There is a shift happening in NHL finance, one which represents both a challenge and an opportunity to the league’s member clubs.
In the past, the highest-paid players were free agents with a long body of work behind them. Increasingly, though, teams have been signing young players—in a lot of cases players who haven’t even completed their entry-level contracts—to massive long-term deals.
Smart teams will understand the implications of this shift and alter their approach to take advantage. Competitors with less agile management groups will struggle with the change.
Last week, Larry Brooks of the New York Post wrote about the death of the bridge contract, specifically citing the Florida Panthers’ signings of Aaron Ekblad, Aleksander Barkov and Vincent Trocheck to long deals at significant money. He also noted, correctly, that this was despite long protestations from general managers about the cost of signing players coming off entry-level deals.
“[T]he bridge contract is a thing of the past,” writes Brooks, “blown up by management under absolutely no duress; blown up by management that, represented by owners and the commissioner, complained bitterly about the escalating costs of second contracts during the last lockout negotiations.”
Florida’s signings are the latest step in a long process which has seen the bridge contract—typically a cheap, short-term deal to a player coming off his first NHL contract—increasingly fall out of favour.
In 2009, then-Anaheim manager Brian Burke told Pierre LeBrun of The Canadian Press that the Edmonton Oilers had killed the cheap second contract with offer sheets, including one to ex-Duck Dustin Penner. Three months after Penner left the team, Burke gave a rich five-year extension to centre Ryan Getzlaf; that was followed less than a year later by a similar deal for Corey Perry.
Still, there’s an obvious jump from a player in the Getzlaf/Perry (or Ekblad/Barkov) range to somebody like Vincent Trocheck, a former third-round pick who, as recently as 2014-15, was a member of the AHL’s San Antonio Rampage.
Yet, there are some obvious advantages to the path that Florida and other teams with a similar mindset have taken.
A big one is cost, certainty. Players coming out of entry-level deals don’t have access to arbitration and as a result in the past have often been muscled into taking cheap (generally two-year) extensions. In a lot of cases, though, that only defers trouble. Players come out of those bridge deals with arbitration rights, relative proximity to free agency and often enough of a desire to be paid what they’re actually worth.
A second benefit is paying for performance. NHL forwards tend to be most productive in their mid-20’s, as many studies, including one by former SBNation writer (and current Hurricanes stats guru) Eric Tulsky, show.
When the Panthers sign a 23-year-old Trocheck to a five-year deal, they can be reasonably confident they’re signing him for the best years of his career at a time when the team has maximum leverage. In contrast, whoever signs a 28-year-old Trocheck at the end of that deal will have to handle the player having maximum leverage and worry about declining production as he enters his 30’s.
There is of course risk involved in signing a young, relatively unproven player. However—as anyone who has watched the declines of David Clarkson, Dustin Brown and others can attest—there’s risk to signing older, relatively proven NHL’ers, too.
The risk is a lot lower with young players because of the way NHL rules work. If Trocheck’s play doesn't live up to expectations at age 25, the Panthers can buy him out for one-third the value of his contract. That’s not true of older players and some—including Clarkson and most of the unrestricted free agents signed this summer—sign signing bonus-laden deals that are virtually impossible to erase.
Finally, it’s important to realize that in a salary cap world, the signing of NHL players is a zero-sum game.
A zero-sum game is any situation where the gain of one participant corresponds to an exact loss of another. In the NHL, players are guaranteed a fixed share of hockey-related revenue, no matter what. That means that if NHL teams are now spending more money on young players, that money is coming from some other group, since there’s a fixed number of dollars that all players draw from.
Smart teams will note where the resultant savings are. For example, perhaps the shift in pay means that second-tier unrestricted free agents like Lee Stempniak a year ago become undervalued; a well-run club would adjust its procurement strategy to exploit that change. A less competent team, in contrast, would fail to recognize where the new savings are.
NHL managers may have fought against big second contracts for their players, but the smart ones are embracing the new reality and looking for the resulting bargains that the changing dynamic is creating elsewhere.
Jonathan Willis covers the NHL for Bleacher Report. Follow him on Twitter for more of his work.