The recently agreed CBA extension and MOU (April 2020) includes provisions suggesting a flat salary cap for years to come, and as a result, general managers and players have experienced an unprecedented draft, free agency and arbitration marketplace this fall. NHL league activity is expected to continue under a particularly unique context caused by loss of hockey related revenue from the Covid-19 pandemic, and the upcoming Seattle expansion draft.
Under this challenging and uncertain financial landscape, I endeavored to conduct contract research to better identify league-wide contract negotiation trends and evaluate anticipated flexibility of NHL team’s salary cap structures by looking at:
– No-trade clauses
– Signing bonuses (S.B.)
– Injury reserve (IR) and long term injury reserve (LTIR)
Previous Contract Analysis Work
Having started my journey in analytics with the opportunity to grow as part of the inaugural hockey-graphs mentorship program, it is a privilege to take this opportunity to build on the inspiring contract negotiation and player valuation work of Matt Cane (The Time Value of Money and Player Valuation), Mike Zsolt (The Financial Frontier: Defining characteristics of competitive salary cap management), Josh and Luke Younggren (Projecting NHL Skater Contracts for the 2019 Offseason), and Shayna Goldman (ISOLHAC: How can we better our contract analysis), amongst other distinguished leaders in the analytics community.
Contracts
Ryan Johansen – How much is he worth on a Bridge Deal?
Courtesy of Wikimedia.org
The Ryan Johansen contract dispute is the biggest contract talk going in the NHL as training camps begin, as you might expect. Johansen is young, with a great pedigree (4th overall in 2010), and is coming off a seemingly breakout season that also led Columbus to its first playoff relevance in quite a while. And yet Johansen is unsigned and is unlikely to be so going into camp, with the Columbus front office opening fire this week on Johansen’s agent.
Both sides have seemingly agreed at least to a bridge deal – Johansen at first was seriously against such a deal, but has since agreed a 2 year deal is acceptable. But they are WAY apart on the money – reports have Columbus at 3 to 3.5 Million over 2 years while Johansen is sitting at 6 to 6.5 Million. But what is reasonable for a player’s first two RFA years?
A quick note: This article is considering how much those years are worth in the league’s current economic structure, which is team friendly and makes RFA deals less pricey than UFA ones. You can argue whether this is unfair to the player or not (it’s not), but if a player wants to fight the system is recourse is to either go to the KHL or not sign and “hold out” – see Ryan O’Reilly a few years ago for an example. Since nearly all players don’t want to do that and accept the league’s economic framework eventually, that’s the framework we’ll be using for this post.
Hockey Graphs 