Why Limiting Contract Term Is A Bad Idea

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Gary Bettman (Tom Turk/THW)

Creativity is paramount to the functionality of sports leagues.  Managerial creativity is one of the best features of the NHL’s current system.  Sure, the system could someday allow for the trading of salary cap space or the inclusion of cash in a trade in order to pay an albatross of a contract, but overall, the NHL’s system allows for creativity amongst its general managers.

Let’s not mess with that.

By all accounts, the NHL owners are attempting to impose further restrictions on the next NHL collective bargaining agreement.  Rumor has it the owners wish to limit the length of contracts, remove the arbitration process and increase the age of free agency, among other recommendations.

These types of recommendations will further restrict managerial creativity.

In the NBA, contracts are capped in terms of both length and pay.  The NBA has become a league of have and have-nots.  A few teams have a chance to win and the rest are hoping to hit it big in the draft lottery.  We must acknowledge, however, that the NBA is a league that has fewer players and the league works in such a way that the best players have more of an effect on each game than the best NHL players do.

Donald Fehr of the NHLPA (Kirby Lee/Image of Sport-US PRESSWIRE)

Even so, the NBA’s general managers are very much handcuffed in their ability to improve their respective teams.

Think about it for a second.  A player’s own team can offer that player more money than every other team in free agency, but if that player does opt for the open market, essentially every contract offer from every interested organization will be the same.

What is the fun in that?  If Los Angeles has cap space and so does Detroit, where would you want to play?  No offense to the Pistons but the attention and weather of Los Angeles would be quite a bit more appealing.

The Pistons, in that situation, are restricted from offering more term than the Lakers (if both want to put out a maximum offer).  What if Detroit really wanted that player to change the face of their franchise and thought he was worth double what they were able to offer?  The system works in such a way that precludes Detroit from using such discretion.

The NHL’s current system, while restrictive in the sense that one player cannot make more than 20% of the average annual team salary cap and obviously restricted by each team’s respective salary cap, allows for far more creativity.

If the Los Angeles Kings and Detroit Red Wings both see a player that interests their organizations in free agency, they can offer entirely different contracts.  The Kings may decide a player is worth a nine-year deal with an average annual salary of $6.0 million.  On the other hand, the Red Wings may prefer a short–term four-year deal with a higher average annual salary of $8.0 million.

(Jayne Kamin-Oncea-US PRESSWIRE)

If the NHL owners get their wish, then each team would only be able to offer a maximum of a five-year term.  Essentially, what happens is the contract dollars become very similar and other factors come into play—much like the NBA.

For small market teams that becomes a bit worrisome.  Even if a player’s salary may go farther in Buffalo than it does in New York City, how many players are going to play in Buffalo over New York City if the contract offers are very similar?  I would venture to guess not too many.

Alternatively, some fans may argue that long-term contracts in the NHL have made contract movement more difficult; granted, there is some merit to that.  That being said, a general manager cannot just freely hand out a ten-year deal without accounting for the repercussions associated with such a transaction.

Never mind the fact that long-term deals have not proven to be as difficult to move as some may think.  Players like Jeff Carter, Jack Johnson, Brian Campbell and Rick Nash have all changed teams after signing long-term deals.

Rick Nash Blue Jackets

Rick Nash (Jeanine Leech/Icon SMI)

In reality, matches can always be found for the right price.

The NHL has slowly moved from strictly player-based transactions to a “contract for contract” league but there remains some distance between the NHL and its NBA brethren.

If parity is the foremost concern of the NHL, it should take a page from its MLB counterparts.  In baseball, innovative management has made smaller-market teams more competitive.   Teams such as the Tampa Bay Rays formulate their own visions and pours organizational resources into gaining competitive advantages both on and off the field.  Major League Baseball allows them to do so because trades and contracts are not restricted, aside from a luxury tax that only affects the spending habits of a mere two or three teams.

If the league is to make a convincing argument that this limitation is necessary, why then did owners Geoff Molson, Ed Snider and Daryl Katz all approve contracts in excess of five years?

The question answers itself doesn’t it?

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