The Absurdity of Zetterberg's contract.

By now you have heard that that Henrik Zetterberg has signed a 12 year $72 Million deal. It's essentially a 7 year $70M deal with the last two seasons at $1M a season in order to keep the cap hit at $6M instead of $7M. First let me say congrats to Ken Holland who remains the best GM in the league and this creative deal shows why. Many other teams had the opportunity to sign their players to creative deals like this, but no one had the creativity to do it. This post is no way a criticism of Holland or his creativity.

Let's be real for a second. This deal is set up to circumvent the salary cap rules. Especially since If Zetterberg retires in 10 years (when he's 38) the last two seasons get wiped from the books and Les Ailes won't have a cap hit. Zetterberg's cap hit should be $7M because there's everyone is pretty certain that the probability of him playing out the two $1M dollar seasons is extremly small, and if he retires Les Ailes don't have to take the cap hit for any season afterwards. This makes which makes the contract at the very best disingenious. Les Ailes found a way to cheat the system, and the NHL needs to do something to close this loophole before teams start really exploiting the deal.

Had Francois Giguere thought of this first he would have signed Joe Sakic last year to a 30year $44M dollar deal. The first two seasons at $6M the third season at $4M , the 4th at $2M and the last 26 at $1M apiece. That would make Joe Sakic's cap hit a miniscule $1.5M/season. But everyone knows that at the very latest Joe Sakic will only play 2 more season's this and next. He would retire after next season and the Avs would have had 2 seasons of a $6M/year player with only a $1.5M cap hit and no long-term reprecussions. Obviously this situation is preposterous, but plausible.

Listen the Zetterberg loophole violates the spirit of the Salary Cap that the owners fought so hard to put in place. The NHL needs to close it before something absurd, like the hypothetical Sakic contract described above, happens. A quick solution would be:

• The lowest annual salary a player can have can be no lower than 1/2 the value of the highest annual salary. (i.e. a player who makes at most $7M a season cannot be paid less than $3.5M).

• Limit contracts to a maximum length of 8 years.

A quick easy solution to close the Zetterberg Loophole.

8 comments:

  1. As long as it happens AFTER today, that's fine with me.

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  2. Or just apply each year's actual salary to the cap and stop using the average annual salary over the life of the contract.

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  3. Per a post by doc at MHH, it wouldn't have worked for Super Joe unless the team wanted to be saddled with a cap hit for nothing forever. They did close the loophole for older players:

    "When a player aged 35 or older signs a multi-year contract, his average salary is counted against the team's salary cap during every year of the contract, even if the player retires before the contract is up."

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  4. Your right Bob, I forgot about that portion of it.

    Still The Avs could have done it with Ryan Smyth.

    @Loser Chris, I'm not sure that's the best solution, only because some teams may want to pay a player more up front (i.e. they have cash reserves now) and don't want to take the chance of trying to come up with cash reserves later down the line when stuff can happen... like economy tanking etc.

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  5. But paying a player more up front would eat up more cap space that year. Front-loading a deal could be a good way for GMs to manage their cap growth and also allow certain teams to reach the salary floor without having to overpay players over the life of a contract.

    Front loading a contract could also give teams more options (trade, etc.) in the later years of a big contract which would help reduce some of the long term risk involved.

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  6. I don't agree with limiting contract lengths - not with the younger age for free agency and the salary cap.

    Maybe make it so every team is allowed one contract longer than 8 years? Locking up the franchise players is essential for all hockey teams, in my opinion.

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  7. 1) The report that he's going to get 7 million for the first 10 years followed by 1 mil for the final 2 have to be incorrect.
    2) Under the rules of the CBA a player can't receive less than 1/2 the salary he received the previous season in a multi year contract.
    3) In other words if Zetterberg gets 7 million one season the LEAST he can be paid the next in the deal is 3.5, then minimally 1.75 the following season, etc.

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  8. @Faux:

    there's a report that there's a $3.5M year in there to to make it work.

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