I’ve been quiet so far on the Alexander Ovechkin deal but there’s been a lot of good commentary on it – both Mirtle and Tom Benjamin have posts that are well worth a look. Ted Leonsis didn’t really alter his usual rate of Ovechkin related posting – there were about 15 posts in a three day span last week – but his site has a number of interesting posts on the deal that are worth checking out as well. I’m going to comment on one of those and then get into the deal itself. Per Leonsis:
Mainstream media is clueless. NHL teams aren’t worth what Forbes reports; they are worth MUCH, MUCH more. We would have to be idiots to do deals with players that are worth more than the team and we aren’t idiots. I am constantly amazed at how silly this cycle is: someone reports badly; someone comments on the bad reporting; there are now two sources out there; it must be true; so now it is fact.
I suspect that this is the first time, outside of negotiations with potential team buyers, that an NHL executive has said that Forves doesn’t give them enough credit for their financial strength. Something to remember when Bill Daly is poormouthing Forbes’ numbers during the next labour spat – the story of people related to the NHL about the reliability of Forbes numbers seems to change, depending on the story that’s needed.
Anyway, Leonsis also endorsed the CP version of events as being an accurate one. Here are the key parts:
The two sides were nearing completion of a six-year agreement earlier this week before Caps owner Ted Leonsis and GM George McPhee sat down and evaluated the deal. Did they want Ovechkin to become an unrestricted free agent at 27 years old, just at the moment he’s hitting his prime?
“If Alex is coming into his best performance at 27, what will he command in the free-agent market then and what will the salary cap be then?” Leonsis said in an interview with The Canadian Press on Friday, recalling his conversation with McPhee.
“So let’s accept the front part of the offer (six years, $54 million), but before we sign the contract, let’s say, ‘We accept this, this is a good place for us, but let’s negotiate your (unrestricted) free-agent years.”
The Caps examined the unrestricted deals signed last summer, such as the long-term contracts signed by Daniel Briere and Scott Gomez.
“So the question was, would you sign Alex Ovechkin for seven years for $10 million a year six years from now? And the answer is yes,” explained Leonsis. “So that’s how we came to six years at $9 million and seven years at $10 million. That was the thought process.”
Essentially, it’s two contracts wrapped up into one.
When Ovechkin and his parents walked into the Capitals’ offices Thursday, they fully expected to polish off a six-year deal. Then the Caps unveiled the second part of the deal and found a willing partner. Add up six years at $9 million per season and seven years at $10 million per season and you get $124 million.
“How I looked at it is, we have him until he’s 35 years old, we’ll have him through his best statistical years and his statistics are pretty good right now,” said Leonsis. “And who else would you want as the face of your franchise?”
Now, there are some problems that I see with this. By my math, a six year deal would take Ovechkin to through his age 28 season – he’s a late September birth. When the Caps bought his last seven years, what they were buying was his age 29 through age 35 season.
I should say – I don’t buy the argument that this makes sense to avoid the risk of an RFA offer sheet. The Caps were obviously willing to give him anything he wanted. I have a hard time thinking that he was going to pul an offer sheet for more. If he’s not going to do any better as an RFA, why not wait and see if you can cut a deal on price? Presumably, it’s because you think he’s a good bet to be elite 10 years from now. I’m not sure that I believe this.
I wanted to dig into this a bit, so I looked at the careers of players through the age of 35. Obviously, this limits me to players who were born in 1971 and earlier – that’s something to keep in mind. I’ve also broken their careers into five parts: ages 20-22, 23-25, 26-28, 29-31 and 32-35, for reasons that will become obvious as I go through. I’ve limited my focus to post-war players and I’m presenting their stats both raw and adjusted for scoring context and season length. I’m only looking at the careers of the top 28 forwards in terms of scoring between the ages of 20-22. 28 may seem like an odd number but Oilers fans will figure out why I chose it. On to the numbers.
First up: the 20-22 span. These are the seasons on which Washington has to base their analysis of Ovechkin. Historically, he shapes up very well – I’ve pro-rated his numbers for this season and he’s in a virtual tie with Bryan Trottier for the third most points during that stage of a player’s career. Wayne Gretzky is off in a league by hmself, followed by Mario in another league by himself and then Trottier and Ovechkin carve out their own little niche. In my view, Leonsis accurately pegged Ovechkin as an all-time great offensive player through this stage of his career and, assuming that the market puts a fair price on him, paying him as an elite player is a defensible decision. The question is for how long…
I’ve added a column for the last four charts: rank. This is where the players rank in my sample. The sample includes defencemen, whom I’ve cut from this analysis, so keep in mind that their rank would be higher if only forwards were considered. I chose this three year span for a simple reason: if you buy a player out when he’s 25, you’re only on the hook for 1/3 of his salary. By going the 13 year route instead of the 6 year route, the Caps upped the price of getting out from $9MM over six years to about $31.3MM over 14 years. That’s a pretty big hit, depending on what you think inflation is going to do.
Most of the guys who were dominant through age 22 were similarly dominant through age 25 – the ones who fell off were, by and large, the ones who suffered injuries that cost them a bunch of time. Barry Pederson, Pavel Bure, Pierre Larouche and Rob Brown all stand out here. Rob Brown is an absolutely terrible comparable, who doesn’t really belong in my sample; the other three misssed an awful lot of games and suffered some serious injuries during this span.
It starts to get a little blurrier between the ages of 26-28. A lot of guys who were dominant between the ages of 20-22 played relatively full slates of games (246 is the games max under the adjusted heading) without producing enough offence to climb the charts. These aren’t scrubs – these are guys like Bryan Trottier, Dale Hawerchuk and Jeremey Roenick who, while not quite as offensively dominant as Ovechkin, were great players when they were young – they weren’t far off Ovechkin as young guys but they weren’t dominant offensive players by the time they hit this cycle. Rob Brown (not a good comp, I know) was basically out of hockey. Only five of the top ten offensive players between the ages of 20-22 managed to crack the top ten between the ages of 26-28. The risk grows.
I don’t see that what a player does between the ages of 20-22 tells you a hell of a lot about what he’ll do between 32-35. Wayne Gretzky is a freak, obviously. The rest of them are all over the map. Only three of the top 28 at ages 20-22 are still in the top ten between 32-35. You can make the point, I suppose, that for many of them its freak things but nobody can say what freak things that Ovechkin will encounter.
I don’t know that you can draw a lot of conclusions from this other than to say that it’s damned tough to say that just because a guy is a star at 22, it doesn’t mean that he’ll be playing hockey at 32, let alone being amongst the best players of all time in that age group. There are a lot of things that can happen to sap a player’s value in that time. It bears further mention as well that points rates fall off over time – 23-25 was the peak but by the team players hit that 32-35 age group, the scoring rates fall considerably.
Would I have signed Ovechkin to this contract? Well, a lot of it depends on how salaries increase over time but given the slight difference between elite and good and the sheer size of the contract, I don’t think that I would. I’ve said it before but winning in the NHL with a salary cap is an efficiency contest in which one needs to make smart bets. My gut feel, without sinking a ton more time into this, is that the odds of Ovechkin being worth his contract, even allowing for a dimunition in the value of $10MM annually, aren’t enough to make it a smart bet. When it comes to the amount of cash that the Caps have tied up in him, I’d be inclined to make more conservative bets – it’s one thing to sign a couple veteran defencemen to $750K contracts in the hopes that someone still has some gas in the tank; failure won’t sink you. If Ovechkin turns into Pavel Bure or Mike Bossy or just isn’t as elite in the future as he has been in the past – keeping in mind that success at 20-22 is no guarantee of success later on, there are serious problems for the Capitals. I’m not much of a gambler but I recall reading that you never bet more than you can afford to lose. Ted Leonsis can afford to lose a lot more than I can; I question whether the Capitals, as distinct from him, could afford the cap and salary hit if he isn’t the player in the future that he’s been to this point in time.