A Slippery Slope
When the NHL started drafting its new CBA, its biggest concern was keeping salaries at a tolerable level and maintaining a reasonable cap that would allow every team to keep their best players, despite market size. The level they set for the salary cap -- $39M last year, up to $44M this year -- is perfectly reasonable, and the clause that no player could get paid more than 20% of the salary cap was a smart way to ensure teams built their rosters with depth, instead of front-loading it with superstars. All seemed well, but lost in the shuffle was something that could betray all of the progress the NHL made revitalizing its economic structure -- arbitration.
When the NHL and the NHLPA were huddled together hammering out a new CBA, a few GMs complained that arbitration could put the league in the same trouble that caused the lockout in the first place. Instead of eliminating arbitration and working on another vehicle for young free agents to get paid, the league kept their system in tact, and it's already looking bad.
Only a small handful of the big arbitration cases have been decided thus far, but a dangerous trend is emerging. When a player enters arbitration he and the team present what they believe the player should be awarded. The arbitrator hears both cases and decides on a final amount. If the team isn't happy with the result -- they have 48 hours to make a decision -- they can let that player walk into free agency. Players, thus far, have been asking for far above fair value hoping to pull the arbitrator's decision up. It might be working.
Buffalo's Daniel Briere, a talented player who's far from elite, was awarded a $5M salary for the '06-'07 season. By comparison, Peter Forsberg (generally considered the best player in the world), makes $5.75M. Martin Brodeur, the best goalie in the game and someone who can eventually break all of Patrick Roy's records, made $5.2M last year.
What's troubling is that these arbitration figures will continue to rise each year, and it will get to the point where teams will be put in the awkward situation of having to let that player go unrestricted for no compensation. Each team has a player who's making near the max salary or something close to it. If they're cursed to have another player to elect arbitration, chances are they won't be able to keep that player if they want to field four competitive lines. This is the case in New Jersey, where Patrik Elias' $6M a year precludes them from signing Scott Gomez, who was just (as in, two hours ago) awarded $5M in arbitration. When players start being lost to unrestricted free agency, teams will be too tempted not to pick up these big names and will begin to sacrifice valuable and cheap role players to sign them. Slowly, things will degrade back to the state of the old NHL.
The best thing for the NHL to do is to eliminate arbitration completely and set up a system that puts another cap on the max a restricted free agent can make -- say, 10% of the cap. It would have helped avoid the potential for another financial problem in the NHL, a problem that seems to be hovering over the long-term success of the league, yet again.
Comments
I hear what you're saying re: 20% max of the cap value can go to any one player. Theoretically this should keep teams from front-loading on star power and distribute the wealth more evenly.
But this isn't necessarily happening everywhere.
Vancouver is probably the best example of a team that is carrying several stars or superstars (Luongo, Naslund, the Sedins, etc.). But by tieing up so much salary in so few players, they're left to fill out the roster with anyone from the Manitoba Moose that will play for the league minimum. Ditto Tampa Bay and, to a lesser degree, Ottawa.
The NHL is diverging into a league with two tiers of contract - the superstars making $4 million or more, and the glorified seat-fillers making the league minimum. Methinks this will cause a whole load of resentment in the coming years among the journeyman players (see also: Anson Carter) who are lost in the chasm between stars and pluggers.
Posted by: Stef | September 12, 2006 4:44 PM