Capital Money Makes NHL History

Alex Ovechkin

It’s the continuation of a common trend and the beginning of a failure.

The trend being long multi-year contracts spanning over 10 years and the failure being Gary Bettman’s aim to prevent such contracts.

Much like many other things Bettman has set his ignorant fingers upon, the NHL salary cap is crumpling right before his eyes. How so?  

Alexander Ovechkin and the Washington Capitals agreed today to a 13-year deal worth $124 million, hence signing the biggest contract in NHL history. Ovechkin, who negotiated the contract himself, will be paid $9 million per year for the first six years, and $10 million per for the next seven.

“I’m a risk-taker,” Capitals owner Ted Leonsis said. “And if you’re going to make a long-term investment, who else would you do it with?”

I totally agree with his point of view, but is Leonsis – who is probably one of the fan-friendliest owners in NHL history – going overboard with this contract? Of course locking up Ovechkin is a given, but how does signing a player worth one-fifth of your team’s salary help the other areas of the squad?

The whole purpose of the salary cap was to allow an even field for every team to compete, but owners and general managers have found ways to challenge the restrictions by committing to lengthy contracts. They are banking on the fact that although, the player might be overpaid now, they might be worth it and even “underpaid” ten years from now.

As seen with the recent signings of players like Rick DiPietro and Mike Richards, years are starting to pile up, along with the price. Teams are only going to follow in the footsteps of these major deals and the result is the raising of salaries, which just might pressure the NHL in raising the cap.

A big mistake this off season by the NHL was to up the salary cap ceiling to $50 million, from the previous $44 million right away, as opposed to doing it over the years. The sudden surge sparked richer contracts that reflected pre-lockout days. It defeats the purpose.

Having Ovechkin on Washington is great for the franchise, but a team is never a one-man show. The Capitals can’t afford to provide support for AO with $40 million left to sign 21 other players. Unless they hope to get some steals in the free agent market, there is no way that Ovechkin is the only answer.

Hopefully, Ovechkin enjoys not playing in the playoffs, or even fighting for a spot come January, every season. 

Also, this contract starts a debate of whether or not Ovechkin is worth more then Sidney Crosby. But that’s a whole other article in itself.

Gary Bettman

Bettman, who obviously is not well liked by this writer, did not well think out the long term strategy of the league. Many will ask now, what’s the harm of signing Ovechkin to 13 years? But it’s not just Ovechkin and the Capitals. It’s the whole trend and process. Guys like Ryan Smyth, who signed a five year $31.2 million contract, is not going to be worth $6-million four years from now.

If Mike Richards flops, then the Flyers are stuck paying him around $6 million for another 12 years.

Bettman is making more money for himself, or the league so he claims, with the salary cap but he does not care about the overall health of these contracts or the NHL. I highly doubt the cap level will be rising every year, and with the audience interest lowering, the possibility of lowering the limit is very likely. Then what? Teams can’t just rework contracts. 

When the NHL starts losing money again, it’s teams with these long term deals that will get screwed.   

What that means is that we’re going to start seeing players aim for long-term deals now, and it’s a crapshoot whether they’ll live up to their amount a decade from now. The money that the owners are willing to dish out is even more amazing then that five years ago. So basically, we were prevented from watching hockey for a season only to repeat the reason as to why the league shut down?

Contracts are at all time highs now, and it’s going to keep rising. Unless of course, the NHL does something about it, but we all know what happens when responsibility is placed upon the governing body. 

All in all, don’t be surprised to hear that the Maple Leafs lock up Wade Belak for another eleven years, maybe then he’ll be able to get his next goal.

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3 Responses

  1. Except pretty much everyone is agreed that the real reason for the salary cap wasn’t in order to bring about parity in contracts, or to save money, but rather to serve as a puppet motion while pushing ages downwards was the real trick. The more circulation of youth via lower free agency ages and the ability to snatch away restricted free agents makes for a lot bigger an issue than a salary cap that fluctuates based on earnings. Some conspiracy theorists even suggest that it was done to bring about success in US major markets, since it allows a lot of teams like the Rangers to spend through the roof on actual talent, instead of 35-year old players — the only ones that were available in the old NHL.

    The truth is, the salary cap adjusts based on league earnings, but inevitably it’s going to raise as long as teams report they are content with it. It has little or nothing to do with “saving” anything.

  2. Great write-up. Bettman and the NHL represent the way things are done in America these days… with short-sightedness… anything that will get the people at the top rich NOW. They don’t think ahead and as shown by the auto industry, and many other industries these days, this lack of foresight is driving the American economy into the ground.

    Bettman’s gotta go!

    http://www.FireBettman.com

  3. Nebcanucks, but in doing so, it ruins or diminishes the purpose of restrictions. Owners are finding loopholes and ways around these contracts, which might result in more mistakes. Like you said, a focus is on signing younger players and lowering the age, but when the need to do so is so important, GMs are going to throw money at the wrong people. Maybe Ovechkin is a worthy candidate to be offered a lot of money due to his potential, but when we see guys like Penner having cash thrown at them, it reverts us back to the pre-lockout era.

    Already there is talk about the NHL negotiating a limit on contract lengths come next collective agreement, because they are starting to realize that it is not the smartest idea in the long run. Of course teams are going to be content with it because they want raise in the salary cap, so they have more money to spend on free agents and such, with no care in the world to the overall health of the NHL. Teams, who aren’t so money smart, are going to be suckered into spending to the limit, in order to acquire the best “assests” on the ice for their team. And that sets the bar for other players who think they deserve that type of money, and then contract rises, and the length gets longer, and we have the same scenario as those Shanahan and Sakic contract offers a decade or so ago.

    Hosea C

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