The NHL salary cap is about relative value of players, a concept that some GM’s obviously don’t understand. The idea is simple, the financial pie is limited, and every bit eaten, means less for everyone else. It’s not THAT difficult a concept to undersand but it’s certainly lost on Dave Nonis in Toronto. This isn’t really news to most Toronto fans, it certainly isn’t to me as I look at the salaries of some players, but yesterday I received a news blast saying that “Dave Nonis is actively scouting Mike Richards” to which I proclaimed out loud “M**therf**ker”.
Mike Richards isn’t so bad
Mike Richards is by no means a bad player. In fact, as a character player, he may actually be a goodfit for Toronto, a team that’s severely devoid of character. However, Dave Nonis striking a deal makes me nervous. He seems to like signing average players to above average salaries. This is great for the player – Dion gets to drive around in a Bentley. However, this is very, very bad for the team. To make it worse, Nonis seems to be more than happy to sign players to absurd ‘no-movement’ clauses, an idea that seems simultaneously baffling and common. If they weren’t already virtually impossible to move given that the other team would have to take on the inflated salary, the no-movement clause seals the deal.
There are a few players whose contracts are approaching expiry that the Leafs might need to sign in the off-season and there is all but no contract room to do it (i.e. Kadri, Santorelli, Booth, Franson). There’s also, hopefully, Nylander and another good 1st round draft pick to sign. This is where we come back to the pie concept. When all the pieces are gone, then no one gets fed.
The salary cap is about relative value and its zero-sum. A part of the salary cap allocated to one player, can’t be allocated to another. To optimally build a team a GM can’t sign a player in isolation; the GM must simultaneously consider that players salary and that of all other players. This is where Nonis fails. For example, in my opinion, Phaneuf isn’t worth 7 million a year… but if this were baseball, and there was no cap, it’d be irrelevant. However, in a cap system, it’s actually harmful. While I don’t think Phaneuf is worth the 7 he’s getting paid, he certainly isn’t worth 10.1% of the salary cap. Now, what if we consider Clarkson at 5.25 a year (which again, I don’t think he’s worth), but he definitely is not worth 8% of the salary cap. That means these two lemons are taking up almost 20% of the salary cap. Now look at a player like Santorelli, who has, in my opinion, been great this year, and only takes up 2% of the salary cap. His contract will come up, and he may deserve a raise, particularly if you look at his compensation/contribution (at 1.5 million a year) versus Clarkson’s (at 5.25 million). Kadri, also, would have a similar argument. Bernier is now a number one and he, too, could make an argument for a raise.
The problem is, there isn’t any pie left. Dave Nonis gave it all away.
Economist/epidemiologist interested in the intersection between sports analytics (advanced stats) and intuition.