FanPost

Comparing Mega-Contracts in the Cap Era

Rumors out of the NY Post are running wild that the Devils have offered a 17-year, $100+ million contract to Ilya Kovalchuk, structured to pay him nearly all of the money in the first 10 years.  I for one, am skeptical of the dollar figure posed rumored, but it's certainly not out of the question for the Devils to offer him a contract that Kovalchuk has no intention of paying out.  GMs in recent years have exploited the CBA loophole whereby players who sign their contract before age 35 do not count against the cap if they retire before their contract expires.  Here's a look at all of the contracts of term 7 yrs or longer with salary this year of greater than $6 million.  "Signed Age" is the age at which the contract was agreed to, not their age during the first season it goes into effect.  "End Age" is the age they will be on July 1st of the year that the contract expires.  There may be some discrepancy between signed age, end age, and the length of the contract based on the timing of the signing (potentially up to one year before contract takes effect) and the particular birth date of the player.

Name Year Signed Signed Age End Age Cap Hit Length Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 12 Yr 13
Alexander Ovechkin 2008 22 35 9.538 13 9.0 9.0 9.0 9.0 9.0 9.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0
Duncan Keith 2009 26 39 5.538 13 8.0 8.0 8.0 7.65 7.6 7.5 6.0 5.0 4.5 3.5 2.65 2.1 1.5
Roberto Luongo 2009 30 43 5.333 12 10.0 6.716 6.714 6.714 6.714 6.714 6.714 6.714 3.382 1.618 1.0 1.0
Marian Hossa 2009 30 42 5.275 12 7.9 7.9 7.9 7.9 7.9 7.9 7.9 4.0 1.0 1.0 1.0 1.0
Henrik Zetterberg 2009 28 40 6.083 12 7.4 7.75 7.75 7.75 7.5 7.5 7.5 7.5 7.0 3.35 1.0 1.0
Vincent Lecavalier 2008 28 40 7.727 11 10.0 10.0 10.0 10.0 10.0 10.0 10.0 8.5 4.0 1.5 1.0
Rick Nash 2009 25 34 7.800 8 7.5 7.5 7.6 7.8 7.9 7.9 8.0 8.2
Brian Campbell 2008 29 37 7.143 8 7.143 7.143 7.143 7.143 7.143 7.143 7.143 7.143
Daniel Briere 2007 29 37 6.500 8 10.0 8.0 8.0 7.0 7.0 7.0 3.0 2.0
Jason Spezza 2007 24 32 7.000 7 8.0 8.0 8.0 8.0 8.0 5.0 4.0
Scott Gomez 2007 27 34 7.357 7 10.0 8.0 8.0 8.0 7.5 5.5 4.5
Chris Pronger 2009 34 42 4.921 7 7.6 7.6 7.2 7.0 4.0 .525 .525
Eric Staal 2008 23 31 8.250 7 6.0 7.5 7.75 8.5 9.25 9.25 9.5
Marc Savard 2009 32 39 4.007 7 7.0 7.0 6.5 5.0 1.5 .525 .525
Pavel Datsyuk 2007 28 35 6.700 7 6.7 6.7 6.7 6.7 6.7 6.7 6.7
Thomas Vanek 2007 23 30 7.143 7 10.0 8.0 6.4 6.4 6.4 6.4 6.4

Looking at the ages of the players when they signed their contracts and when they expire, there are a clearly a few different flavors of mega-contract.

(1) Long-deal-for-young-star that expires by age 35.  These deals are typically minimally front-loaded and carry a heavy cap hit, but are based on the expectation of not only continuation of past performance but of potential to improve future performance as well.  Ovechkin, Nash, Spezza, Staal, and Vanek fall into this category.

(2) Long-deal-for-player-entering prime that expires by age 35.  These deals may or may not be front-loaded and are paid with the expectation that the player will continue to produce at the level they have just before they signed.  The players in this category are Gomez and Datsyuk.  These deals also carry a heavy cap hit.  Gomez was an unrestricted free agent, Datsyuk did not hit the market.

(3) Lifetime-deal-for-player-in-or-entering-prime that expires at age 39 or above.  These deals are heavily front-loaded to reduce the cap hit.  Keith, Luongo, Hossa, Zetterberg, Lecavalier, and Savard fall into this category.  After Lecavalier's 7.7 cap hit, the next-highest cap hit is Zetterberg's paltry 6.1.

(4) Awkward-long-deal-for-player-in-prime-that-might-not-take-them-to-retirement.  These deals are for players in their prime, and take the player past age 35, but awkwardly end at a time when they might retire, or they might not.  There are two examples of this - Campbell and Briere.  These deals carry a heavy cap hit - Campbell's is not front-loaded, but Briere's is, though if Philly had just gone a few years more to make it a true lifetime deal, they would have been able to get away with a much lower cap hit.  Notably, both of these players were signed away from other teams in unrestricted free agency.

(5) Long-deal-for-old-guy.  This is Chris Pronger.  He was arguably past his prime at age 34 when he signed his contract.  The contract takes him to age 42 when it expires.  Interestingly, he is listed as "35+" on CapGeek - the contract he signed last summer was an extension signed one year early - he will be 35 when the regular season opens on the first year of his contract.

 

The best values right now in these categories are the guys in category (3), who have taken a lifetime deal with a few extra cheap years that reduce their cap hit.  Time will tell whether teams were smart to offer these deals.  Time will also tell whether the players retire before the expiration of their contract or not, having already collected most of the money they wanted in the front-loaded deal.  Most of them have a precipitous drop in salary around age 37.

Kovalchuk is entering his prime.  The numbers that have been bandied about either fall into category (2) (7 yrs, $60 million would take him to age 34) or category (3) (17 yrs, $100 million would take him to age 44!).  The alternative would be to put him in category (4), somewhere between 7 and 12 yrs, but the examples taken from that category are terrible contracts.  They carry long-term risk as well as a heavy cap hit.  Either up to 7 years or jump all the way to 12+ years may well be the only viable options for a Kovalchukian long-term deal.

What do you think about these mega-contracts?  Is there a pattern to "good" mega-contracts and "bad" mega-contracts?  If you want Kovy, which category would your preferred deal fall into?

All FanPosts and FanShots are the respective work of the author and not representative of the writers or other users of In Lou We Trust.

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