The art of negotiation
(Whose crystal ball is better?)
First things first: the Caps just got a hell of a deal. They stole a bunch of money from Alex Ovechkin (or, alternatively, Ovechkin, in his limitless good will, saved Ted Leonsis a bunch of money). If the deal truly was six years for $54 million and then an additional seven years for $70 million, Leonsis et. al. is the greatest negotiating team of all time.The celebration in Washington's been good to see the past few days, if only as a reminder for those who doubt the passion of the hockey fans in D.C. And the bloggers' coverage has certainly been interesting.
To start, however, it's prudent I think to point out one thing if we're going to address the negotiation side of things: The Capitals essentially gave Ovechkin the largest possible contract the CBA allowed them to.
The cap on individual salaries this season sits at $10.06-million, and even if we go by the Rick DiPietro, 15-year standard, that's a $150.9-million deal. Ovechkin signed for 13 years at $124-million, and given where the cap currently sits, it would have been very difficult to give him more without paying out into old age.
The 'value,' then, in this deal comes in the fact Ovechkin will presumably be underpaid down the line, because he certainly won't be next season. In fact, his $9.54-million cap hit will be $2-million higher than every player not named Sidney Crosby or Brad Richards, as there aren't likely to be any free agents who sign for more than $7.5-million per year this off-season.
(Marian Hossa being one potential exception.)
Ovechkin's certainly a terrific player, but I don't think you'd be hard-pressed to name 10 who have been better this season. Along with Crosby, Roberto Luongo, Nick Lidstrom and Jarome Iginla are the Hart Trophy candidates at the midway point.
And all three are signed to deals worth $7.45-million a year (or less) for at least another two seasons.
The real question, to me, is just when Ovechkin's cap hit becomes a bargain at $9.54-million, and how much the NHL's upper limit will have to rise to bring that about. (Vincent Lecavalier's an unrestricted free agent after next season; does he then land the league's richest deal?)
We're probably not far from a $60- to $65-million salary cap — four or five years, at most — which would open the door for a $13-million player close to the time Sidney Crosby's five-year extension expires. If he then signs another five-year pact for, let's say, $60-million, perhaps Capitals owner Ted Leonsis looks all the wiser.
But if you ask me, that's a pretty subtle victory, and not a slam dunk. There's no guarantee that top players' salaries will form a linear line that leads to as high as they can go, not when Jaromir Jagr was making $11-million a season seven years ago.
Barring injury, Ovechkin's deal certainly could be a win for the Capitals in the future — but what they're really saving is a few million a season well down the line.
All we know for sure is that, next season, they overpay.