Thursday, November 10, 2011

A Look at the Pekka Rinne Extension

This past Thursday, the Nashville Predators announced they had signed franchise goaltender Pekka Rinne to a 7-year, $49 million extension – the largest deal awarded in team history. After this season, Rinne’s average annual salary of $7 million will represent the highest cap hit for a goalie in the NHL, up from his $3.4 million number this season. On the surface, locking up a player that the franchise sees as “the best goaltender in the NHL” for the foreseeable future may seem wise, but there are a few underlying reasons that make this deal foolish for the Preds.

Let’s think about this again: 7 years, $49 million. For a team that is only spending $49,588,730 towards the cap this season and spent $50,903,696 last season, Rinne’s new $7 million cap figure would represent roughly 1/7 of Nashville’s entire budget. What is more, this doesn’t take into account the inevitable contract situations of both Shea Weber and Ryan Suter.

Weber, of course, was awarded a $7.5 million salary in arbitration this past summer and is entering his final season of restricted free agency. He will once again be arbitration-eligible and shouldn’t command a salary less than $7 million. Without signing him to a long-term deal making his cap hit more favorable, Nashville would likely be committing $14+ million to two players next season. Even if they choose to extend Weber long-term, I don’t see him taking much less than his current salary, further guaranteeing an emerging cap constraint.

Suter’s situation is equally sticky. He is set to become an unrestricted free agent next summer, the clear prize of the defensive UFA class. Considering there hasn’t been a defenseman of Suter’s caliber on the open market in quite awhile, he could easily command a salary upwards of $6 million for multiple seasons. Once again, if the Predators plan to keep Suter they will have to back themselves into a corner salary-wise.

Even worse, all of this hasn’t taken into account Nashville’s dire need for forward depth. If the Predators continue their trend of spending ~$50M relative to the cap, any combination of Rinne-Weber/Suter will easily cost $12-14 million and approach $20 million should they decide to keep all three. Here’s where it gets dicey – the Predators are already on the hook for 11 contracts next season (including Rinne) for a total of $30,710,833. Should they keep one of Weber/Suter, they will be at roughly $36-38 million with 12 players signed. Should they keep them both, they will be approaching $43-45 million with 13 on the roster.

This is where the rubber meets the road. If they choose to spend to the upper limit, the Predators would have roughly $2.8 million per opening to fill out a 20-man roster. If that number seems high, it probably is. It’s very rare for teams to field only 20 players on an active roster for lack-of-depth reasons. No team will go through an entire season with the same 20 players intact, and for each additional skater they chose to ice the Predators would lose about $358,735 per available roster spot. Also, for every $1 million below $64.3 million ownership chooses to spend, that $2.8 million number would drop another $142,857. I’m skeptical that the Predators are ready to step into the arena with the NHL’s heavy spenders just yet, meaning they could easily be looking at $1.6 million (or less) per salary opening just to ice a 21-man roster.

Previewing next year’s offseason, Nashville currently has 8 players not named Shea Weber set to become restricted free agents at the end of this season – seven skaters (4 forwards, 3 defenseman) and G Anders Lindback. Their current salaries total $9,004,167 which wouldn’t take into account any potential raises each player would earn. It is very unlikely Nashville will find the cap space to even address their RFA needs, let alone address their weakness up front in the UFA market. For a team that claims to be solidifying its future, the idea begins to look counterintuitive.

What, then, is the answer to the equation if both Weber and Suter can't fit under Nashville's cap? The difference between Weber's upcoming RFA status and Suter's UFA status may be the deciding factor here. If another GM wants to shoot Nashville an offer sheet for Weber this offseason, they would stand to lose at least two first round draft picks because of the high salary Weber would command. As we saw this past summer, GMs are very reluctant to offer sheet high-priced RFAs for this exact reason, thus giving Weber more certainty to be back next year. Should the Predators find themselves out of contention by the trading deadline, shopping Ryan Suter could fetch a ton of offers for a playoff run because of his affordable $3.5 million cap hit. While a trade may be the best option moving forward, if Nashville is in the playoff picture it seems less likely any deal would happen. Should Suter decide to test the UFA waters come July, the Preds may lose out on receiving compensation for his departure. If it became clear that he wasn't going to re-sign, they could trade his negotiating rights before July 1 but any return would be less than what they could get at the deadline.

Regardless of what happens to both defenseman this summer, there is no way around the fact that having Weber and Suter on the ice is a heavy positive for the Predators. While Nashville ownership claims to be making every effort to re-sign them both, having the Rinne contract on the books will make it extremely difficult. At the end of the day, $7 million is an astronomical salary for a goaltender, especially for a team on an internal budget. Without taking nearly all of that salary and pouring it into better options up front, it may be awhile before we see Nashville capable of producing a positive shot differential per 60 minutes at even strength. In the end, it was GOB who said it best:

Next up will be JaredL delivering your statistics fix by taking taking a deeper look into the actual values of Rinne and other goaltenders to their teams.

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