Thursday, October 7, 2010

RFA Years at the end of a contract

Just to further along my post about saving contracts.

One of the arguments against rolling the ELC of Hall & Paajarvi over is that they could be more expensive later on if they start out older.

I get the argument, because instead of being 21 when their deal is up they are 23. And considering I've used the argument that players get better as they get older I can agree with this.

That being said, there is a flipside to it, and that's what do you do with the 2nd contract?

Fortunately, we don't have to look too far to see our own Sam Gagner.

First of all though, I think I need to clarify my assumptions here. My concerns are based on a best case scenario (which involves the 3 kids all matching expectations). My comparables for all 3 contract wise are Hall = Kane, Paajarvi = Getzlaf and Eberle = Perry. The styles may not matchup, but I think counting numbers might. Based on that I have all 3 making $6mil/season (Kane is just over 6 and Perry and Getzlaf are under but signed when the cap was lower).

I am assuming that by 21 years old Hall is about an 80 point player. I'm assuming that by 22 Paajarvi is a 70-80 point player and that by 23 Eberles is a 30 goal scorer. I think these represent what we "expect" from these guys at the end of their first contract. I won't be discussing Eberles because his clock has started anyways.

If Hall is an 80 point player by 21 and his ELC starts at 18, how much money do you save on a long term deal vs him being a 90 point player at 23 (starting his ELC at 20)? I can't see it being much, simply because both the team and his agent are probably factoring in that progression to be that player at 23.

If Paajarvi is a 70 point player at 22 and an 80 point player at 23, how much do you save on his deal? Again I don't think there is enough to save on a cap hit.

So that's if everything goes well.

What if Hall and Paajarvi need 3 years to adjust to the NHL but breakout in their 4th year?

It's a very reasonable question, but I think one that favours holding them off. This is where Sam Gagner comes into play. He has completed 3 years in the league and has made progress but hasn't broken out yet so the team has agreed to a 2 year deal with him. Had the Oilers held Gagner out, last year would have been his rookie year and we'll assume he was still about a 45 point player. His ELC had a cap hit of $1.625 mil/season. His new contract pays him 2.25 mil/season.

Rookie Age10-1111-12RFA Left

In both cases, Sam Gagner would be an RFA after 2 years. The biggest difference is the Oilers only have 2 RFA years left to negotiate a long term deal, as opposed to 4 if they started him in the NHL at 20.

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