Monday, March 25, 2013
I get excited for Deadline Day too, but I get excited when my team signs undrafted free agents that no one's ever heard of. Trades fire my inner gambler - I get to ruminate on whether a team gave up too much and what they can hope for out of this player. It's obviously more exciting when my team makes a move, as I immediately begin to think about how this player slots into the lineup and where he presumably stands on the depth chart. So I'm not saying Deadline Day is inherently boring, just that the NHL has changed a great deal since it was established as a national holiday north of the border. Let's go down the reasons:
1: The NHL used to be separated into two categories: teams that could afford to sign their free agents and those that couldn't.
When the UFA age was 31 and there was no salary cap, there were usually only a few teams interested in players in July. Everyone else sat by and let their franchises get picked clean. Rather than sit idly, teams out of the playoff race would deal their UFAs at the trade deadline, and thus was deadline fever born. This year, people thought Ryan Getzlaf and Corey Perry would be deadline bait, but both were signed to 8 year contracts instead; I'm pretty sure the motivation for signing was to ruin all our deadline speculations and fun. Last year, we saw Ales Hemsky stay in Edmonton rather than find his way to a Cup contender like we'd all thought. With the salary floor, it's hard to point to many franchises who straight up cannot afford a certain player.
2: Teams didn't know about or did not care about the value of prospects like they do now
I say this glibly, but some of those deadline deals in the 90s and early 2000s cost teams substantial young players. We seldom see this anymore - most players moved at the deadline go for a draft pick. I've written elsewhere about the difference between a prospect and a draft pick, but prospects are usually worth more because they are closer to being NHLers. This is why the Brenden Morrow trade is such a surprise - Joe Morrow seems like a darn good prospect, and they don't go in these sorts of deals. Teams now hang on to their prospects because the salary cap makes them some of the most valuable commodities.
3: If you want to make a big deal, you want to do it with as much time left in the season as possible
There are still some big names moved before the deadline - trouble for the TSN crew, they move days before. If you are going to give up something significant for a player, you want more games with him to acclimate to your team. If Jarome Iginla is traded, I expect for it to happen well before the deadline - there's no reason to drag it out, his price probably isn't moving much, nor are his suitors getting more desperate.
4: The NHL has more parity than ever
It's hard for teams to pack it in when they're a few points out of a playoff spot, and right now almost the entire NHL is 'a few points out of a playoff spot' if they're not already in one. There are only 4 teams that currently sit more than 5 points out of a playoff berth. With the loser point firmly in place, it makes it much more difficult for teams in 13th place to clamber over all the other clubs to earn a playoff spot, but the standings are deceivingly close. It's a rare franchise that can pass on the chance at postseason play.
2008 seems to have been the acme of Trade Deadline fever - Marian Hossa, Sergei Fedorov, Brad Richards, Brian Campbell, Cristobal Huet, Bryce Salvador, Brad Stuart, and Adam Foote were all traded on Deadline Day. It's time for TSN and the NHL chattering class to scale back the expectations - with fewer teams playing free agency chicken with their big-name players, a greater ability for teams to afford their stars (with 8 year deals instead of 7), and teams realizing that dealing for excellent players at the deadline is not always a panacea, deadline fever will be a thing of the past. Sad for us, but good for the NHL: It's an unhealthy league where excellent players are often on the move for future considerations.
Tuesday, March 19, 2013
P.K. Subban's contract ends when he is 25 years old, with 2 years of RFA eligibility left. He's having yet another great season - not just by microstats either. He's at nearly a point per game, and up above 3 shots per game. Skeptics will once again argue that the Habs are letting Subban drive his price up substantially for his next contract - perhaps they are right.
Yet one thing the 8 year Corey Perry and Ryan Getzlaf contracts drive home - it is damned expensive to let players get close to unrestricted free agency. Perry and Getzlaf are both 28 years old - their contracts will end when they are 36. We know forwards peak at around age 25 (there's a better link for that for sure, but rest assured it's true), so those contracts are likely to go real sour when Perry and Getzlaf are reaching their mid-30s. Now that teams can't reduce cap hit via long-tail contracts, they are going to have to choose when to offer their young franchise players an 8 year contract. If Subban gets an 8 year offer at the conclusion of this contract - and unless he gets injured or somehow regresses seriously, I don't see how he doesn't - that deal would bring him to age 33, with two years worth of RFA eligibility in the deal. PK couldn't use the threat of the market to drive up his price (unless he courted offer sheets) so the Habs could likely get a fairer price than if they had signed him to a 4 or 5 year deal this past off-season, then tried to re-sign him when he was approaching UFA. In that scenario, he would've been able to use the market's price against Montreal, and his contract would've lasted until he was at least 35. Now this claims that Norris-nominated defensemen last a real long time, but even so I think Montreal will have a better sense of where PK is at when he's 33, and it will be easier to make a decision about whether to let him go or to re-sign him without him having had his value destroyed in the meantime.
I think it's going to be fascinating to see how teams use the possibility of the 8 year contract. We've seen 3 players approaching UFA get one - what about players who aren't?
Monday, March 4, 2013
I'll work on getting the iTunes links revived shortly, but for now here is a link to our RSS feed, with options to stream or download the podcast below.
One minor edit: when we recorded the show, the O' Reilly to waivers story hadn't broke yet, so that would obviously change our opinions on Feaster a bit.
Thanks for listening, and enjoy!
Download (Right Click, Save As)
Saturday, March 2, 2013
Looking back to the afternoon of February 7th, Isles GM Garth Snow gave the mainstream media and twitterverse something to talk about following the acquisition of the two-time Vezina Trophy winner from Boston. Per Bob McKenzie, only a conditional second-round draft pick would be headed the other way, compensating the Bruins only if Thomas reports to Long Island (or another club should New York trade his rights elsewhere) under his current contract.
At first glance, many assumed the trade would purely serve the purpose of helping the Islanders, a team that frequently used performance bonuses to reach the Lower Limit under the 2005 CBA, continue to find roundabout ways to pay less than what equates to (a prorated) $44 million this season. Such a view would be supported on its face, considering bonuses have been removed from the floor equation in the new agreement (a change likely tailored specifically as the 'New York Islanders Rule'). What is more, Thomas signed his current contract after his 35th birthday, meaning the cap hit shall remain on any team's books for the duration of the deal if he retires before its expiration. With all of this in mind, it becomes easy to see why such a justification from the Isles' perspective would make a good bit of sense.
To borrow a catchphrase from Lee Corso: "Not so fast, my friends."
Partly a reason for taking so long to write this article, conducting a bit of research on how the salary cap's Lower Limit is calculated revealed quite the interesting realization. Similar to how teams can add cap hits seemingly larger than their available cap space at the trade deadline, teams can similarly "bank" floor space throughout the year, trading players at the deadline that would appear to put them below that season's floor requirement.
Allow me to illustrate using language from the '05 CBA, translating a bit of lawyer-speak to English. In Article 50, Section 50.5(c)(i) at page 200, the accounting practices for the Lower and Upper Limit are set forth:
Lower Limit. No Club shall, after commencement of the regular season, be permitted to have an Averaged Club Salary that falls below the Lower Limit for that League Year.Noting the presence of the term "League Year," i.e. that the floor must be met over the course of the year as opposed to each individual day, the only definition left for us to understand is that of "Averaged Club Salary." Removing language about performance bonuses since they cannot be factored into the equation under the new agreement, Averaged Club Salary is defined as:
[T]he entire aggregate amount committed by each Club in a League Year, calculated daily, as Player Salaries . . . in that League Year . . . .in 50.5 (d)(i) at page 201. The definition also goes on to indicate:
Averaged Club Salary . . . is utilized to determine a Club's Payroll Room.Keeping in mind that Payroll Room is merely the difference between the Upper Limit and a team's Averaged Club Salary, i.e. how far below the salary cap a team currently is for the season, we're left with the rather ambiguous task of figuring out what this means when inverted and applied to the salary floor.
With all language pertaining to the accounting of the Upper and Lower Limits being Article 50 components, the following example from Bill Daly on page 451 serves to outline the basic idea behind how all of this is calculated:
The Upper Limit is $40 million. A Club has an Averaged Club Salary of $38 million. With $2 million in Payroll Room at the halfway point of the season, the Club may sign or acquire a Player with a one-year SPC that has a $4 million face value. In this circumstance, even though the Upper Limit has not changed, and the face value of the contract would appear to put the Club above the Upper Limit, the passage of time from the start of the season to the midpoint of the season has created Payroll Room for the Club such as to allow the acquisition of a $4 million face value SPC.In other words, because Averaged Club Salary is an aggregate sum of the amount paid to each player on the team's roster up to the current season day, a team below the Upper Limit by $2 million for half the season has saved $2 million against the cap, and can add that to the $2 million they are on pace to save for the second half to acquire said player with a $4 million cap hit.
With no language indicating that "floor room," if you will, would be calculated any differently, I was left to assume that teams could similarly build an Averaged Club Salary to a certain point, allowing them to remove players from their roster so long as they reached $44 million in salary paid by the end of the season.
Put another way in the context of Daly's example, say that this year's Islanders have an Averaged Club Salary of $46 million with $2 million in "floor room," or the difference between Averaged Club Salary and the Lower Limit. At the halfway point of the season, the club may trade or remove a player from their roster with a $4 million face value. In that scenario, the Islanders would pay less than the per-day requirement to meet the Lower Limit for the second half of the season (only paying $21M in total instead of $22M), but still reach the minimum of $44 million paid.
Through correspondence with the NHLPA and the League themselves, I was able to confirm that teams may not owe salary commitments that wouldn't reach that season's floor number, and could indeed dip below (what this year equates to $444,444) the prorated salary floor requirement for each season day.
Shifting to how all of this relates to Thomas and the Islanders, my aforementioned assumption on how the Lower Limit was calculated prompted the sending of this tweet on the night of the trade:
Did the math: Excluding Thomas's salary, the Isles will be ~$2.65M above the cap floor if they trade Visnovsky AND Streit on deadline day.— Driving Play (@DrivingPlay) February 8, 2013
A little while after, McKenzie divulged the following:
Technically, NYI were cap compliant (to meet floor) as soon as Visnovsky came off suspension today but NYI opted to make Thomas deal anyway.— Bob McKenzie (@TSNBobMcKenzie) February 7, 2013
Further expanding on just how compliant the Islanders were, James Mirtle's aforementioned article reveals that the range between the Upper and Lower Limits is ~$10 million larger than we saw last season. Another source of possible confusion, this year's $44M number is lower than both last season's $48.3M floor, and what would have been a $54.2M Lower Limit had the old CBA run through 2013.
After a short break for a deep breath, we may now gaze upon New York's roster. This year, the NHL season began on January 19 and is set to end on April 27, making it possible for a player to spend a maximum of 99 days on a team's active roster. Before adding Thomas, his contract was on Boston's books for 19 days for a total of $959,596 spent against the Bruin cap*.
Below is recreation of capgeek's daily tracker, as it stood on the night of the trade. One notable distinction about McKenzie's tweet, however, the assumption that players on suspension do not count toward a team's Lower Limit. Reading:
For Players that are suspended, either by a Club or by the League, the Player Salary . . . that [is] not paid to such Players shall not count against a Club's Upper Limit or against the Players' Share for the duration of the suspension, but the Club must have Payroll Room for such Player's Player Salary and Bonuses in order for such Player to be able to return to Play for the Club.Article 50, Section 50.10 (c) at page 226, there is no language about a suspended player being counted "against," i.e. not being added to, a Club's Lower Limit number. It only speaks to the Upper Limit implications and the accounting that must be done upon a player's return, thus I have included Visnovsky's 19 suspension days toward the Islanders' Lower Limit charts.
|Player||Pos||Full||LTIR||35+||Buried||Retained||SOIR||Cap Cost ($)|
Should the Islanders keep his salary until the end of the season, a maximum 80 days, Thomas will have an effective $4,040,404 price tacked on to New York's Averaged Club Salary. On pace to spend $54,116,903 for the year before burying Rick DiPietro and recalling Kevin Poulin, that number stood at $50,076,499 without Thomas and $45,551,246 without the remaining 80 days and $4,525,253 of Visnovsky's contract.
In Layman's terms, the Islanders were on pace to comply with this year's cap requirement by $1,551,246, or 3.53%, before Visnovsky was activated. After, the team was on pace to beat $44,000,000 by a more comfortable $6,076,499, or 13.8%.
Fast-forward to this year's trade deadline, which falls on April 3rd at 3 PM EDT. Salaries are added to a team's Averaged Club Salary each day at 5 PM New York time, meaning that any player traded on deadline day will count against his new team's cap for 25 days. Consistent with the Islanders roster on February 7 (sans Thomas), it would follow that removing both Streit and Visnovsky on deadline day would result with the following:
|Player||Pos||Full||LTIR||35+||Buried||Retained||SOIR||Cap Cost ($)|
This demands the further inquiry: if Garth Snow's intended goal was to circumvent the cap, allowing him to get assets in return for Streit or Visnovsky, why was trading for Thomas a critical component of allowing them to do so? The math simply does not shake out, further muddling why the hell the Islanders made this move.
Thinking through the situation a little deeper, consider this: Thomas's actual salary is set to be $3 million for the final season of his current deal. Were he to hit the free agent market, what would he fetch? Martin Brodeur just got $9 million over 2 years at age 40. Though he's two years older than Thomas, the latter has been the best goalie of similar age since 2007-08. It shouldn't be unreasonable to think Thomas could get a similar deal in a heartbeat, and would assuredly want a contract paying more than the $3M he'll be owed if he decides to return.
All things considered, it seems that Thomas would have incentive to play for the Islanders, possibly even this year, a concept many have dismissed altogether. If Thomas wanted to maximize his financial gain, he'd probably report before the the end of the season, meaning New York couldn't toll the contract and keep it on their books for next year. The odds seem stacked against this happening, but it's still hard to ignore the money Thomas is giving up by hiding in his bunker.
Furthermore, regardless of whether he plays this season, if Thomas decided to return to the league next year, it stands to reason that the Islanders immediately control a player of at least equal value to the second-round pick they forfeit. Even if Thomas doesn't want to play for New York, the team could easily package him in a trade for another player that could step in right away, adding to an ever-improving young squad. Also, at the beginning of the Evgeni Nabokov saga, it was less than certain he'd ever suit up for the Islanders either. However, when push comes to shove, if Thomas wants to come back to the league and have a shot to make Brodeur money on his next contract, he's going to have to honor the final season of this one.
If New York truly intends to keep him, the team holds all leverage in such a situation. If Thomas does indeed don an Islanders uniform, he'll again be worth his price tag, even if it's only for one season. What is more, it is important to note that Nabokov has been lackluster in 2013, and an elite goaltender like Thomas would immediately solidify what's been a position of concern for some time now.
While it would be rather ignorant to argue that Tim Thomas doesn't provide Lower Limit benefits for a team like the Islanders, the numbers and mere logic behind his value as an asset show that he's also much more than simply an avenue to circumvent the salary cap.
*Note: I refer to salaries on a larger scale for ease of understanding. The proportion of salary spent against the cap remains the same.