Not Enough Money To Go Around
Even with news breaking this afternoon of Ilya Kovalchuk’s new $60 million contract extension (potentially) with the New Jersey Devils, this 2010 free agency period has been one of the most uneventful and slow-developing offseasons in recent memory. The reason being? Despite a mediocre at best free agent group, there simply isn’t enough money to pay these guys what they’re probably worth. As one unnamed NHL General Manager put it last week: “The teams with cap don’t have cash and the teams with cash don’t have cap”. The Maple Leafs however, are fortunate enough to have both, and have the opportunity to exploit the market to their advantage.
Approximately sixteen months ago, NHL General Managers gathered in Naples, Florida for their annual March meeting. However, the 2009 meeting was unlike the ones in previous years. There was a sense of uneasiness and uncertainty around the league in regards to how the bleak economic picture would affect the professional sports market. During an interview with the FAN 590 at the time, Burke explained that the league had brought in several top financial experts to forecast what the economic landscape could look like in a few years time. One particular message stood out to the Toronto GM: Pay attention to baseball.
Since Major League Baseball is the first of the major sports to go through season ticket renewals and free agency, it would be able to provide a preview of how sports fans would react to the changing economic climate. The financial experts suggested that the other sports typically lag either one or two years behind baseball in terms of financial change, meaning that the 2009 or 2010 NHL free agency periods could emulate that of the 2009 MLB winter offseason.
Later during the interview, Burke would go on to mention that he was keeping a close eye on MLB free agency and pointed to the example of Bobby Abreu, a talented outfielder and multiple-time all star who had been completely priced out by the market. Coming off a productive season with the Yankees, many experts predicted he would easily procure a long-term contract with an eight figure annual salary. Approximately six weeks before the start of the season, he ended up signing a 1 year contract worth $5 million with the Los Angeles Angels. And he was the lucky one. During the rest of the 2009 and 2010 offseason, many quality everyday players found themselves out of a job or signing minor league (equivalent to an NHL two-way) contracts because teams were leaning towards homegrown players on minimum contracts.
Now here we are in July 2010 and I believe that same barren wasteland of a free agent market that plagued the MLB has now hit the NHL. Yes, we saw teams spend well over $200 million on Day 1, but what happens now? James Mirtle of the Globe and Mail explained that the current NHL market has maybe $190 million left to spend with about 140 NHL players still without contracts. Taking into account a conservative $110 million estimate for the top 50 or so restricted free agents, and you’re looking at $80 million left for about 90 players. That’s about $900k per player, and quality players at that.
Consider this: There are currently 80 UFA’s who played over half a season (41 games) last season still without contracts. That’s not including solid contributors who had long-term injuries such as Petr Sykora, Brad Lukowich, Pavol Demitra and Doug Weight among others. Look at Vaclav Prospal signing for $1 million coming off a 58 point season, Brett Clark signing for $1.3 million or Alex Tanguay for $1.7 million. These are players hedging the market and making sure they have an NHL job in September. Want to play hardball? Ask Dominic Moore how he did with the waiting game last year.
This is why I believe Burke and Nonis have been so hesitant to commit the rest of their cap space this early into the offseason. Even though it’s only $4 – 5 million (edit: before the Kulemin/Mitchell re-signings, now it’s closer to $2.5 million), the MLB picture showed us that cash is king. If that trend holds true, then we could very well see the bottom completely fall out of the market with quality players like Frolov, Sutton, Afinogenov, Ponikarovsky, and Torres scrambling to sign bargain basement deals on 1 year terms. Even without a Kaberle trade or Finger demotion, the Maple Leafs could find themselves in the envious position of adding potentially two impact players with that remaining money.
Why do you think rumors are floating around about Boston potentially taking a soft deal for Savard, or Philly asking Gagne to waive his no-trade clause? What’s New Jersey going to do now? Everybody’s trying to clear cap, but the problem is, so few teams can afford to take on any. Once again, refer to that quote from the unnamed GM above.
Burke clearly remembered the message that was delivered to him in Naples, and he’s been dropping hints of his expectations throughout this whole process. When reporters pushed him to answer whether he had been speaking to the agent for Kovalchuk or any other top six forward, he replied that he and Nonis were keeping tabs. He stated that while the team was out of the picture for now, they could potentially circle back and revisit several options “should the market completely fall out from under these guys”. It’s also why he traded a pick at the draft to acquire a serviceable bottom six forward at a near league minimum contract, because every last dollar is going to be extremely valuable.
Burke is one of the brightest individuals in the game today, and one whose understanding and knowledge stretches beyond just hockey. He’s been a player agent and he’s been the NHL’s vice-president so you know he’s got a close reading of the market pulse. It’s all about economics, and it’s a real poker game. The Maple Leafs are one of the few teams holding an ace right now, and you can bet they’re not going to overplay it anytime soon.