Wednesday, July 12, 2006

Playing the blame game

It's hard to take when as an organization you're successful and you draft well. But then you're penalized by a cap system and you have to make choices.
It's an unfortunate side effect of that lovely CBA we lost a year of hockey to get. The same one advertised as benefitting small market teams like us, glossing over the whole "if you draft well and develop consistently, you won't be able to keep them" thing.
Muckler didn't want to give up stars such as Havlat and Zdeno Chara. But the new system forced him to do it.

It's a common refrain these days, especially in light of the recent Martin Havlat trade, to point to hockey's new collective bargaining agreement as professional sports' next two-faced monster.

On one hand, the NHL's new deal professed to be rescuing small-market franchises from the depths of playoff-less despair. On the other, it began to slowly rob some of those same clubs of their precious stars.

It's a convenient argument, there's no doubt — and especially when a popular star leaves town.

The curious thing, however, is that the NHL's salary cap is currently at $44-million, a dollar figure no Canadian team's payroll — aside from the decidedly big-budgeted Maple Leafs — has hit. Ever.

Muckler himself admitted that, had he retained both Havlat and Bryan Smolinksi, his team's payroll would have been between $47- and $48-million. And that's a total which doesn't even factor in the dear, departed Zdeno Chara, who signed a mammoth, $37.5-million deal with Boston on July 1.

One wonders what's changed the past two years to transform the tight-fisted Senators franchise into a team willing to move into the $50-million territory.

The point being that, unless billionaire owner Eugene Melnyk's master plan was to play coy with the fact he had far more wealth to lavish on this franchise than he had to this point, there's no way Muckler could have kept this club together — old system or new.

These choices he talks about have always been part of the NHL, aside from a select few teams.

In 2003-04, for example, the last season played in the NHL without a cap, 12 teams spent more than the $44-million figure. Toronto (6th, $66.4-million) was the only Canadian team in that group. Washington (10th, $50.9-million) was the only club eligible for revenue-sharing this year that went over $44-million in 2003-04.

Whatever your definition of a small market, not a lot of them were hitting the salary levels that are now the 'team-destroying' limit.

Of course, there are far more subtleties here than I'm highlighting, and a lowered unrestricted free agency age is having a salary-boosting effect that wasn't present previously. Far be it for me to come to the defence of what is a flawed CBA, but if we're going to play the blame game, let's at least be realistic.

Under any economic system, short of one that would triple the Greater Ottawa Area's population, this team's dismantling was on its way.

(As an aside, with all of the outcry over Muckler's recent moves, one would think he'd been butchering a dynasty as opposed to effectively reworking a roster that obviously wasn't getting it done. Is it that out of touch to say this team has as talented a cast as last season's group?)

17 Comments:

At 4:35 AM, July 12, 2006, Anonymous David Johnson said...

The thing we have to remember is that the new CBA wasn't put in place to to allow the small market teams to collect 6-8 superstar players like the big market teams did in the past, but rather to stop the big market teams from collecting 6-8 superstar players. Yes, this means the Senators still will not be able to keep all their talent (just like they wouldn't be able to under the old system). At least they will be able to keep some of it because Redden will make $6.5 million a year and not $8.5 million.

effectively reworking a roster that obviously wasn't getting it done.

Only time will tell if he effectively rebuilt the team into a winner. Honestly, I don't see any significant attempt to address the flaws of the previous playoff failure teams. That being, a lot of skilled, somewhat soft players but no hard nosed, fearless, in your face type players. Losing Chara and replacing him with softies Corvo and Preissing only make things worse in my mind. And with Havlat, Smolinski and Varada gone the 4th line is going to look much weaker than last season.

 
At 5:31 AM, July 12, 2006, Blogger Andy Grabia said...

You do realize you quoted Strachan? It's the equivalent of quoting Joe Morgan in baseball, I think.

Just making sure it wasn't an error on your part.

 
At 8:31 AM, July 12, 2006, Anonymous Rachael said...

While I don't believe he should be blaming the cap, especially since it was something that owners and GM's wanted, I think that there has to be some blame put on other GM's who handed out ridiculous contracts at the end of the off season...I'm looking at you JFJ (McCabe is not worth 5.5 mil) and you Jay Feaster (Richards 7.8 mil). If these contracts hadn't been so huge Chara, Redden and Havlat might not have had such high numbers dancing in their heads.

I had such a positive outlook around this time last year when players were signing smaller contracts because they were so happy to be back on the ice, and now it just seems like we're back to where we were a couple of years ago (although with a better product). I think that the NHL should've held off on raising the cap another year to see if all this added revenue was just a fluke because diehard fans were just so happy that hockey was back.

As a Sens fan, I agree that the roster needed to be reworked, but I think Muckler could've done a better job with it. I wanted to see Havlat gone since I was sick of his only loyalty being to the almighty dollar and not the team, but I was hoping to get at least a 2nd line center for him, not some questionable D.

 
At 8:32 AM, July 12, 2006, Blogger Black Dog Hates Skunks said...

James, an obvious point but one that had to be made.

Without the CBA Redden would have signed for 9M in NY, they may have held onto Havlat until next season when he and Phillips signed for 7M each with Detroit and Colorado.

Muckler is just covering his ass - he was brought into win a Cup and he has failed miserably. And Strachan lives in another world.

Hard to say where the Sens are heading - they will be near the top of the conference again, I think, and therefore have a chance, as always. And will probably blow it, as always.

 
At 9:30 AM, July 12, 2006, Anonymous rajeev said...

dont mean to be rude, james, but i dont see how someone who writes so much about hockey could miss the obvious and determinative point here. no, ottawa could not have kept havlat and chara once they hit ufa status (at least not without meaningful revenue sharing among teams). however, ufa status would not have happened this year. chara and redden each would have remained in ottawa for another 2 years (each likely given sub-6 million dollar deals in arbitration), and havlat would have remained a senator for even longer. yes, ottawa didnt have the money (w/o revenue sharing) to keep their core together past the ufa age of 31, but they certainly could have kept the team together for another 2 years. this is certainly an important point; ask senator fans if they would have liked to see that core get another 2 cracks at the cup. no one is suggesting under the old cba small market teams could have kept dynasties together ad infinitum. but they could keep players on their roster until they were leaving their prime. now, that is not the case. i am not sure how you and many others are missing this.

 
At 11:10 AM, July 12, 2006, Anonymous Andrew said...

2001 playoffs: Swept in the first round.
2002 playoffs: Second round exit.
2003 playoff: Lost in conference finals.
2004 playoffs: First round exit.
2006 playoffs: Lost in second round.

This, my friends, does not a dynasty make. Lamenting the loss of two stars to the UFA market does not constitute the dismantling of one, either.

 
At 11:10 AM, July 12, 2006, Blogger J. Michael Neal said...

I had such a positive outlook around this time last year when players were signing smaller contracts because they were so happy to be back on the ice, and now it just seems like we're back to where we were a couple of years ago

To which I say, "Duh." The new CBA does absolutely nothing to change the financial value of a star player; they still produce the same marginal revenue that they did before. The new system is not going to change how much the top players are paid very much. Take a look at the NFL, and decide if a cap has such an effect.

Where the CBA is going to bite is on the non-star players. It's going to bring their salaries back to what they are actually worth to a team, which is not very much.

Baseball research has come up with the concept of a "replacement level" player, which is a player that you can sign as a minor league free agent or pick up on the waiver wire. Players at this level, or even slightly above, should make the major league minimum salary if you are going to have them on your team, because they don't provide any advantage over a dozen other guys you could pick up instead.

From there, the curve of salaries relative to ability is not linear; it's pretty steeply geometric. There are two general places where the salary structure is not really at its market clearing price, though there are plenty of individual exceptions. The first is that players who are not yet eligible for free agency are generally paid less than they are worth to a team; when you complain about earlier free agency, remember that you are arguing that players should have to spend more of their careers making less money than they are worth to the owners.

The other exception is that there are a lot of near replacement level players that are paid a lot more than they are really worth. If you are a baseball fan, and your team signs a mediocre first baseman for a couple of million dollars, you should know that at any point in the last 7-8 years, you could have signed Roberto Petagine for close to the league minimum, and probably gotten better production from him.

All of this is true in hockey, too. I love my Red Wings, and in an abstract sense, I'd like them all to make a lot of money. Last year, I loved watching Mark Mowers play. I wish him well in Boston. The simple fact is, though, is that he's a replacement level player. Any team in the league could haul someone out of the AHL who could play as well as Mowers does. So, paying Mowers any more than league minimum doesn't make any sense. So, while I wish him well and many big paychecks, I'm glad they're going to be someone else's paychecks.

If hockey owners are rational actors (which is frequently debateable, both in the economic and real world senses of the phrase), it's at the bottom end of the payscale where you are going to see salaries erode, not the top.

 
At 11:45 AM, July 12, 2006, Blogger CMcMurtry said...

Where the CBA is going to bite is on the non-star players. It's going to bring their salaries back to what they are actually worth to a team, which is not very much.

Have you been living in a cave for the past month? Or is anyone on the third line or above, or on the second defence pair, a "star"?

 
At 1:13 PM, July 12, 2006, Anonymous sabre fan said...

In the old System, the Senators would not have been contenders for the next few years. I have a great deal of respect for Muckler, but I doubt he would have been able to get a good goalie for the team under the old system. Gerber would still be sitting in Carolina next season, and who would be in your net? Hasek and a prayer or Emery (one OT save in three playoff games against the Sabres)?

I can understand why you’re upset to see Chara go, but with the money Boston paid him, they got marginally better in the short term and probably worse in the long run. When a team overpays for a single player they will be very limited on who else they can sign. After all, this is a team sport and no single player wins the cup on his own. If that were the case, Gretzky and Hasek would have 25 cups between them.

 
At 1:31 PM, July 12, 2006, Blogger CMcMurtry said...

Gerber would still be sitting in Carolina next season, and who would be in your net?

Gerber's 31 years old. He's not affected by the new CBA. He would have been a UFA regardless.

 
At 2:28 PM, July 12, 2006, Blogger James Mirtle said...

chara and redden each would have remained in ottawa for another 2 years (each likely given sub-6 million dollar deals in arbitration), and havlat would have remained a senator for even longer. yes, ottawa didnt have the money (w/o revenue sharing) to keep their core together past the ufa age of 31, but they certainly could have kept the team together for another 2 years.

No, you're incorrect. Even had Havlat and Chara signed more reasonable contracts, the Senators payroll would still hit at least $50-million (as I pointed out, Muckler said keeping Havlat and Smolinski would have put them at about $48-million).

The whole point is, regardless of their players hitting UFA age or not, they wouldn't have been able to compensate the team they had at market value.

 
At 3:43 PM, July 12, 2006, Anonymous rajeev said...

no, you're incorrect, james.

there's really no such thing as market value when you're a rfa. chara's market value as a ufa is around 7.5 mill, we found out. under the old cba, the best he could have hoped for was a 2 year deal through arbitration; this would have likely gotten him less than 6 mill a year. same goes for redden. havlat would have maybe gotten 3 to 4 at the most on a 2 year deal. spezza would not have had arbitration and they would not have had to give him 4.5 a year for 2 years. he probably would have gotten a 1 year deal at 2 or less.

muckler's comments regarding 48 mill are 1) meaningless. who cares what he says? look at the facts, not a principle actor's statements re them (youre a journalist, right?). 2) this figure includes the 6 mil for havlat that chi gave him, which ott was under no obligation to even come close to. if you account for the .5 they save from redden if he signed as a rfa under the old cba, the 2.5 they save from not having to sign corvo, the 2.5 they save on spezza. that takes you to 5.5 mill saved under the previos cba. they could have used that to keep chara for 6 and havlat for 3. meaning, it would have cost them 3.5 million extra to keep last year's team in tact for another 2 years under the old cba.

is it possible melnyk wouldnt have ponied up to do this? it's possible. is it likely? i dont think so. did he get the chance to consider under this cba? no, he didnt.

are you following me here?

while it's possible to not be able to afford a payroll your team may deserve under the old cba, it is impossible to afford a payroll a team may deserve under this cba. this is an important,a nd i think obvios, disthinction. it is also incontroversial.

 
At 4:35 PM, July 12, 2006, Blogger ninja said...

Deserve?

 
At 4:58 PM, July 12, 2006, Anonymous rajeev said...

deserve, warrant, are eligible for, are entitled to receive, are capable of receiving...

 
At 5:02 PM, July 12, 2006, Blogger James Mirtle said...

Rajeev, I didn't miss any of the 'obvious' points you're pointing out as the post addresses this issue by saying Ottawa couldn't afford this team in either scenario. As I said, no small-market teams had payrolls at the $44-million level previously and it's unlikely the Senators would spend to keep this team regardless of what system the league is using.

I also point out that the lowered UFA age has inflated the salaries of players like Havlat and Chara.

 
At 10:45 PM, July 12, 2006, Blogger J. Michael Neal said...

Have you been living in a cave for the past month? Or is anyone on the third line or above, or on the second defence pair, a "star"?

No, I haven't been living in a cave. What I have done is watch the path taken in other sports in response to a new salary cap/revenue sharing system. The effects of the two upon marginal revenue, and thus the rational response by ownership, are different. In both cases, however, it usually takes several salary cycles (which is equivalent to a season in American sports) for GMs to catch on. Some of them never do, and either continue to run inefficient teams or get replaced.

I think that this calls into question the financial/economic acumen of most GMs. It's why you're watching the old style GM, whose main qualification is being an ex-player and on the ice knowledge, is disappearing in favor of GMs who know a spreadsheet and a financial statement.

As in a lot of things, hockey lags well behind other sports in modernizing. I've thought for years that there was a competitive advantage to be had for a team that understood just how valuable young talent was, since you get to pay it less than market rates. This is less true now, since with a UFA age of 31, almost every player in free agency was in the decline phase of his career, and thus probably wasn't a good buy in a world where players tend to be paid for past performance rather than future performance.

Lowering the UFA age will change this somewhat, but not entirely. With the salary cap, paying less than market rates is going to be important for everyone. It is true before, and it is true now, that your core talent has to be young. Free agency is for adding the last couple of pieces.

There is some interesting research being done on the marginal value of a player based upon the idea that each marginal win does not have the same value. Again, this research is most advanced in baseball. Someone's paper presented at the SABR convention a couple of weeks ago claimed that a free agent worth four wins is worth much more if he moves you from 76 wins to 80 wins, or from 88 to 92 than over any other increment. The numbers would be different in hockey, because of both the different season length and the different playoff structure. Still, it points out that a GM needs to know not only what his team needs to get better and its implications on his salary structure, but also to have a really good idea of where his team stands right now.

Is Chara's contract a good one for Boston? It might be. A free agent is going to be worth a lot more if he's the difference between your team making the playoffs than he is in either case of not making the playoffs with him or making the playoffs but not being a serious Cup contender whether he's there or not. I don't feel qualified to offer an opinion about where the Bruins are exactly as a team.

 
At 11:55 PM, July 12, 2006, Blogger CMcMurtry said...

Actually, I wasn't talking about Chara's contract. It's more than I would've paid, but he certainly qualifies as a star, and stars get the bucks.

However, you said it is the stars reaping the benefits of this CBA. I don't agree.

You're still seeing a lot of above average, marginally impactful players get the big bucks.

 

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