Front-Loaded Contracts: Are They the Cause of the Next NHL Lockout?
With the announcement of Christian Ehrhoff's new contract with the Buffalo Sabres earlier today, it has become abundantly clear that the National Hockey League and its owners are going to be in for a fight with the Players' Association at the end of the current Collective Bargaining Agreement.
Maintaining Ehrhoff as an example, his $40 million spread over 10 years indicates that enough money in the system can indeed ruin a sport. Is Christian Ehrhoff worth $10 million next year? Not in your life. In fact, you'd have a hard time convincing Terry Pegula that a defenseman who can give thanks for his offensive production to the Canucks' system and has more defensive holes in his game than most, is worth $10 million.
These contracts are simply ruining the National Hockey League. The owners are going to find themselves in a huge mess when they realize what is happening with these contracts. You pay a guy like Christian Ehrhoff $10 million, what does that make Shea Weber worth? You can bet that his agent will bring that up at his team arbitration hearing.
This whole situation could end up backfiring in so many ways. All of a sudden you will have teams that need to get to the salary cap floor, because the salary cap keeps going up due to "increasing revenues," but can't because their owners don't have the financial muscles necessary to sign mid-tier free agents to ridiculously stupid contracts.
The increasing revenues that are causing the salary cap to sky rocket are an incredible lie. Look at teams like Phoenix, Florida and the now-extinct Atlanta Thrashers, and try to convince yourself that the financial state of the game is in good hands right now. Something needs to be done to level out this playing field.
When the salary cap was brought in after the lockout in 2005, it was a modest $39 million (note the word modest). Since then, it has risen to levels that would have been deemed unthinkable only six short years ago. This upcoming season, the cap will be sitting at approximately $63 million. A top player can earn approximately $11 million of that salary cap.
Back in 2005, the owners had the chance to take a deal with the players that included a hard cap that was going to be set at roughly $47 million for the entirety of the Collective Bargaining Agreement. They say hindsight is 20/20 and, in this case, that certainly holds true. Clearly few owners believed that league revenues generated by the power-house teams would sky-rocket the way they have to create a cap floor that is more than the original cap ceiling.
The general problem with the system right now is that small-market teams are still small-market teams. At the end of the day, the NHL and its players have to find a way to incorporate all teams into a fair salary cap structure.
A soft-cap, like many feel the players will chase in the new CBA, is not the answer. It all but eliminates smaller market teams from contention as it has done in baseball. The New York Yankees have no problem paying the overhead taxes involved as their revenues trump most, if not all, other franchises.
Consider the following: The National Hockey League should propose that whatever salary a player is making in a certain year, is the number that is counted against the cap. This system would all but eliminate the currently despised front-loaded contracts. Teams would once again have to be more careful about where they place their money. It's a system that, in all likelihood, the players would shoot down in an instant. However, it is better than the system we have right now that will all but lead us to another lockout situation.
With a lockout looming, the players and the league need to get together and solve their issues. If we think the game is in trouble now, imagine another year without it.
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