San Jose Sharks Contracts, Part 3: Patrick Marleau’s Contract

For the San Jose Sharks contracts, I assigned my lowest grade, a ‘D’, to Patrick Marleau’s contract. Marleau’s contract is for three years and $20 million. He is in year two of this contract. At a cap hit of $6.67 million per season, he is the 39th largest cap hit in the entire NHL. For much of his career, that would have been very reasonable value. At this point, it is not.

I won’t spend too much painting the picture around Marleau’s play, but the numbers are ugly for a player once among the best in hockey. Marleau is a team worst minus-23 this season, following last season where he was a team worst minus-17. In 78 games this season, he has 44 points, only 21 of which came outside of the Sharks power play. As an 18-year old rookie, Marleau had 25 even strength points in 74 games.

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Marleau’s contract has a ‘no movement clause’. This gives him substantial control over whether he stays in San Jose for his entire contract or whether he goes. Trade rumors swirled with great frequency this season, but rumors are what they are. Neither the Sharks management or Marleau have gone public with their thoughts.

Marleau is in the dreaded ‘negative value’ category. That means his contract is so out of whack with his performance, the team would be better off giving up an asset just to move on from him. The commodity the Sharks would want if they could get out of Marleau’s contract is cap space. Yet, it is unlikely that the Sharks will be able to move Marleau without retaining a significant part of the cap space they wish to clear.

The cost to buy Marleau out of his current deal would be substantial. According to CapFriendly, the Sharks would take a total cap hit of $4.5 million, spread out over two seasons. That amount is restrictive, bordering on prohibitive.

The Sharks are in a bind with this contract for each of these reasons: the pay versus performance gap, the challenges in moving him, and the cost of a buyout.

Working cynically in favor of Marleau’s contract, is the looming NHL expansion. NHL expansion may happen next year, with an expansion draft possible in June 2017. The reports are that teams will be able to protect up to 11 players. The salaries of the team’s unprotected players will need to add up to twenty-five percent of the league’s salary cap, around $19 million. A contract like Marleau’s would be ideal to put in the mix, as it would represent a substantial part of the twenty-five percent requirement. The details on any expansion, let alone an expansion draft, are not set. How a draft process handles pending unrestricted free agents and no movement clauses are among issues that need to be addressed. If the dotted i’s and crossed t’s work out for the Sharks, Marleau’s contract could be used to protect other players.

Marleau’s Contract History

Teams need to be forward-looking when it comes to evaluations. Still, Marleau holds a unique place in Sharks history and I’ll take a few moments to look at his contracts in historical context.

Many argue Marleau has taken ‘hometown discounts’ over the course of his career, I don’t agree and the numbers do not bear that out.

Marleau’s peer group includes Marian Hossa, Daniel Sedin, Henrik Sedin, Patrik Elias, Shane Doan and Jarome Iginla. All these players are among the top 100 all-time scorers, with Iginla highest on the list at 37th. All are at least 35 years old.

It is impossible to determine a player’s total career earnings while they still have years to play, but I can make reasonable estimates. It is safe to say the end is in sight for all these players and that any new contracts are likely to be less than their current ones. I’ve used CapFriendly to calculate career earnings to date, then added the earnings from current contracts that cover future seasons. Added to that, I’ve estimated additional earnings for the players who may play beyond their current deals. I’ve estimated each player retires at 40 or the expiry of their current deal, whichever is later.

 

Estimated career earnings for Patrick Marleau and his peers
Estimated career earnings for Patrick Marleau and his peers

Based on these estimates, Marleau’s career compensation is inline with his peers.

I should also note two other peer group players not on the chart: Brad Richards (101st all-time in points) and Vincent Lecavalier (94th). These two made the more money than anyone in the chart, largely because of disastrous contracts that ended in buyouts. Their buyouts alone add up to over $50 million.

In the aggregate, Marleau has been fairly paid. There is no compelling long-term evidence of either a hometown discount or major overpayment.

The D Grade

Marleau’s most recent contract was signed concurrently with Joe Thornton signing his contract. Each player made sure their deal was contingent on the other signing. The two most important players in Sharks franchise history wanted to continue to play together. The two contracts, signed on the same day, were identical in length and nearly identical in salary. They now represent polar opposites in terms of value.

While Thornton’s contract merits an ‘A’ grade, Marleau’s contract provides the Sharks a poor return for the money. The no movement clause makes it more challenging for the Sharks to find a way out. On the upside, the contract may offer a benefit during an expansion draft and fortunately, it runs for just one more season. At a more reasonable price, the D grade would improve. Perhaps that happens in Marleau’s next deal, whether in San Jose or elsewhere.

Zeke’s Notes

Links to the first two parts of the series are here: Part 1 has the grades on all the Sharks contracts while part 2 takes an in-depth look at three of the more interesting contracts.

Several Sharks are in the process of setting career marks for points. Brent Burns and Marc-Edouard Vlasic have both set new career highs for points. Justin Braun has tied his career best and Joe Pavelski has a chance to set a new career high as well. In terms of plus/minus, Pavelski is on his way to a career best, while Joe Thornton has an outside shot at his career best mark.