Do You Need An Accounting Degree Just To Be A Hockey Fan?

Seriously did you think there was going to be this much math involved in being a hockey fan?  We used to be mostly oblivious to the business side of Hockey. We used to cheer the moment a GM announced a new player was coming to our local team.  Not anymore.

Now, people will only make a judgment on a player after we hear the salary cap numbers.  Even casual fans are going to places like CapGeek to get an intimate understanding of each players cap hit and their teams available”Payroll Room” (Cap space).

The Hawks have the largest “core” number of players under contract.  They have more large contracts than any other NHL team, even before they added Sharp’s new contract to the mix. So what does it mean to add another big contract and can the Hawks really afford it?

The “Domino Effect” of large contracts

Right now the salary cap is around 64.3 million and there are a maximum of 23 players on the roster.  This means the average salary is a little more then 2.75M.  With a hard salary cap it is generally understood that any larger then average contract needs to be offset with a smaller then average one.

The issue is when the salary of a player exceeds twice the average or around 5.5M.  Now you not only need to have one player with a significantly lower salary you need two.  You have to take a third player’s average contract and use it for two players.  It’s that second domino falling that is the killer from large contracts. So for every two 5.5M or greater contracts you need to have at least three 750K or less players on the team. And sometimes much more.

 

350K here 350K there and pretty soon you are talking real money

Teams in salary cap hell have a lot of 525K players on their team.  That is the minimum salary in the NHL.  Thing is there is generally a significant difference in the level of performance from a player at that 525K level then even a 750K or 875K player.

What you are talking about is the difference between the Fernando Pisani’s of the world and your real prospects.  Also if you wanted a specialty 4th line player like Arron Asham it would cost you in the 775K range.  Basically who would you want, Boynton at 525K or Lepisto at 750K?  So having that little bit extra makes a huge difference on the team.

 

Stealing from the Poor to Pay the Rich

Hockey is not a socialist sport.  The top end players get the big bucks and the low end players get the scraps.  Thing is, how many low end players are there?  Well there are two forwards and one defenseman typically in the press box during games.  Then there is the entire 4th line and the 6th defenseman.  I am going to ignore the backup goalie for now because any savings you might have from him would typically go to the starting goalie.

So with the 3 press box guys and the 4th line there is around 12M in money at play.  Add another 1M from the 6th defenseman and there is around 13M in money you can steal.  That comes out to around 4 “big” contracts.

 

Salary Cap Hell

So what happens when there are too many large contracts?  Basically you have to steal even more money from other slots.  This means you are potentially playing kids in important positions before they are ready or having players step up in class.  When this happens you can’t really take advantage of your “Star Player” because he has to not only perform to his contract but offset the other areas that are hurt by the size of his contract.

Last year the Hawks had severe cap issues and were forced to play a kid like Victor Stalberg in the Hawks top 6. Also Thomas Kopecky needed to step up from the 4th line and play top 6 minutes.  In comparing the Hawks to the Vancouver Canucks you see that Marian Hossa outperformed Mikael Samuelsson.  However, when you look at the impact of Hossa’s contract you see that the Canucks had the better overall play from their top two LW’s and their 2nd line RW equivalents.  So it is no longer just a player for player comparison.  Now their respective cap hits are very much part of the equation.

 

Catch 22

And the impact doesn’t end just there.  Fans complained that Hossa wasn’t utilized enough because he doesn’t have a quality center on the Hawks second line.  The issue is that the Hawks can’t afford a quality second line center because of what they are paying Hossa.  That is the “catch 22″ of large contracts.

And then you have the argument from fans that “Campbell was worth every penny he was paid last year” because of how poorly the Hawks played when Campbell was injured.  The “catch 22″ of course was if you pay Campbell all that money you don’t have any money for replacement players.

In looking at the example with the Canucks,  Campbell made more money then Ehrhoff and Edler combined.  You can make the argument that individually both Ehrhoff and Edler outperformed Campbell but when comparing their combined output it wasn’t even close.  The Canucks got much more value for their two players then the Hawks received for Campbell.  And unlike when Campbell was hurt, when Edler was hurt the Canucks still had Ehrhoff and 800K in extra salary to be able to afford a 1.3M – 6th defenseman instead of a 500K guy like Boynton or Cullimore.

Again big salaries can effect more positions on the team then just the one slot.

 

Salary Cap Global Thermal Nuclear Meltdown

The issue for the Hawks last year was that they were over extended with their large contracts.  Having to play two 500K players in their 5th and 6th d-man positions and having to use John Scott as their 7th defenseman really took its toll on the team.

And it only took two forward injuries for the Hawks to be using minimum salary guys at half their forward and one third of their d-men positions.  A team simply can’t survive a season under those conditions.  So the Hawks need to keep this situation from recurring in future years.

 

God Bless the Weak American Dollar

The way the salary cap is calculated is only understood by Math Professors and Cap Magicians.  The short answer is it is partly based on the conversion rate of the American and Canadian dollar.  The cap rose an extra 2M more then expected because of the weak American dollar.  This is a huge bonus to a team with more then normal amounts of large contracts.

Of course if the American dollar becomes stronger next year, that extra 2M in cap space may disappear.  So with an extra million needed to make it through the year, how much salary cap space do the Hawks really have?

 

Overdosing on large contracts, just where to steal more…

So to review, under normal situations a team can afford 4 large contracts.  Getting a 5th means stealing from a place that might actually hurt.  Getting money for a 6th large contract means it might actually hurt a lot.

We are now at the point where Sharp’s signing becomes interesting.  The Hawks have already stolen all the money they can steal from the “usual suspects.”  Now the pain starts in paying for these two additional contracts. What we have learned is that two large salaries means a minimum of three smaller ones.

So we need hopefully three “cheap” salary slots anywhere in the top 9 forward or top 4 d-man positions.  Brian Bickell signed a 540K for multiple year deal that is a huge bonus for the Hawks.  He is capable of playing a top 9 forward position at least on the Hawks checking line.

Nick Leddy is going to be counted on heavily as a top 4 d-man.  There is no choice, the Hawks need the salary cap saving of playing their prospect right now.

Now when Sharp’s contract goes into effect next year, the Hawks need one more cheap contract.  So players like Marcus Kruger as a second line center or Jeremy Morin as a top 6 LW are going to have to be counted on?   Otherwise, the Hawks will NOT be able to afford both Sharp and Hossa in their top 6.

Most teams only have one expensive top six winger.  Teams usually can’t afford more.  If the team has 5 expensive contracts it is usually the top two centers, one top line winger and the top two defensemen.  The Hawks have 6 high end contracts and that is without one of them being that second line center.  It will  be interesting to see how they “pull that off” for the duration of Sharp’s contract.


Topics: CapGeek, Chicago Blackhawks, Patrick Sharp, Salary Cap

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  • http://BlackhawkUp.com/ ChicagoNativeSon

    “I was told there would be no math.” Chevy Chase disapproves of your article.

    Comparing Hawks salaries and production to Vancouver’s really puts what hurt the Hawks last season in perspective.

    “But the Hawks sucked without Campbell!” Yeah, because not only did Boynton and brand shiny new Leddy move up to take his place,but guys like Cullimore and Scott then had to also fill Boynton’s spot when Leddy (temporarily) went back down to Rockford.

    Great read.

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  • K_Dog

    Another extremely informative piece in another subject I’d like to be more knowledgeable in. Well done, DaleHalas.

  • DaleHalas

    @K_Dog Thanks dog, when John took over this site, that was one of his expressed goals. To try and write articles that were a little more in depth and a little more informative then what you normally read.

    The MSM guys are a little more restricted because they have to talk to everyone even the “new” fan. The bloggers don’t have that issue and we can talk more to the hardcore (like you) guys and gals.

  • cliffkoroll

    Well done. Check my math, but I think one player at $5.5 implies two (not three) at $750K.

    Another trick to give you breathing room is a stedy stream of young prospects.

  • http://BlackhawkUp.com/ ChicagoNativeSon

    @cliffkoroll Neal wrote ” So for every TWO 5.5M or greater contracts you need to have at least three 750K or less players on the team.”

    $11,000,000 + $2,250,000 / 5 players = $2.65M avg per player

    I had to read that twice before I caught it too.

  • DaleHalas

    @cliffkoroll Hey Cliff, I think I said “So for every two 5.5M or greater contracts you need to have at least three 750K or less players on the team.” I was using two big contracts needing at minimum three little one. So adding Sharp to Hossa’s existing contract needs three little ones coming from the prospects.