Friday, September 4, 2009

Thought Experiment With Contracts

Let's posit two players: Evgeni Peaklate and Wendel NHLReady, about to be drafted by an NHL team. Wendel NHLReady is a good old Canadian boy who's got all around solid skills, but his upside is limited. Evgeni Peaklate is a flashy Russian who needs some work on defense and positioning but has tremendously high upside. With the NHL UFA age now at 27, and 25 for players like Jay Bouwmeester who had 7 years of service time, should NHL GMs be thinking about players in terms of Peaklate and NHLReady - i.e. should they consider something other than 'best player available?'

Let's say NHLReady needs 2 years in junior, and Peaklate needs 2 years in junior/Russian league/wherever, as well as 2 years in the minor leagues. Let's also assume that both players are paid exactly what they are worth, except for their entry level contract. It therefore follows that unless NHLReady is providing minimal value during the three years he spends in the NHL under his entry level deal, or Peaklate incredible value for that one season, that NHLReady will provide more value for his team over the course of his contracts.

Obviously things don't work this way. The point we're trying to illustrate with this silly example is that with our earlier assertion that UFA players get paid 50% more than what they get paid as RFAs on average, teams should think harder about players with limited upside but more certain NHL futures who will be ready for the NHL quicker than counterparts with serious flaws in their game that need correcting. Luckily, junior hockey teams around the world are getting better at developing players who are ready for the NHL - 2008-09 saw 12 players picked in the 2008 draft make their NHL debut.

Next post: The change between the first entry-level contract and first RFA contract a player enters into. We estimate the average change will be between 125% and 175%.


  1. Triumph, I'm trying to figure out what this has to do with Kessel.

  2. i did say it was kind of a terribly written point.

    The point with Wendel NHLReady and Evgeni Peaklate is that since Wendel NHLReady is on his entry level contract for all 3 years he's in the NHL, he is probably providing significant value to his team over what a UFA would provide - UFA players who sign for what 1st round pick make are guys like colton orr and tom kostopolous. the point is that if you don't get a player like NHLReady, if you get a guy that needs significant minor league seasoning that eats up his entry level contract, you're not likely to get significant savings. while players still receive more on the open market then they do as RFAs (probably around 50% more), the most significant savings come during that entry level period.

  3. god blogspot commenting is the nut worst too

    i think i'll write another post about it real soon