The Real Problem: Front-Loaded Contracts

New York Islander Fan Central | 1/30/2009 02:05:00 PM | | | |
National Post: Bruce Arthur in his article on Henrik Zetterberg signing his 12-year, $73-million deal questions if the league should put term limits on contracts with heavy criticism for the past signings of Alexei Yashin and Rick DiPietro but praise for Wings gm Ken Holland?

The Star: Damien Cox praised Detroit's signing of Zetterberg long-term because of an outstanding track record compared to what he writes are the " wacky Lightning " (Lecavalier) or what he says are the " eccentric Islanders " (Alexei Yashin/DiPietro) as apples to oranges citing the Wings are just a little bit smarter than everyone else winning four Stanley Cups in eleven years.

NYI Fan Central Comments:

A few articles like this surfaced where DiPietro is being kicked around despite being an all-star last season while he is injured but we all know a big part of this is who the owner and gm behind the signing.

This is the same Ken Holland who was a big reason for the NHL injury policy according to Tsn last year here that has caused a lot of complaining but in sports you are as smart (or foolish) as your record.

Ken Holland had a lot of pre-cap years where owner Mike Illitch spent through the roof, that was a big part of the Wings success which led to those cups which I guess Mr Cox and others just did not bother with.

I have no problem with the Zetterberg signing in terms of money/years, the Wings take the risk and it's more than a fair question to ask if there should be limits on these kind of deals which are becoming much more common.

Ted Leonsis handed Jagr that huge contract then he had to pay about half of it for years when he was traded and now Ovechkin received an even longer deal with virtually no criticism because to lock him up sooner means no competition for his services later.

My issue and this blog entry asks about what few write about, front-loaded contracts.

The public does not talk about this because it's usually buried in the hype of someone signing.

Greg Logan was so busy telling us Gomez and Drury turned down the Islanders for team Cablevision tradition a few summers ago he forgot to report part of those deals were frontloaded after he got the Islander fans stirred up with Garth Snow making it easy talking about the building.

Daniel Briere also got a huge front-loaded contract here when he signed with Philadelphia that summer.

Signing a front-loaded contract means the cap hit is still the same but it makes a player much easier to trade later in the contract after the bulk of the money has already been paid out.

For the players getting the bulk of the money in the early years of the contract means they lose far less in a possible buyout later.

Fact of the matter is there are a lot of corporate teams in this league that may have to deal with a salary cap for the first time but still have a huge advantage by offering a front-loaded contract.

Corporate teams have no problems losing money which is how we got to a lockout with the market driven so high everyone had to spend more while teams like the Rangers and Wings took big financial losses to ice their 70-80m dollar lineups.

Depending on what I read Ranger losses per year were between 25-40m a year because of the huge payroll/overhead in an outdated building like Msg. Detroit for years used to talk about needing to make the finals to break even financially and Joe Lewis Arena is an outdated building in the mold of the former Devils home.

Charles Wang pre lockout as owner of a lower payroll club had some very tough choices to make. Sign Yashin long-term or risk losing him in a few years to another teams big contract offer. If he scored forty goals a year there was a good chance a corporate team would have made an offer the Islanders could not match and lost him for nothing.

Yashin's contract did one other thing few write about. It put players/agents in a spot where they wanted their money upfront because of buyouts/lockouts. Sing no sad songs for Yashin but he lost about a good thirty plus million with the lockout givebacks, a year salary loss and his buyout.

You don't think ownership in Minnesota (Gaborik) or Atlanta (Kovalchuk) face the same reality because they went shorter term with their contracts? Their agents know someone will pay them big upfront in the UFA market.

Rick DiPietro took a trade off (less money vs more years) but that deal benefited the Islanders (despite criticism) because if he did hit UFA and kept progressing another club would have made a huge offer which likely would have been front-loaded which Charles Wang most likely could not have been able to match.

This is why Roberto Luongo had to be traded from the Panthers, they could not or would not give that commitment and/or Luongo's side wanted out.

For those wondering Kevin Allen in USA Today here reports the Wings front-loaded the Zetterberg deal, paying close to $68 million the first nine years, with a maximum salary of $7.75 million. His final salaries are $3.35 million, $1 million and $1 million.

Very easy to buyout or trade. A club struggling to reach a cap floor (whatever the cba is in the future) can take the cap hit and pay the one million.

These front-loaded contracts are what no one is writing about and the real problem the league/NHLPA needs to address in the next CBA.

Another reason Ryan Smyth signed with Colorado was because a big part of his thirty one million dollar contract was frontloaded here while we have no idea if Charles Wang offered a front-loaded deal.

As for Detroit gm Ken Holland like most general managers he talks out of both sides of his mouth depending on the year and the circumstances here where a few years ago he had a far different take on front-loaded contracts.

He needed a front-loaded deal to keep his own player? So much for the attraction of Detroit.

Bottom line this needs to be written, discussed a lot more and the big part of these signings, not a sidebar.

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