Recently (today), I read a blog by Edmonton Oilers Beat-writer, Jonathan Willis, where he detailed the potential cap restrictions that the Oilers will face after signing Taylor Hall, Jordan Eberle, Ladislav Smid, and Magnus Paarvi. Blog post… HERE!
I guess Jonathan didn’t read my post about signing Taylor Hall and Jordan Eberle… HERE!
There are some great things that Jonathan brings up, but none more important than the fundamental philosophy of planning and budgeting that the Oilers management needs to be effective for years to come. While fans are skeptical of management, no other organization has the same young talent at the NHL level, so it’s a unique opportunity that needs to be operated with precision.
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As described in the title, and similar to Jonathan’s blog’s I’m going to look at the contract moves that the Oilers should make in the 2012-2013 season. I will look at how the Oilers can not only sign their youth movement, but provide relevant comparable performance based contract structures (i.e. the comprehensive aspect of this plan).
Currently the cap for 2012-2013 sits at $56.43 million, approx. $13.77 million under the cap ceiling. The only real outstanding contracts are Sam Gagner and Theo Peckham.
- Sam Gagner / Theo Peckham
When looking at the appropriate contract rate, there are several metrics that you can use to estimate contract cap hits. For forwards, I like one of two methods, both of which typically come to a similar answer:
Method 1 – 15 points per $1 million in cap hit
Method 2 – $1 million per 10 goals, $1 million per 20 assists
Using these metrics, Sam Gagner falls in the $3-3.25 million range historically, BUT the question needs to be asked, “Do you expect him to exceed these point totals going forward?” — If you believe that the risk is too high, or that there won’t be an increasing point production, stick with method 1 or 2. If you believe that it’s “more likely than not” that there will be an increase in point production, you can calculate the average points over the future periods and apply the same tests to get the “high” range of contract values. In Sam Gagner’s case, I expect him to increase production to about 20 goals, 40 assists; thus $4 million per. If he’s signed to a three-year deal (which isn’t out of the question), we would likely see a $3 million / $3.5 million / $4 million salary breakup.
As for Theo Peckham, and defensemen in general, comparisons are more difficult because it implies style. Good news for you, Theo isn’t a part of my long-term strategy, so I’ll pay him the Qualifying Offer, (“QO”) and have him be my #7 defenseman this year. Jonathan Willis has this at ~$1 million.
- Jordan Eberle / Taylor Hall
For argument’s sake, both Jordan and Taylor are going to be strong players for the next decade. The popular belief is to sign Jordan and Taylor to similar contracts, like they did in Chicago for Jonathan Toews and Patrick Kane ($6.3 mil per). However, considering point production, pedigree, and injury history, I’m not certain Taylor and Jordan are comparable to Jonathan and Patrick – heck they won a cup in Chicago.
That being said, looking at the methods of defining contracts described above (and described in my previous blog), Jordan and Taylor are historically in the $5 – $5.5 range. Their future production though, is where this becomes tricky. Jordan, by many accounts is expected to have similar point production (which would be considered turning down the nobs compared to last year). Taylor, on the other hand, by the same accounts has underachieved slightly in his first two seasons.
For both of these guys though, I want to sign them to 5 years. I expect Taylor to be in the 90-100 points a season range (40G / 60A), and Jordan to maintain in the 80-90 range (35G / 55A). That being said, the salary range on Taylor would be between $5 million and $7 million, and Jordan would be between $5.5 million and $6.5 million. Over a 5-year period, if we would see:
Taylor – $5 million / $5.5 million / $6 million / $6.5 million / $7 million
Jordan – $5.5 million / $5.75 million / $6 million / $6.25 million / $6.5 million
Under both of these contracts, Jordan and Taylor have the same cap-hit ($6 million), but have different expectations: One is to maintain ppg type production, other is to begin to settle into an elite top 10 forward in the NHL. In a previous post, I had talked about 7-years @ $7 million, and should Jordan/Taylor meet their goals over the next 5 years, their next contract will be in the $7-$8 million cap-hit range over a much longer period of time.
Additionally, by putting these contracts in front of these guys now, with a medium-term, I believe that it not only shows commitment to their production and the investment in their future, it also hedges the possibility of a breakout season by Taylor Hall this season, and a stable season by Jordan Eberle. By comparison Patrick Kane went from point-per-game production to better than point per game production in his third season.
- Ladislav Smid
Similar to Jordan and Taylor, I also think it’s important for management to extend Ladislav Smid in a similar fashion. He’s poised to make progress this season and as the kids get older, he’ll likely also see an increase in +/- over this season in comparison to last season. As Jonathan Willis pointed out, Marc-Edwourd Vlasic was recently signed to an extension, and he believes this is a comparable, but Ladislav might not get the same money because the Oilers haven’t really been winners.
That being said, it can be reasonably assumed that Ladislav will require a pay increase (makes $2.25 million now), and will require a medium contract term (4 years?). I have him pegged for somewhere in the realm of $3.25 million for his historical work and $4.25 million on future production – $3.25 million / $3.5 million / $3.75 million / $4.25 million. $3.63 million cap hit.
Note: these contracts wouldn’t hit the Oilers until the next season.
- Ryan Whitney / Magnus Paarvi / Anton Lander / etc.
Some people have suggested addressing other youth contracts this season, or extending veterans due-up next season, and I’m playing this cautiously. I don’t see Ryan Whitney in my long-term future (as an arm-chair GM), and I want Magnus to see the contracts that Taylor / Jordan got as incentives to step up his game.
At the end of the season, I see the cap hit coming in at the $61 million range – maybe less, with $1.5 million coming off the books for Sheldon Souray, $3.75 million for Nikolai Khabibulin, $4 million for Ryan Whitney, $1.5 million for Ryan Jones, $1.5 million for Andy Sutton, and a handful of other lower level contracts, putting us at a ~$56.22 million starting point, $13.98 million in cap space.
There are RFAs in MPS, Hartikainen, Tuebert, etc. and possibly Hall, and Eberle.
Additionally, 2013-2014, we will have RNH, and Justin Schultz to sign as well – the fun never stops.
I respect Jonathan Willis, and his assessment, I don’t agree with his range of $6-$7.5 million cap hit for Taylor / Jordan when John Tavares just signed a 6-year $33 million deal. Additionally, I feel like he’s giving a couple guys too much slack (such as Ryan Whitney). Overall though, it was a pretty solid outlook – definitely could have gone in more detail though.
2013-2014 will be posted soon…