Friday, September 4, 2009

Brassard, Finances, Bettman and Other Musings

I have been quiet over the past week, for a variety of reasons. First, the normal pressures of work and such have been intruding on my writing time, and secondly, I wanted to be a more passive observer of some of the developments and let the thoughts percolate a bit. For better or worse, here are my takes on the recent activity, both across the league and for the CBJ:

Brassard Extension -- News broke about an hour or so ago that the CBJ have signed Brassard to a four year extension, locking him up through the 2013 - 2014 season. Portzline reports that Brass will make $2.8 million in 2010-2011, $3.0 million in 2011-2012, $3.3 million in 2012-2013, and $3.7 million in the final year. Nice raise over the $765,000 he will make this year, but well earned if he plays at the pace he showed last year before the injury. Really nice move by Howson to lock him up now, as this not only takes some heat off down the line, but provides a little near term predictability. Oh, by the way, when he comes off this contract, he will still be an RFA, not a UFA!

This leads to my next topic . . .

Finances -- Over the past couple of days, the boards have been filled with wailing and moaning over the fact that the CBJ are near the bottom of the league in salary expenditure. Similarly, the trading/player movement speculators over at HF Boards are pretty consistently bashing the CBJ as a "budget" team. As usual, I have a slightly different perspective to offer.

First, obviously nobody is going to confuse CBJ ownership with George Steinbrenner in terms of unfettered spending. All the same, I have not seen a reticence to spend money to improve the team in a manner consistent with the long term plan. Note the italics for emphasis. Howson & Co. have charted a course of long term growth and improvement through careful nurturing of young talent and selective addition of veterans with specific profiles. In investment parlance, Howson is a "buy and hold" guy, a la Warren Buffett (who has not done too bad for himself, by the way).

In a salary cap environment, you need to actively manage the "gap" -- the space between your payroll and the anticipated salary cap for a given year. On teams with a high percentage of veteran players, the gap is managed through retirements and salary dumps. When you have a young team, like the CBJ, however, your opportunity for salary dumps is minimal, as there are few assets you want to dispose of. Similarly, because you are young, retirements are not that frequent. This is particularly true when you have a relatively high percentage of your talented players on entry level deals. The jumps from entry level to the first "real" contract are big -- Brassard will jump just over $2 million from the last year of his entry level deal to the first year of his new contract. In the next four years, he will have similar negotiations with Mason, Voracek, Filatov, Moore and others. A lot of coin is involved in those moves, but by budgeting for it in advance, you are able to keep more talented players together, provide predictability, and hopefully attain better long term performance consistency for the team.

If you want to see an example of how not to manage a payroll with a lot of young talent, look at Chicago. Aside from the whole qualifying offer fiasco, the Chicago payroll is a train wreck. They have offered these huge, lengthy, front weighted contracts to Campbell, Hossa and Huet, and now are in the position where they know they can't keep all of their young studs when contract time comes next year. These hugely long, front weighted contracts make the player effectively untradeable in the early years of the deal, and the cap hit paralyzes your ability to keep young talent. The net result is that you rot away from beneath. It is absurd that Chicago, who has just turned its fortunes around, is in a position where they feel they must win this year, as the team will not look the same next year.

Howson has thus far avoided the temptation to use these manipulated contracts (which will be addressed in the next CBA), in favor of long term stability. Now that the unknown of Brassard is solved, he now has a better idea of what he has to play with. Vermette will be a priority, likely before Thanksgiving, but now Howson will likely start fiddling. I still expect a deal or two before the end of September. However, even if a deal does not emerge, the positives of having a lot of cap room right now (particularly if the cap goes down next year) far outweigh the negatives.

What Commissioner?? I am not sure how anybody can look at the events of the past couple of weeks and not conclude that the league needs new leadership. Let's review. First, the NHLPA fires its leader in the middle of the night, for no apparent reason. This is giving rise to fears that a hard liner will follow, and that another work stoppage is threatened. Sure, the Commish has no say over the NHLPA, but if he set a tone of cooperation and a goal of improving the game, we would not have this Loony Tunes atmosphere. Hopefully cooler heads will prevail, but a bad economy and a potentially shrinking salary cap have many free agents still looking for homes, which will only increase the lure of the KHL (assuming they can stay afloat), and make stances harden unless early and conciliatory talks are initiated.

Second, Versus has now disappeared from DirecTV. I frankly don't care whether it is Comcast or DirecTV who is at fault, and undoubtedly there is blame on both sides. However, can you see this happening at all, ever with the NBA, NFL or MLB??? Of course not. The commissioner would have been on the horn, and the dispute would have been resolved. Bettman has been asleep at the switch on this one.

Finally, the Phoenix fiasco. With all of the other issues, the Commissioner has elected to make his stand on preserving hockey in Phoenix. Hello??? Are you nuts?? Even Jerry Reinsdorf had to pull out when Glendale refused to play ball. This is just another example of stubbornness clouding judgment. So you don't like Balsillie?? Big deal -- as if all of the other owners are saints. . . Instead of leading the lemmings to the cliff, sit down, negotiate the best deal and let the game grow where it can flourish! By taking this hard line stance, Bettman is taking a risk that Judge Baum will make some rulings that the NHL does not like, which could be problematic down the line when other owners get itchy. There is a saying in the legal world that "bad facts make bad law", and nothing could be more relevant here. Don't take that risk, Gary. What would be so bad about the two bidders getting together, putting together a nice bid, and get everyone to agree on Winnipeg instead of Hamilton? Maybe the offer goes down from the $212 million, but lots of people walk away happy.

Bottom line is this - you can't have a sport run by somebody who places ego over reason, and has a misplaced sense of priorities. Wake up, owners!!

Camp -- Kudos to Hitchcock and the whole gang for coming up with the "Fantasy Draft" approach for the first days of camp. Brilliant! There is more buzz about camp opening than ever before, and we will do our best to provide some nuggets as camp goes forward.

Coming Attractions --

Saturday -- Part III of the series on the Arena lease situation
Sunday -- Training Camp Preview

Got my season tickets yeasterday, my new jersey ordered andthe flag is getting ready to be hoisted. Hockey time is near!!


roadman said...

Concise and articulate. Love to read your stuff.


Lets drop the puck!!

snappy said...

Great stuff!! Love your articles. Very thorough.

BZArcher said...

Good to see you back! Here's to 2009-2010!

Rob P. said...

Good stuff, JAL, as usual.

Are you getting a name or number on your new sweater?

patrick said...

Bashing us as a "budget" team!?! translation, we are penny pinchers. its an odd word choice. esp given a tight salary cap in the league. shouldnt any good gm aspire to do well with their budget and hence, be a budget team. so i would approve of it if it meant that we were'nt wreckless and improvident. anyhow, great job addressing this matter.

JAL said...

I always put my last name on jersey. For years I had number 7, which was one of my numbers playing water polo in high school and college. Last year I switched to number 24, which was my other number, and we made the playoffs. Hence, the new jersey is . . . 24!

etcbeatty said...

Great insight, and I think your characterization of the CBJ as controlled spending versus a hard-line budget team is a good call.