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Crazy NHL Contracts

The Chicago Blackhawks signed Marian Hossa to a TWELVE YEAR, $62.8 million deal today in what can only be classified as an idiotic contract. It’s not that Hossa is not a great player or that he does not deserve the deal. It’s the length of the contract.

Unlike the NFL and MLB, the NHL (and NBA) has a salary cap, meaning that each team can only spend to a certain, defined amount. For next season, the cap is $56.8 million, a $100,000 increase over the cap last season. Hossa’s contract is worth $5.233 million per year so that means that nearly 10% of the Blackhawks’ money is tied up in Hossa next season. Hossa is just one of twenty plus players that Chicago will have on its roster next season.

Now, that still leaves a large amount of money for Chicago to spend on the rest of their roster. Hossa is a terrific player and he will certainly help the Hawks next season, but next year is not the problem with the contract. Five years from now, what is the cap going to be?

The answer is that no one knows. It could be $70 million or it could be $40 million. If it’s the former, than Hossa’s contract will be a steal. However, if it is the latter, then the Blackhawks are in trouble. Think about it. If the cap drops significantly over the next decade, then the Hawks are going to have significantly less money to use, but Hossa’s contract is still going to be worth $5.233 million. All of a sudden, Hossa takes up %15 or more of the team’s budget and they are not able to put together a competitive roster.

With the salary cap, signing long-term deals is extremely dangerous, but a 12-year contract is just stupid. Add in the fact that Hossa will be FORTY-TWO when his contract is up and this contract has the potential to set the Blackhawks back a decade. The Blackhawks are counting on Hossa being worth 10% of the team’s budget next season. Fine, I believe that is the case. But in 10 years when Hossa is 40 years old and at the end of his career, how much is he going to be worth? With the value of his contract, Hossa could be making an even higher percentage of the team’s budget, but adding much less to the team.

Want to hear an even crazier contract? Listen to this. In 2006, the New York Islanders signed goalie Rick DiPietro to a 15 year, %67.5 million contract. WOW. Sure, DiPietro is a very good goalie and has earned $4.5 million over the last few years, but once again, the salary cap is the issue. No one knows what it will be so is DiPietro going to be worth %4.5 million of the Islanders’ cap when he is 40 years old in 2021? Once again, no one knows. What happens if DiPietro gets worse and can’t stop the puck? The Islanders have locked up all this money in a player who they have no idea what he will be in 10 years. Then, they have him for five years after that. Is DiPietro’s dad the GM of the Islanders?

The Sedin Brothers both signed 5-year, $30.5 million contracts today with Vancouver. The Canucks just put $12.2 million dollars a year over the next five years in to two players. That’s more than 20% of the cap locked up in two guys, neither of whom is an elite player (both very good, neither elite) in the league. Like the Blackhawks and Islanders, the Canucks have significantly hurt themselves by signing the Sedin brothers to long-term deal. Luckily, their deals only set Vancouver back half a decade while Chicago and New York both find themselves with big, long-term contracts that are going to suck up their budget and damage their chances of winning for years to come.

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Categories: NHL
  1. July 1, 2009 at 10:56 pm

    there’s actually some logic to this… it keeps the salary cap number down a bit and players on deals like this may well choose to retire rather than play the last couple years of the contract for very low base salaries (these contracts tend to be front-loaded, which doesn’t affect the cap number but could either lead to retirement or make a team just looking to meet the NHL’s minimum payroll have interest in trading for the player)

  2. July 13, 2009 at 10:22 pm

    I looked into the Hossa deal more and you’re right about it being front loaded, but how does this keep the salary cap number down? It is still impossible to know what the cap will be in 7 years when Hossa is still making a TON of money. Hossa will be much older and worse then, but making the same amount of money and the cap could be signifcantly lower (or higher). If it is a lot lower though, then you are paying a huge chunk of your cap space to a player who won’t contribute much. Front-loading the contract helps, but long term contracts still have the potential to really hurt teams in the long.

    I am wondering though, how do long term deals keep the cap low?

  3. Sami
    December 20, 2009 at 3:32 pm

    You’re both missing the point here a bit (I realise that this post is months old but thought that I should post anyway). It doesn’t lower the cap hit or create certainty with respect to the cap so long as the player is playing. The point, we can only assume, is that players who sign these long-term contracts are NOT going to be playing out the final years. Once they’ve retired, that cap hit comes off the books entirely!!

    Say that I’m 34 years old. I’m willing to play five more years and I want to be paid 30M for my services. The team, on the other hand, can’t afford a 6M cap hit per year. Fine, sign me to a 10 year contract worth 40M. Pay me my 30M over the first five years of the contract, and 10M over the last five. This way, the cap hit is only 4M/year. When I retire after five years, the last five years of the contract no longer count against the cap… So I got my contract AND the team freed up 2M/year to spend on other players.

    Also, the reason that I decided to post in the first place, the NFL does have a salary cap, and it’s a hard one like the NHL’s (the NBA has a soft cap).

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