The sky ain't falling
NHL salaries are rising, but revenue sharing is next.
Posted: Tuesday August 7, 2007 5:50PM; Updated: Wednesday August 8, 2007 2:23PM
I'm not sure about your neighborhood, but there have been no signs of plagues, pestilence or frogs raining down from the sky in mine. Maybe I'm just spending too much time indoors listening to talk radio or reading through my mail because going by all that, it sounds like some fans think the hockey world is rapidly heading toward end times.
In the wake of the Dustin Penner deal (five years, $21.5 million), I'm repeatedly hearing phrases like "rampant salary escalation" and "two-tier league" and "can another lockout be far off?" I haven't seen this kind of panic since the Tim Horton's at Air Canada Centre ran out of maple donuts midway through the second period.
It's time to tap on the breaks there, sports fans. The Penner signing was not the seventh sign of the impending apocalypse. In fact, we're not seeing salary escalation so much as salary re-allocation.
Semantics? Maybe, but it's an important distinction.
Yes, it appears the average annual paycheck will hit $2 million this season. That's about 10 percent higher than the pre-lockout average of $1.8 million, and further proof that an NHL job is nice work if you can get it. But it's not the amount, it's how the money's being spent that should be the focus. That's because, the Todd Bertuzzi signing (two years, $ 8 million) aside, dollars are being dished more wisely than ever.
The old system, which restricted movement to players who were heading into the twilight of their careers, featured high-end contracts that reflected former glories more than what the athlete could do to help the team in the future. As a result, you saw bloated salaries that far too often were not commensurate with an athlete's contribution to his club. Not that it mattered, really. It was just money back then, and GMs simply spent whatever pile their owner placed in front of them.
This summer, we've seen the exact opposite. Sure, there's still the occasional eye-popping free agency deal handed out, but the big money is going to players who are still in their prime, thanks to earlier eligibility. More tellingly, teams are awarding lucrative deals to not-yet-primer-timers based on what both sides believe the player will accomplish over the duration of the deal. Now, this makes sense. Granted, some clubs will get maple donuts for big green dollars in the early years of some deals, but over the long haul -- and many of these deals are five years or more -- they'll get value for their money if the players mature into the core components they're supposed to mature into.
That's why Detroit was so eager to offer Pavel Datsyuk $47 million over seven years, or why Patrice Bergeron was locked in by the Bruins for $23.75 million over five years. Serious commitments to be sure, but under this system, smart GMs take care of their core players on their own terms before anyone else gets a chance to jump into the mix.
Losing a young player like Penner or having to pay Thomas Vanek far more than expected does hurt the progress of teams like Anaheim and Buffalo. But at the same time, both teams could have ensured that matters didn't get to the point where they had to make a decision at knife point -- and they failed to do so.
Sure, those contracts will be used as comparables in future negotiations, but they're hardly harbingers of economic doom. That's because there's still a cap, and GMs are allowed to spend up to that amount and no more. Each has to look at his roster, decide who he wants to keep and how much he's willing to pay in order to build a winner. Younger, more productive players are earning a shockingly larger slice of that pie while aging vets and role players will have to settle for what's left.
Eventually, a team's spending will either hit the proscribed cap or one that's been internally set, so the best GMs will be those who best manage their assets rather than the guys who have had a blank check provided to them. That's how it should be.
This summer's dealings have brought one serious issue to the forefront, and that's the cap floor. Already, several teams are being forced to spend more than they did pre-lockout to meet the minimum of $34.3 million. And in some of those towns, the local realities mean even a full house won't necessarily make for a profitable endeavor. Now that cost certainty has been achieved, look for the next battleground to be revenue sharing that addresses the wide disparities of the NHL's current markets.
Brother, that meeting will make pestilence look like a picnic.