NHL CBA News and Views – July 11, 2012.

The recent NHL free agent signings, especially those by the Minnesota Wild, have generated critical responses, but what impact – if any – could it have upon the current NHL CBA negotiations? Read on for the views of several hockey pundits, as well as my own.

The Minnesota Wild’s signings of UFAs Zach Parise and Ryan Suter last week to heavily front-loaded, identical 13-year, $98 million contracts didn’t sit well with some NHL pundits.

Lynn Zinser of the New York Times believes these sort of deals are risky, citing as an example the Vancouver Canucks’ current difficulty in moving goalie Roberto Luongo only two years after inking him to a 12-year contract.

Zinser noted the league’s apparent “mini-fit” over Ilya Kovalchuk’s 17-year deal with the New Jersey Devils two years ago suggested it was attempting to curb these kind of deals, but has done nothing since.

That deal, however, was obscenely long, beyond the point where Kovalchuk could reasonably be expected to remain an active NHL player, plus it it was  ridiculously front-loaded.

If anything, the Kovalchuk ruling two years ago help set up mutually agreed-upon boundaries by the league and the PA regarding term and distribution of the salary. So far, it appears no club has violated those terms.

Bucky Gleason of The Buffalo News believes long-term, front-loaded contracts constitutes salary cap circumvention, calling for their elimination in the next CBA.

Those contracts (of which a significant portion is paid out as a “signing bonus”) certainly are cap circumvention, but since there’s nothing in the current CBA which specifically prevents them, it’s completely legal, provided you don’t try to push the boundaries the way the Devils did two years ago with the Kovalchuk contract.

Yep, it’s a loophole, one big enough to drive a truck through, which I foresaw back in 2005 when this CBA was implemented, but one which apparently the big brains among the league’s CBA negotiating committee either blindly overlooked, or naively assumed wouldn’t be an issue.

It’s expected there will be a push afoot by some team owners and influential general managers (hello there, Brian Burke) to impose term limits on players contract.

Yahoo! Sports’ “Puck Daddy” Greg Wyshynski believes the league might “talk tough” on long-term deals, but deep down, every team owner wants its “Minnesota moment”:

“If you’re going to have a salary cap that doesn’t allow for teams to exceed it with reasonable penalties — say, like, a luxury tax — then the 10-plus years and frontloading of deals should, and I think will, continue.” 

CBC’s Elliotte Friedman feels scrapping long-term, front-loaded contracts are a bad idea, making it difficult for teams to retain their cornerstone players, possibly resulting in shorter contracts with more expensive cap hits.

He also doesn’t see how banishing such contracts would help the plight of struggling clubs or those which hate the current deals.

Banishing such deals won’t improve struggling clubs, but if you’re talking about abolishing legalised cap circumvention by closing off this loophole, it would create further parity among teams, since it would become tougher for dominant clubs (those with smart management who know how to build an maintain a winner) to comfortably afford to retain most of their best talent, thus giving the lesser lights a better chance at signing them.

Remember, parity was supposed to be one of the intentions of the current collective bargaining agreement, or at least, that’s how it was sold to NHL fans.

Of course, the problem with that is it makes it more difficult for teams to maintain competitive franchises, especially championship contenders, and it has been argued it punishes successful franchises,  but if the interest here is true parity, then such long-term deals must be eliminated.

Whether that happens, of course, remains to be seen, and it could be a potentially divisive issue among the owners, which might work to the NHLPA’s advantage if they wish to maintain the status quo on contract lengths.

 

ESPN.com’s Scott Burnside believes this summer’s list of expensive free agent signings punches a hole into any attempt by the league to plead poverty this time around in CBA negotiations with the NHLPA, coming in the wake of reported record high revenues last season and league talk of a bright future.

Burnside’s right, of course, but that won’t stop the league from trying, because despite the record revenues, increased revenues streams and the bright future, there are several clubs in genuine financial distress.

How to address that problem will be the main factor in the CBA talks. The league is expected to push for a further reduction in the players’ revenue share, while the PA will likely push for an enchanced system of revenue sharing.

 

Tony Gallagher of The Vancouver Province singled out the Carolina Hurricanes, a club which has been a regular recipient of revenue-sharing funds, pursuing big ticket UFAs like Parise this summer, suggesting such a club shouldn’t be able to do such a thing with other team’s money.

He believes this could make calling for increased revenue sharing a difficult sell for the league’s wealthier owners.

That, however, is what increased revenue-sharing is in part supposed to do: give poorer teams enough cash to at least bid competitively for the best free agent talent, as well as retain their best players, and perhaps pursue others via trade.

The idea being, if they can build into competitive franchises, their revenue will increase, to the point where they can either accept a reduced share, or become self-sufficient.

Expecting the Hurricanes to just bid for the remaining scraps via free agency isn’t a productive use of the dollars they receive from revenue-sharing. Indeed, if they fail to improve, they’ll remain a moribund also-ran begging for hand-outs from their wealthier peers.

Of course, if a poorer franchise is in that state because it is badly run, no amount of dollars thrown at it will improve it. Sure, you can stipulate that money can only go toward player salaries, but if that team’s ownership and management opts to waste money on inferior talent, there won’t be a significant improvement in its on-ice fortunes, and in its coffers.

For well-run franchises trying to build into contention, revenue-sharing is a great idea. For the dregs, its good money thrown after bad.

And that, I expect, will be the argument against an improved system of revenue-sharing by the wealthier team owners.

 

As for the hypocrisy of Minnesota Wild owner Craig Leipold signing Parise and Suter to such expensive contracts only four months after pleading poverty and calling for the current system to be changed, “Puck Daddy” Greg Wyshynski does a nice job destroying Leipold’s attempted spin job.

This is just more “save us from ourselves!” nonsense from the owners, who will always — ALWAYS — find a way around their own rules, standards and proclamations in order to win a championship. 

Conditions change. Opinions change. The Wild were doomed by player salaries, and then spend $196 million on two players, and Leipold’s right: It could mean a better financial picture in the long term.

But what isn’t cool is complaining about player salaries, dabbling in the dark arts of long-term contracts that probably won’t exist under the next CBA, and then calling the same system deficient. If it is, it’s by the owners’ own hands.” 

I couldn’t have written it better.

Leipold is free to spend his money however he wishes, and inking the two best available players in this summer’s UFA market was a significant coup on the part of his team. Hopefully for he and his team, Parise and Suter will be worth the expensive investment.

Whining about the system he and the other team owners created, approved of, and exploited, is another matter.