Archive for July 2007

Jurcina Signs

July 27, 2007

I just learned that defenseman Milan Jurcina and the Washington Capitals have come to an agreement on a two-year contract. The pact avoids an arbitration hearing that had been scheduled between the two sides for Monday.

If you’re keeping score at home, that’s 18 of 30 scheduled arbitration cases that have settled prior to going behind closed doors (by my count, anyway). Two players (including Washington’s own Brooks Laich) actually went through the arbitration process and 10 hearings are slated for next week.

Monetary Madness

July 26, 2007

Here we go again. Edmonton general manager Kevin Lowe today signed Anaheim restricted free agent forward Dustin Penner to an offer sheet worth $21.5 million over five seasons. Ducks GM Brian Burke now has a week in which to either match the offer, or accept compensation from the Oilers in the form of three draft choices: a first, a second and a third-round pick. With the rumored impending retirements of defenseman Scott Niedermayer and UFA winger Teemu Selanne, Burke probably has enough cap room to match the offer if he chooses to do so.

Penner is one of several players the Ducks have signed in recent years as undrafted free agents out of college. The 6-foot-4, 245-pound Penner began his collegiate career at Minot State in 2001-02, then sat out the following season so he could transfer to U. of Maine. (For the record, Minot State was not compensated when U. of Maine poached Penner.) He played one season at Maine in 2003-04, and the Ducks signed him on May 12, 2004.

Anaheim signed Andy McDonald out of Colgate in 2000 and inked Chris Kunitz out of Ferris St. in 2003. The Ducks have signed several other college free agents who are still in their system, but Penner, McDonald and Kunitz are the most noteworthy; all were integral players on the Ducks’ 2007 Stanley Cup championship team.

A few weeks after signing Buffalo’s Thomas Vanek to a seven-year, $50 million offer sheet (the Sabres quickly matched that one), Lowe set his sights on the 24-year-old Penner, a “veteran” of 101 regular season NHL games.

We’re almost exactly two years removed from the contentious lockout that cost the league, the players and us fans an entire year’s worth of NHL hockey and did damage to the game that is still being repaired. (It’s probably more accurate to say that repairs are being “attempted.”) We’re only two years out from having put in place an economic system that was supposedly fair to all and one that would keep salaries in check, players happy and ownership profitable.

But here we are now, living in a world where a 19-year-old kid and two-year NHL vet (Sidney Crosby) gets a contract that will pay him significantly more than established NHL stars such as Joe Thornton and Jarome Iginla and others.

We’re living in a world where a guy (Penner) with a shade more than a season’s worth of NHL experience (and 45 points in that one season) is now being given $4.3 million a year.

We’re living in a world now where a team thinks it’s a good idea to tie up about 20% of its salary cap allotment in Sheldon Souray and Penner. Which might mean that team is headed to lotto land for the next few years, which might make it worth Burke’s while to take the picks rather than match the offer sheet. It’ll be interesting to see what happens here in the next week or so.

If Burke does match, Lowe may then set his sights on someone like New Jersey’s Zach Parise or another high profile RFA. He’s done it once, he’s done it twice, what’s to stop him from striking again? Only Lou Lamoriello getting Parise’s signature on a deal as a pre-emptive measure.

Here’s another item that puts a bit of a different wrinkle on things. In the two years since the lockout’s end, the salary cap has risen from $39 million to $50.3 mil, a climb of 29% in a span of just three seasons. But that growth simply has to slow in the years ahead. The trouble is that salaries have shown no sign of slowing down.

Scott Gomez made $2,204,000 in 2005-06. He had a great year, putting up 84 points. His next one-year deal — an arbitration award — paid him $5 million. He backslid from 33 goals to 13 and dropped all the way to 60 points in 2006-07, but his salary skyrocketed in the other direction. Recently, Gomez signed a contract with the Rangers that will pay him $51.5 million for the next seven seasons. He’ll actually be paid $10 million in 2007-08, but the Rangers’ cap hit over the life of the deal is $7.357 per year.

In the same span that the salary cap rose 29%, Gomez’s salary went up more than 300%. Sure other salaries around the league have gone down since then, but the bottom line is this: if lucrative multi-year contracts are signed under one salary cap figure and that figure subsequently declines, there will be trouble.

If revenues drop and cause the cap to do likewise, guys like Gomez and Crosby could find themselves taking up more than 20% of their respective teams’ salary cap total. And their teams’ GMs might be put in the unenviable position of moving players in trades just to fit big-ticket guys under a shrinking cap.

The cap is based on revenue, right? So it would appear that revenue has risen at a strong rate, which is the whole idea. But we all also know that the NHL is a gate-driven league. According to ESPN’s attendance figures (which are compiled from figures given by the clubs themselves at each game), two-thirds of the league is already playing to 90% or better of capacity, and more than half the league is above 95%.

Aside from growing the attendance totals of the teams on the bottom third of the list (six of the bottom 10 were non-playoff teams and three others didn’t get past the first round), the only way to raise revenue would be to sell the “new look” jerseys for $400 or so, or to raise ticket prices. It’s hard for me to see how ticket prices can go up much more in most markets, so I believe we’re about to enter a period of slow growth (or even decline) for the salary cap. Also, even if there is growth in the attendance of the bottom 10 teams on the list, you’ll likely also see some other clubs slide in the standings, and then at the gate as well.

Revenue can fluctuate, so can the salary cap. Attendance can only go up to arena capacity, and is far more likely to decline once it reaches a certain level. The only way to make more revenue is to raise prices, and that should only happen once capacity is reached. Contracts are being signed as if the cap will continue to climb at its current rate, but can anyone show me how this would be possible?

There just doesn’t seem to be much “vision” being exercised in some of the front offices around the league. If the salary cap holds or drops even a few million, the Rangers and a handful of other teams are going to have some problems.

Much was made of Crosby’s altrusitic nature in taking less money than he could have made when he recently signed his five-year contract extension. He could have gotten a maximum of $10.06 million under the current 2007-08 cap, and yet he “settled” for a figure of $8.7 million per season. That savings ($1.36 million a year) is not enough for the Pens to pay the salary of defenseman Mark Eaton or forward Ryan Malone for this year or next season. Eaton and Malone are nice players, but are hardly key cogs in Pittsburgh. Evgeni Malkin is, and so is Jordan Staal. And those two will have their respective hands out soon enough. What then?

It’s crazy, and none of it is doing the Caps any favors. Washington is already looking to get Alex Ovechkin’s signature on a contract extension. And Caps fans are already getting antsy and suggesting Washington needs to lock up Ovechkin as soon as possible, even if it means giving him longer term and more money than Crosby got. The Caps need to lock up Ovechkin, and they want to lock up Ovechkin.

But what if every indication pointed to the salary cap going down next season? Would it still be prudent to go ahead and sign him now for $60 million over six years (too much, in my opinion), or better to wait and be able to get him for $57.6 million for six years (still too much) if the cap were to drop to $48 million in 2008-09? These are the hard questions that must be asked.

We can also hope that Ovie grants the Caps a bit more of a “discount” than Crosby did the Pens. Chris Clark certainly did so when he signed his three-year extension last week.

Right wingers Shane Doan ($4.550 million a season), Bill Guerin ($4.5 million a year), Scott Hartnell ($4.25 million), Todd Bertuzzi ($4 million) all recently signed multi-year deals that Clark and his agent could have used as the basis for their own number.

Doan is a better player than Clark, has had a better career than Clark and is roughly the same age, but has only seven more goals than the Caps’ captain over the past two seasons.

Guerin is five years older than Clark and has scored one fewer goal than Clark since the lockout ended. He’ll make $9 million over the next two seasons, less than Clark will be paid for the next three.

Hartnell is several years younger and has a lot of upside. But is he really that much better a player than Clark that he should earn a salary that’s more than 50% higher than the Caps’ captain? The Flyers think so.

Bertuzzi is a year older than Clark. A back ailment limited him to 15 games last season. But if one GM thinks he’s worth $4 million a year for the next two seasons, that’s all it takes. Burke is that one GM.

Blues right wing Lee Stempniak has played in all of 139 NHL games, totaling 41 goals. But he will earn just a shade below what Clark will be paid over the next three seasons, Stempniak’s contract is identical to the one just signed by Carolina right wing Scott Walker, a 34-year-old veteran of some 688 NHL games.

When it comes to NHL salaries, it is hard to find any rhyme or reason. General managers and owners would likely be happy negotiating a new deal for every player, every year. That’s a radical system proposed many years ago by former Oakland Athletics owner Charles O. Finley. Players and agents wouldn’t want any part of such a system, because it would much more accurately reflect a player’s actual “worth” at any given time.

One or two renegade GMs can skew the league’s salary structure and impact contract negotiations around the league for years to come. It’s what led to the lockout of 1994-95 and the lockout of 2004-05. I hate to even bring it up, but some of the foolishness we’re seeing now could be responsible for the next NHL lockout.

It’s great for players to be able to make as much money as they can, while they can. The career shelf life of a pro athlete is a very finite thing. The problem is that once profits began turning into losses, owners are always asking the players to empty their pockets. The most recent lockout was all about owners telling the players: “We can’t stop ourselves from spending, we need your help.” That help of course, came in the form of a salary cap and a 24% rollback of existing contracts at the time. What’s next? We can only wonder.

Much Ado About Nada

July 25, 2007

Maybe it’s a slow news day or maybe it’s the middle of July but the blogosphere AND the mainstream media seem to be in a big hurry to pile on the Staal brothers, Eric and Jordan, who got into a bit of a kerfuffle with Johnny Law after a Eric’s bachelor party last weekend.

I won’t provide a link or any sordid details (to me, there aren’t any to provide), and you can certainly find them for yourself if you’re one of those enquiring mind types. For all I know, thesmokinggun.com may have the mug shots and police reports signed by Chief Wiggum by now.

No one got hurt, no one was exploited, no lives were ruined. Jordan Staal is underaged, and shame on him for drinking before he turns 21. Because I know the rest of us all waited, didn’t we?

To me, the most disturbing aspect of this entire affair is that a 22-year-old millionaire is on the verge of getting married. Not the career move I’d make.

Get back to me when you’ve got a real story here. Nothing to see with this one, move along.

The Verdict

July 25, 2007

Is finally in. Brooks Laich will be paid $725,000 for his services during the 2007-08 season. No definitive word yet on the one-way/two-way angle, but I’ll post that news as soon as I learn it.

Confirmed: It is a one-way deal.

Tim Leone on Dave Fay

July 25, 2007

There have been (and deservedly so) a lot of great things written and said about my late friend Dave Fay in the last week. But today from up north comes one of the most eloquent tributes of all.

Those of you who follow the Hershey Bears on a regular basis know what a terrific writer and reporter Tim Leone is. It will come as no surprise to you that his tribute to Dave is quite simply a must read. Those of you who are less familiar with Tim’s work are in for a treat, the first of many if you keep reading his work in The Harrisburg Patriot-News and on PennLive.com.

Thanks, Tim. See you in September.

The Laich Case

July 24, 2007

At 9 a.m on Monday in Toronto, an arbitration hearing to determine Brooks Laich’s salary for the 2007-08 season was held. Laich, a two-year veteran of the NHL, earned $551,000 as a rookie in 2005-06 and earned $606,100 as a sophomore in the league last season.

Judging by some of the things being written (mostly on other blogs and on message boards) about Laich and his decision to opt for arbitration, you’d think the guy had a screw loose or something. Lots of people are wondering why a guy who totaled eight goals, 18 points, had 29 penalty minutes and was a minus-2 in 73 games would be looking for a big raise. He could have just signed his qualifying offer, which would have given him a salary of $666,710 for the upcoming campaign. I guess most people figure that’s plenty for an 18-point guy heading into his third NHL season. I can see how some would think that, but as usual it’s just not that simple.

First of all, if an agent is worth his salt, he’ll look at Laich’s performance and salary and compare it to similar players around the league. This is why the arbitration process exists. If he thinks a lot of similar players make a lot more money, then he’ll probably advise his client to opt for arbitration. It’s also possible that Laich and/or his agent have no problem with the monetary portion of the club’s qualifying offer, and merely want a one-way contract for the same or similar money. It’s important to note that Laich had a two-way deal in each of the last two seasons. He more than likely would be angling for a one-way deal this time around.

One common misnomer in the process is the concept of “comparables.” Yes, both sides will present comparable players in their cases, but those comparables are looked at from the standpoint of when they signed the contract that made them comparable. In other words, you can’t just look at Laich’s stats from 2006-07 and find other players with similar numbers and see what their earnings are.

For the purposes of comparables, “platform years” are used. A platform year is the year in which a player “earned” his subsequent contract. Anyone signing a (non-entry level and non-UFA) contract this summer for 2007-08 would have a platform year of 2006-07. So “comparable” contracts basically include those negotiated by other Group II (restricted) free agents. For the sake of comparables, the players’ age and position should also be similar, if not exact. Any comparables in the Laich case are almost certain to have 2005-06 or 2006-07 as their platform season.

San Jose’s Marcel Goc and Minnesota’s Dominic Moore would both appear to be reasonable comparables. Both have similar career stat lines to Laich’s, both are close to Laich’s age and both players negotiated contracts for last season on the basis of 2005-06 platform seasons. Goc earned $775,000 in 2006-07 and Moore made $700,000 for the same season. Looking at these players and their platform years provides a snapshot of the player at that stage, and gives the arbiter a basis from which to make a salary determination; the arbiter will also take into account the players salary for the upcoming season.

Washington’s Brian Sutherby would not qualify as a comparable in Laich’s case because he has played more than 100 more games during the course of his NHL career.

Each side is allotted time to present its case to the independent arbitrator, and each side is also allowed time for rebuttal. Many factors go into the arbitrator’s ultimate decision, not the least of which is the use of comparable players introduced into evidence by the two sides. The club can elect for a one-year or a two-year award, unless the party is one-year away from unrestricted free agent status, in which case the club can only opt for one year.

Both sides prepare briefs that cannot be more than 40 pages in length. Both sides are looking to use the most advantageous comparables to their case, but the case is made up of much more than just comparables. Each is trying to paint a portrait of the player, but they’re obviously using different brushes.

If I were Laich’s agent, I’d note that my client didn’t play much early in the season when Rico Fata was still around and Richard Zednik was healthy. But from Dec. 1 on, Laich had eight goals and 17 points in 55 games to go along with a plus-7. He compiled that plus-7 during a stretch in which the team was 17-31-8. Laich was a healthy scratch just once in those final 56 games of the season.

Of course if I were representing the club, I’d argue that he only got significant playing time once injuries began to decimate the roster and that there was a reason he was not playing much early in the season.

On the surface of things, Atlanta’s Jim Slater would appear to be perhaps the perfect “comparable,” especially if you’re Laich’s agent. Both players have completed two seasons in the league, serving mainly as third- and fourth-line centers. Slater has played in 145 games, totaling 15 goals, 39 points, 108 PIM and a plus-9 while playing just over 10 minutes a night. Laich has 15 goals, 40 points, 57 PIM and a minus-12 while playing about 12 and a half minutes a night.

Slater had five goals and 19 points with a plus-8 in 74 games last season. Laich had eight goals and 18 points with a minus-2 in 73 games last season. Slater earned $900,600 last season, getting nearly 50% more compensation than Laich for essentially the same production.

But Slater is not deemed to be a comparable simply he has not come to terms on a 2007-08 contract. As the final year of an entry level pact, Slater’s last deal originated on the basis of draft position more than anything else. Slater was a first round draft pick (30th overall in 2001) while Laich was selected in the sixth round (193rd overall) of the same draft.

Ironically, Laich’s upcoming award may be used in Slater’s own arbitration case next week.

It’s useful to think of buying a house when you’re thinking of comparables. An appraiser looks at the house and assigns a value to it, and part of that process involves comparing it to similar homes that recently sold in the same neighborhood. But you can’t compare a four-bedroom duplex with a two-bedroom ranch. And you can’t compare a house built in 1948 to one constructed in 1998.

The arbiter must issue his ruling within 48 hours of the hearing. It’s important to note that once the hearing begins, whatever negotiations that may have been ongoing between the player and the team cease. At that point both sides have agreed to leave the matter in the arbiter’s hands.

Finally, clubs are permitted to walk away from arbitration awards above a certain monetary threshold. That is not likely to be a factor in the Laich case. In order for a club to walk away from an arbitration award this summer, the arbiter would have to award that player an annual salary greater than $1,221,304.

All that said, it’s hard to hazard a guess as to what the arbiter might award Laich for 2007-08. Not being present at the hearing or knowing the comparables, etc., I’m guessing he could get anywhere from $650,000 to $900,000, but he is almost certain to get a raise over his qualifying offer. This whole process illustrates the diligence that each club must attach to the negotiation of each contract, though. If you throw money around in a cavalier fashion when you negotiate RFA deals, it can come back to bite you and your 29 peers via the arbitration process.

It’s been said before (by a major league baseball GM, I believe), but it bears repeating: “We operate at the mercy of the worst decisions of our dumbest competitors.”

Ovie’s Finger is on the Pulse of the Disco Ball … and Dishes

July 24, 2007

My good friend Dmitry Chesnokov has once again spanned the globe to bring news from Russia. Moments ago, he sent the transcript of a conversation between Sovetksy Sport reporter Pavel Lysnekov (whom we had the pleasure of meeting while we were in Moscow earlier this year) and the Capitals’ Alex Ovechkin. Also contained in the missive is a chat between Pavel and the man who is training these Russian NHLers this summer in St. Petersburg, Dmitry Kapitonov.

Washington Forward Alex Ovechkin: We Live Here Like It’s a Pioneer Camp! [full article]

Ovechkin arrived in St Petersburg from Saransk, where he took part in the national “Shumbrat, Finno-Ugria” festival. Alex came to the gym fresh and upbeat even though he was coming straight from the airport.

– Alex, what took you to Saransk?

– I was invited to go there. My mom also came as did Alexei Nemov [Olympic champion – gymnastics]. We loved it! I gave a “master class” to kids, showed them a few hockey tricks. Two teams battled for a prize – my hockey stick. A new arena was built there, hockey in the republic [of Mordovia] is on the rise.

– Do you follow the news from the NHL? Your friend Dainius Zubrus signed a contract with New Jersey not long ago.

– Yes, I spoke with Zubie three days ago. It’s a shame that he was traded from Washington. But at the end of the day, Dainius got what he wanted. I am very happy for him.

– What do you think about Yashin returning to the Superleague?

– I don’t know all the details, although Yashin probably won’t lose anything in this situation. I think NHL clubs will still be interested in him. Alexei himself can play in Russia at [Alexei] Morozov’s level. Remember how great he played in the Superleague during the lockout.

– This is the last year of your contract with Washington. Do you realize that you have to have an exceptional season to raise your earnings?

– If I think only about money, nothing good will come of it. But I changed my preseason training schedule. I started [training] in the beginning of July, just like other guys from the Superleague. That’s about a month earlier than last season. My training [last year] did not go well. I went to Canada to train with my personal fitness trainer. The training load was OK but not “physical”, but weight lifting for various parts of the body. Most of the time not those [body parts] that a hockey player needs. That’s why during the last season sometimes I felt like I didn’t have enough strength.

But here in St Petersburg it is great! We all train together, help each other. We are hanging out like it’s a pioneers camp [boy scout camp]! Dmitry the coach is our team leader. Sergei Gonchar kept saying how good he trained here before the start of last season. He suggested I come here too. And I don’t regret it!

– I was told that in the beginning Gonchar could hardly handle the new training system.

– And I didn’t even finish my cross-country run the first time! My pulse was 210, but now it is 176. The progress is evident.

– Do you run listening to music?

– Yes, everybody has a player. I play Eminem. Because of it running is especially rhythmic.

– Why did you decide to stay at the trainer’s house in St Petersburg?

– There are always parties at his house. There are always a lot of beautiful girls, a dance floor. And in the bedroom there is a huge disco ball and a pole to all the way to the ceiling. [Ovechkin says it with a straight face and then can’t hold it any longer and bursts out laughing.]

– Our Canadian colleagues [guys from CBC traveling with Sovetsky Sport] were amazed: if Sidney Crosby went to an ordinary city gym in the States he would be torn apart for souvenirs. And you just come here and train with ordinary people.

– That doesn’t bother me. Yes, I do see that people recognize me. But this is the difference in Russia that no one throws themself at me and don’t disturb my personal space.

– Crosby has already signed his extension with Pittsburgh. How are your negotiations with Washington going?

– I don’t want to talk about it. The fact that Crosby signed his new contract and I have not doesn’t make my pulse rush.

Link to the story

*****************

Windy City – 2 [excerpt from the article]
These days Alex Ovechkin, Evgeni Malkin, Sergei Gonchar and other Russian NHL players are sweating at their training camp in St Petersburg. Sovetsky Sport decided to pay the guys a visit.

It is quite rare to see a dozen [Russian] NHL players live and train together. Last time such a training camp was set up in Chicago last year by Vladislav Tretyak. He thought that such informal setting and “togetherness” would help the players better prepare for the World Championships in Moscow. But now there is no need to go so far to the Windy City. St Petersburg is closer. And there is plenty of wind.

Nashville forward Alexander Radulov is the first to arrive. Alexei Semenov is next followed by Sergei Gonchar and Evgeni Malkin who stays with Gonchar even in St Petersburg.

– Dmitry

, how many [Russian] NHL players are attending your training camp this year?

– Let’s see. Ovechkin, Gonchar, Malkin, Semenov, Radulov. Viktor Kozlov is coming over tomorrow, and Sasha [Alexander] Semin is coming on Sunday. Andrei Taratukhin is also here. Andrei Nikolishin also came over but had to go back to Moscow.

– What is so new about your training routine?

– There was nothing new invented in the last 100 years. I used to work with figure skaters before – Olympic champions Tatyana Navka and Roman Kostomarov. Then I switched to hockey players.

– What kind of shape is Nikolishin in? Would he be able to cut it in the NHL?

– By the way, he is in the best physical shape [comparing to others]. His major flaw is that he doesn’t know when to stop. This is the Dynamo Moscow school. But one needs to rest as well to let the muscles repair.

– Do you have Ovechkin do a lot of weight lifting?

– No, he is working with a fourth of his load. It is enough. This is because a hockey player doesn’t need to be beefed up like an elephant, but needs to be flexible and have great endurance.

– Is he staying with you?

– Yes, it is more convenient. And more useful. For example, I taught him how to wash dishes after himself.

Ovechkin yells: “I knew how to wash the dishes!” Ovechkin is on the treadmill, then working with weights. In between he asks about the news.

– I read in Sovetsky Sport that Dynamo Moscow wants to get Jeff O’Neill [to play in Russia]. Is it so? [It should be noted that Alex always follows his former team in Russia.]

– Not exactly. Dynamo President said that they are talking with a Canadian player who was a first round pick. Eric Lindros and Jeff Friesen also fit that description.

– No, these two won’t come. I heard that Lindros was going to retire. And I talked with Friesen when he played in Washington. I suggested he tried tp play in the Superleague. But he thinks that wild bears roam the streets in Russia. He said that he could find a team in the NHL.

– How do you have fun here?

– We go to the movies. Not long ago Malkin, Radulov and I went to see The Transformers. Alright, I have to go train some more.

– You don’t spare yourself, Alex.

– Enough rest! The new season is almost here!

Link to the story