You can file this one under "Stupid G.M. Tricks"! Kevin Lowe and The Edmonton Oilers signed Thomas Vanek of the Buffalo Sabres to a seven year $50m+ Restricted Free Agent Offer Sheet! Buffalo obviously matched the offer immediately. I've got so many issues with this signing I don't even know where to start! Let's narrow it down to a few items:
I. Vanek is an excellent young player but he's not worth the money:
Vanek was Buffalo's 1st selection (5th overall) in the 2003 NHL Entry Draft. In 2004-05 he scored 42 goals in 74 games for Rochester of the A.H.L. Definitely an impressive season for the then first year professional. In 2005-06 he made his NHL debut for Buffalo and scored 25 goals and 23 assists for 48 points in 81 games. He was, however, a -11 in his rookie NHL season. All in all, it was a very promising debut for the young forward listed at 6'2" and 208 pounds. In the playoffs that year he only dressed for 10 of Buffalo's games, scoring a whopping two goals (both on the power play) and going -1. Then came his breakout season, 2006-07, he scored 43 goals and 41 assists in 82 games for Buffalo. His +/- soared to a +47. In the playoffs he appeared in 16 games for the Sabres notching 6 goals and 4 assists for 10 points, while going +1. Not exactly overwhelming playoff numbers. Those are his credentials. 2 seasons, that's it! After years in the NHL compiling that lengthy resume (tongue firmly planted in my cheek!), Edmonton decides to pay the guy "Franchise Player" money. Don't get me wrong, I like Vanek as a player. Even though it's way too early to be sure, he definitely looks like the real deal. But after putting together 1 forty goal season and zero impressive playoff performances, what the heck was Edmonton thinking? What if the guy's numbers were inflated because he plays for the league's most offensively oriented club? He's not the go to guy in Buffalo, he hasn't been around long enough to prove that he can actually play that role, why would anyone pay him "go to guy" money when he hasn't been around long enough to prove he's worth it? He's not Sidney Crosby or Alex Ovechkin. I just don't get it. The next point is even worse:
II. The Oilers' predatory signing has upset the salary balance within the league:
I know I'm a Ranger fan, so don't laugh at this point! Even though conventional wisdom has it that the Rangers have driven salaries out of control over the years, that's simply doesn't paint the full picture. The Rangers have traditionally targeted Unrestricted Free Agents. The contracts they sign these players to do not count as comparables in salary arbitration. When a young player goes to arbitration to try to land a bigger contract he can't point to the Bobby Hoilk contract as a comp. Everyone knows that UFA contracts are inflated, it's supply and demand: only a few free agents with a lot of interested clubs. A contract signed by a Restricted Free Agent however, can be used as a comparable in salary arbitrations (and regular contract negotiations for that matter). What is Henrik Lundqvist worth now? How about Sean Avery (his numbers don't come close, but he brings very important intangibles to the team)? Zach Parise in Jersey? The list goes on and on.
The problem is compounded because of the salary cap. If the salaries of young players are not kept at reasonable levels, it will be impossible to dress a deep well balanced lineup. In today's NHL it's impossible to dress a lineup full of top shelf UFA's. They're too expensive. Teams must build with good young players still earning reasonable salaries and add the right mix of UFA talent. Anything else is too expensive and unworkable. If the young players (who do not yet have the leverage of UFA's) start getting paid UFA money, it will be impossible to dress a competitive well balanced team. Make no mistake, Kevin Lowe and the Edmonton Oilers have assaulted this balance.
III. Isn't it ironic?
The Oilers (or should we call them the Oiler$?!?) have been one of the small market franchises that have allegedly struggled to compete against the big boys. Their payroll was always low. They could never spend money on talent. They constantly traded away developing young players once those players commanded higher salaries. They couldn't even bridge the gap between themselves and Ryan Smyth leading to his tearful departure from Edmonton (so sad). Now all of a sudden, they've got some money to spend. The problem is that not only were they unable to spend it, they actually shot themselves in the foot trying. What will the Oiler$ do when one of their Restricted Free Agents takes them to arbitration and gets awarded a huge pay day with the Vanek contract cited as a comparable? They'll probably accept it. Why? Because maybe just maybe the lock out wasn't really about salaries and available funds, maybe just maybe it was really about increasing the values of each franchise. All that bickering about the big market clubs like the Rangers was possibly nothing more than posturing. It's even more ironic when you consider that Krazy Kevin Lowe a/k/a Kaptain Small Market Suffering Franchise, abandoned these same Oiler$ in order to sign for bigger bucks with the the Rangers. Then he bemoans the fact that current players do the same thing. THEN, he goes and attacks the balance of salaries in the NHL ENABLING players to do the same thing. It's enough to make your head spin.
IV. Never act out of desperation:
I've said it once and I'll say it many more times, sports is a microcosm of life. Just like in life, desperation moves rarely if ever pay, so too in sports. As a transactional lawyer I do a lot of negotiating and "deal making". I've seen people make desperate moves far too often. Those moves almost always come back to bite you in the behind. The bottom line here is that the Oiler$ probably acted out of desperation. They were willing to spend money (surprise, surprise!) and they still came up empty. For some reason, people don't want to play in Alberta. Go figure. To make matters worse this is only one year after Chris Pronger left town after a trip to the finals. The guy didn't even want to stay on a successful Edmonton club! To make matters even worse, Krazy Kevin thought he landed Nylander only to find out that he was left at the alter once Washington stepped in. I even read a report (although I can't remember where and, therefore, can't verify the authenticity) that Nylander signed with the Caps for less than the Oiler$ were going to pay him. Ouch! So Krazy Kevin goes and sticks it to the hockey world by signing the battle tested superstar Thomas Vanek to a $50m contract. I can't imagine that this move will be popular with the rest of the teams in the league. Even Philly didn't pull a stunt of this magnitude! Will Krazy Kevin suffer the ramifications of this move when the Oiler$ finally cut him loose? Will owners hold this move against him the next time he's interviewing for a job? Neil Smith is still looking for work as an NHL G.M. after being branded a salary inflating predator. What goes around often comes around. Stay tuned!
Wow. I didn't even know this occured. Money aside, I can understand why Lowe wanted to make this move. This guy is an unquestionable star- and young one at that. Really, really young. I know I've been knocking the Europeans & their style of play, but Vanek is an exception. This only make you wonder what exactly happened with Ryan Smyth. Seems to me that maybe he never wanted to stay in Edmonton after all....
Posted by: MOSS | July 09, 2007 at 11:29 AM
Good grief, is the salary cap so incredibly difficult to understand?
There is a fixed pool of money, and more or less, a fixed pool of players. The same dollars will be spent on the same players, with the main difference being that productivity will tend to be rewarded earlier in an elite prospect's career: RFA expenditure increases by exactly as much as UFA expenditure decreases. Yes, it's a cap: every increase in one area is balanced out by a decrease somewhere else. No more MSG slush-fund. Every dollar is an existing dollar, no matter whose xmas tree it winds up decorating.
From the GM perspective, this shift places a premium on being able to spot the RFAs who are worth the risk vs the RFAs who appear to have the numbers but won't pan out. A GM who refuses to take risks has little chance of winning a cup against the GMs who choose to take these risks and succeed.
This is the real reason that most GMs hate the offer sheet: it runs the risk of exposing them as the risk-averse sissies they really are.
The player who will win under the new rules is the hot prospect who formerly over-produced relative to his pre-UFA compensation, and then suffers an injury or decline before entering his lucrative UFA years. The player who loses is the career second-liner who makes it to his UFA years in good health, then gets handsomely overpaid (relative to his future production) by a GM trying to plug a dire hole in a market with not enough quality UFA players available.
The pre-CBA notion of comparables in arbitration has passed its expiry date. Teams often pay players a premium because of situational factors, such as the Oilers who were snubbed in the UFA market, after waving around more money than most of their competitors. It amounts to players arguing that they deserve Oiler-comparable compensation without having to move their wives there. Isn't that the definition of a floater? Wants to put up the numbers, but won't skate to the hard areas. If the arbitrators employed by the NHL are too stupid to figure this out, that's entirely distinct problem. Eventually Gary fix-it-after-it-breaks Bettman will have to address this.
In a few cases, a promising RFA will make a boat load of money and never produce to that level. Some of this money will come from deflation of overpriced contracts in the UFA market. In a few cases, an NHL caliber player will leave the NHL market when no team has enough money left to sign him at what he perceives as his fair value; some of those guys will go off to Europian leagues.
The best prospects will tend to be brought up at a slightly younger age than before, with less grooming in the feeder leagues. Sam Gagner is less likely to be poached by an offer sheet playing his first pro year at age 18 than if they had delayed his first pro year to 19.
In practice, hockey-wife destination teams like the Rangers will be able to select from proven talent, while Siberian teams such as the Oilers will need a GM with more mustard to succeed.
The other thing I just can't grasp is how the Oiler's offer for Vanek could be overpriced, while at the same time it is automatic for Buffalo to match. Which is it, people? It can't be both.
Finally, and this needs to be said, Burke is an idiot. His suggestion that GMs refrain from using a contractual mechanism in the CBA smacks of collusion. Major sports leagues already operate in the grey area concerning anti-trust legislation. It's hardly a wise move to air collusive sentiments in public, and I'm sure he's been tuned in behind the scenes by the NHL head office. It would be so much better if this wrist slapping had been more public, but the NHL doesn't wish to draw attention to how
they are operating just one or two missteps from triggering antitrust scrutiny. Burke is a Harvard Law alumni and he's a smart hockey operator, but his bluster reeks of contempt towards those who lack the legal background to call his bluff.
Posted by: Budly Brewster | November 09, 2007 at 04:12 PM