THE BOOK--Playing The Percentages In Baseball

I’m surprised the Hawk players didn’t wait around until the ruling to see if they could get more.  Especially Barker, who probably would have fetched a ton on the open market.

I suppose Chicago got aggressive about re-signing them in order to save face.

I watch a bit of hockey (enough to joke at work that Chicago will win the West and lose in the Finals after this signing), but I don’t really follow the business side of the sport. Can someone enlighten me as to how it’s logical to sign a guy north of 30 to a 12-year deal? Can NHL teams cut players without penalty (a la NFL), do they have guaranteed contracts (a la MLB), or is it more like the NBA, where teams can buy out a guy every now and then and have him not count against the cap?

It’s basically a salary cap loop-hole.  There are two important facts:

1) In the salary-capped NHL, the “cap-hit” for any contract is the average $/year of the deal.  So if you sign a 3 year, 21M deal, then your cap hit is 7M for each of the three years, regardless of how the contract is actually structured. 

2) If you sign a guy younger than 35 to a deal and he retires, his cap hit for the rest of the deal is zero.

So, combining 1 and 2, you can sign an under-35 player to a very long deal with “tack-on” years, in order to reduce the average value of the deal, and thus, the cap-hit.  The player anticipates retiring before those tack-on years come into play, so everyone wins. 

In Hossa’s case, his contract looks like this:

09-10 --- $7.90 mil
10-11 --- $7.90 mil
11-12 --- $7.90 mil
12-13 --- $7.90 mil
13-14 --- $7.90 mil
14-15 --- $7.90 mil
15-16 --- $7.90 mil
16-17 --- $4.00 mil
17-18 --- $1.00 mil
18-19 --- $1.00 mil
19-20 --- $0.75 mil
20-21 --- $0.75 mil

So, for him, it’s essentially a 7year, 55.3M deal that takes him through his age 37 season.  At this point he will probably retire, or maybe play another year at $4M.  But chances are he’s not going to play out those last 4 years of the deal.  It’s somewhat of a risk for him, but it’s a huge benefit for the Hawks GM because instead of having a cap hit of 7.9M (the first 7 years,) they only have a cap-hit of 5.2M

@Ryan,

Thanks for the explanation. That’s quite a loophole.

Not to mention that they can buy out his remaining years at two-thirds the contract value left, and then spread the cap hit at half the price over double the number of years.

I can’t wait to see when DiPietro’s 16-yr deal gets bought out.

Versteeg ended up resigning for $9.25/3.  I don’t know enough about hockey contracts to say what the error did to his compensation, but as a Blackhawks fan I’m glad he didn’t leave.

Btw, I don’t think it’s a “loophole”.  I would say it’s very much a “design feature”.

Btw, I don’t think it’s a “loophole”.  I would say it’s very much a “design feature”.

Exactly.  And there’s a third benefit to it: if Hossa decides that he’s enjoying himself too much (or is still chasing that ring) and the Hawks don’t want him around at age 38 or 39, then the very low salary at the end makes him much easier to trade.

RDP’s deal, however… sigh.  Totally misunderstood.  Everyone calls it a terrible idea and laughs at the Isles for offering it, but how many guys since have signed for eight or ten or twelve seasons?  It was groundbreaking, not dumb.  Paying $4.5 million for the All-Star quality keeper that he was (and especially on those talent-poor squads) is great value… it’s neither his nor their fault that the poor guy’s hips are made of cardboard.

Sorry to go on.  It’s tough being an Islanders fan in New Jersey.  (Or anywhere else, actually.)

Man, what a nice guy. 

IIRC, the first three years of your contract is capped, so he got himself a good deal.  But, he could have gotten a way way way better deal if he was declared a free agent.

It was almost like he split the difference and took 50% of what he could have gotten had he been declared a free agent, even though there was likely a much more than 50% chance of being declared a free agent.

My guess however is that at the conclusion of his contract he WILL be declared a free agent.  That is, the grievance will continue, and rather than waiting until his 7 years or 27 years of age for free agency to kick in, the conclusion of his contract will make him a free agent.

He gets a decent enough deal, stability, and playing with a top and young team like the Hawks.  It’s one of those moves where he values happiness and stability alot, while still having plenty of time to reap the rewards in his early 20s.

Night: commented on the DiPietro deal when it happened:

http://www.insidethebook.com/ee/index.php/site/comments/15_year_hockey_deal/

As a follow up to my point (2) above, if the player’s deal starts after the age of 35, the team is stuck with the cap hit for the remainder of the contract, even if the player retires.  It turns out the Flyers might have shot themselves in the foot with this:

http://www.tsn.ca/blogs/darren_dreger/?id=284062

Page 190 of the CBA:

It specifically says when the deal was signed.  Pronger was not 35 when he signed the deal.

Why would the NHL says otherwise?

The parenthetical comment is to establish his age for cap purposes, which is June 30.  i.e., his “seasonal age”.  That has nothing to do with the issue here, which is when did Pronger sign his deal.  He was not 35.

It is very terribly written.  Isolated:

“[S]igned when the player was age 35 or older (as of June 30 prior to the League year in which the SPC becomes effective)”

The contract becomes effective for 2010-2011.  On June 30 prior to that Pronger will be 35.  If it’s really just “when it was signed” then why include the parenthetical at all.  And if it is supposed to be the way the NHL interprets it, then why use the word “was signed” and not “took effect” or some such. 

It was signed when the player was at such an age where he would be 35 years or older by the time it took effect...? I don’t get it at all.

I agree that it is poorly written.  The part that is understood is: “...which was signed when the player was...”. 

So, that is very clear.  If it is completely irrelevant when he actually signed, and it only matters when the contract is effective, then “was signed” would not appear anywhere, right?

So, that “was signed” exists in the CBA means that it is important in the timeline.  You need to know when something was signed.

I posted the following on mc79’s site:

Look at p.189 (50.2.C.2.ii), which is the section for Performance Bonuses:

“Players aged 35 or older as of June 30 prior to the league year in which the SPC is to be effective, who have signed a one-year SPC for that League Year”

Now, this part is unambiguous. It establishes when the integer of his age is calculated (Jun 30, 2009 for the upcoming season), and it is for the upcoming season (because it says “effective”), and it says that he signed a one-year contract for that particular season (without saying WHEN he actually signed it, be it Jul 1, Jun 29, or three years ago he signed a one-year extension).

This is not at all what we see one page later which specifically says “which was signed when the Player was age 35 or older”. The parenthetical part that follows that statement is there ONLY to tell us how to calculate someone’s age. The parenthetical part applies only to the age part of the clause and not to the entirety of the clause.

If it applied to the entirety of the clause, then it would be in conflict with the “which was signed when” part. If it applies only to the “age 35″ part (which is to say how do you figure a player’s age), then it is unambiguous. Seeing that on page 189 they make it very clear that the purpose of the “June 30″ is to determine that’s when you calculate his seasonal age, and seeing how they did not duplicate the wording of the entire clause of page 189 to page 190 (which they could have), then the key phrase on page 190 is “which was signed when”.

If it was irrelevant when he signed the contract, then page 190 would look like page 189. It does not. In order to make this agreement unambiguous, then you have to apply the parenthetical part of p. 190 to mean only the seasonal age calculation, and you must maintain the “which was signed when” clause literally.

***

To answer a previous issue: On p.203, it says “and regardless of whether or where the player is playing”. Since they explicitly handle the retirement scenario in the illustration, this overrides however you want to define “earned”.

http://www.mc79hockey.com/?p=3173

Well, well, well.  Dale Tallon of the Blackhawks was fired, and replaced by the asst GM Bowman:
http://espn.go.com/chicago/story?id=4325783

Weird, no?  The asst GM is often the guy who takes care of the dotting i’s and crossing t’s.  And the Hawks did not submit the qualifying offers in time.  Something that you would think that Bowman is responsible for, and that the above story would infer as well.

But Tallon is the one to take the hit.  I have to believe that Tallon is going to find himself a prominent job somewhere.

Tango/16 - In the press conference, John McDonough said Tallon probably would not have been fired/re-assigned if not for the RFA issue. I think that’s probably an easy cover for the fact that McDonough just likes Bowman better, but he did say it to the media.

Also, Rick Dudley was the one who was always responsible for this issue. He left shortly before it had to be taken care of, so Tallon did it (incorrectly). At least that’s the public message being sent out.

JD: great, thanks for the info.