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Why NHL "Lifetime" Contracts Are a Terrible Idea

Nicholas Goss@@NicholasGoss35Correspondent IAugust 22, 2012

Rick DiPietro of the New York Islanders
Rick DiPietro of the New York IslandersBruce Bennett/Getty Images

Term limits for NHL contracts definitely need to be changed during the current round of labor negotiations.

One part of the owners' initial collective bargaining agreement (CBA) was limiting the length of contracts to five years. While this may sound odd since many of these same owners are the ones giving out these 10-plus year contracts, it makes perfect sense.

Signing a veteran or even a young player for the rest of his career is rarely a good idea. Let's look at some lengthy contracts in the NHL that exemplify why lifetime deals are a bad idea.

Player Team Age Contract Length Total Worth of Contract Notes
Ilya Kovalchuk NJD 29 15 $100 million Large contract carries a cap hit of about $6.67 million for the next 13 years.
Rick DiPietro NYI 30 15 $67.5 million Has played in just 172 games since signing huge contract prior to 2006-07 season.
Henrik Zetterberg DET 32 12 $73 million Played in every game during 2011-12 season, but had lowest points total since 2006-07. His contract won't expire until he's over 40 years old.
Roberto Luongo VAN 33 12 $64 million He will be 43 when contract expires. The deal has a $5.33 million cap hit for another decade.
Marian Hossa CHI 32 12 $63.3 million Will be over 40 years old when deal expires. He is recovering from a concussion suffered in 2012 playoffs.
Johan Franzen DET 32 11 $43.5 million He is signed for eight more years and has never scored 60-plus points in a season.
Christian Ehrhoff BUF 30 10 $40 million He had a disappointing 2011-12 season and has nine years left on his current deal.
Ilya Bryzgalov PHI 32 9 $51 million He really struggled in first year in Philly. Currently one of the worst contracts in the sport.

I could have added a few more, but these players listed above all have contracts that will likely be the last of their careers.

While only a few of the players signed to lifetime contracts are worth the large salary cap hit at the beginning of the deal, none are worth it at the end. No player 38 years old and above should have a salary cap hit of $5 million-plus.

These teams are not thinking about the long-term consequences of these deals, probably because the end of the contracts seem so far away. What if the CBA in place at the end of these contracts doesn't allow teams to bury cap hits in the AHL? What if LTIR is different? What if the Rangers had another Wade Redden situation and couldn't bury a bad contract in the minors?

In most cases, the only way to get rid of these contracts is to trade them. However, it's very difficult to trade a player who is already in or beyond his prime, especially when he has a large salary cap hit and many years remaining on his deal.

Only two of the 15 longest contracts in the NHL have been traded at least once (Mike Richards and Jeff Carter, both to the Los Angeles Kings). The Vancouver Canucks have not been able to complete a deal involving Luongo, largely because of his insane contract.

Teams need to think about the future trade value of these players when thinking about handing them a lifetime contract. If Vancouver didn't sign Luongo to a lifetime deal, many more teams would likely have interest in him since he's still a top goaltender. Without the huge contract, the Canucks' return package for Luongo would also be better.

The Luongo deal is also a great example of a team making a long-term commitment to a player, then having that player being overtaken by a younger guy who gives the team a better chance to win. Going into next season with their backup goaltender on an expensive lifetime contract is no way to do business.

The NBA's new CBA allows players to sign for a maximum of five seasons, which prevents teams from getting stuck with expensive contracts to players who underperform or can't stay healthy. The NHL would be wise to adopt a similar system in its new CBA.

If there's one part of the owners' proposal that fans should agree with, it's limiting contracts to five years. This would allow players to still make good money, but it also prevents teams from making huge financial commitments to players that will ultimately hurt the franchise in the long run.

In a salary cap system, these lifetime contracts are an awful idea. If a player really is loyal and wants to remain with one team for his entire career, then he should be willing to sign two five-year deals (or whatever seems right for both sides) over one 10-year deal.

Too many of the players who have received lifetime contracts since the lockout have either not lived up to their salary with their on-ice performance or have battled injuries.

The negatives outweigh the positives when debating whether or not lifetime contracts in the NHL are a good idea. It's clear that these types of deals are bad for the sport and should never be allowed to happen under the new CBA.

Nicholas Goss is an NHL Lead Writer at Bleacher Report. He was also the organization's on-site reporter for the 2011 Stanley Cup Final in Boston. Follow him on Twitter.

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