personnel in return. Damned if he does, damned if he doesn’t.

    It will be interesting to see what happens with Luongo. I am inclined to agree with Willbur’s point that Gillis miscalculated the market for Luongo, and could well be faced with a buyout situation and absolutely no return. I am guessing that the best offer for Luongo occurred last draft day and could have been Luke Schenn. I know, this is pure speculation on my part, but we do know that Schenn was available and that the interest in Luongo was high at that point. If this were the case I am betting that this would have been the best offer that would ever be tabled. Then again, stranger things have happened, and GM’s are apt to empty their wallets at the trade deadline. I will certainly follow the Luongo situation with great interest as it appears to be a classic case of overvaluation by the seller.

    If I were Nonis (and lived in an impermeable bubble) I might be inclined to explore the market as a seller. Kessel would be at the top of my list, but so would Bozak (while making it crystal clear to his agent that I would attempt to resign him if he became UFA in the summer). Personally I would want to keep McArthur but he would be available at the right price as well. Any takers for Tim Connolly? I would also listen to offers if they came for one or two of our defensemen as I believe there to be some depth there. In my mind, Mark Fraser would be virtually untouchable, while knowing that that stance would raise a few eyebrows. You have to be careful with the return on defensemen though, as the Aulie trade made clear (and Michael spotted from the beginning). I guess the good thing is that Nonis can do nothing and still look good, whereas Burke was probably feeling pressure to do something, anything, just to appear as if he was still in control of the defective parachute in free fall. The problem with Nonis doing nothing is the distinct possibility of losing Kessel, Bozak and MacArthur for nothing or being forced to overpay for fear of losing them for nothing. While not as outwardly entertaining as speeches about testosterone and truculent rat’s asses, it sets up some high entertainment nevertheless.

  10. I have long followed your take on the Luongo matter Bobby C.. Your position (to this point) has been borne out.

    When it comes to Nonis, Kessel, Bozak, MacArthur et al, it would be fascinating to know what Nonis would contemplate. Would he ever move Kessel, thinking it best to get const-controlled young players and/or draft picks in return for a largely one-way (albeit elite) forward who will obviously be seeking 8 million a year forever.

    You've well captured some of what I was trying to "get" at in my post. GM's are indeed "damned if they do, damned if they don't...". Thanks Bobby.