Kids today, they just live in the present and only think of themselves. That’s how that song goes, right? Well Auston Matthews is not a kid even if he is only 21.
Do you know what the average age at which a hockey player leaves the NHL, never to play there again? Twenty-five. That average is driven by the ELC rules and teams employing sunk cost fallacies in their decision making, but it’s also driven by the high risk of injury and the simple fact that NHL hockey is really damn hard and some guys can only manage it for a few years at their absolute physical peak.
Auston Matthews isn’t average, and he’s not very likely to only play for four more years, but the reality of the very short period of time he has to cash out on the hockey-playing machine he has been making of himself his entire life should weigh on his mind when he’s signing a contract.
He’s planning to play for the Toronto Maple Leafs until he’s Patrick Marleau’s age. That’s how every elite player his age thinks.
So why did he sign this short-term, instant-gratification deal for what a great many people think is too much money? That seems counter intuitive if he’s mature for his age and forward thinking.
It’s not a hometown discount, that loathsome thing that is expected of the “humble” hockey playing stooge who takes less money so his team can overpay the depth, but it is a team-friendly deal.
My early guesses on how this contract was going to go were dead on on the AAV but off on term. I had absolutely expected a token more than John Tavares’s $11 million even, but I’d thought that it would be for eight years. I was thinking too much about status and not enough about who held the power, who called the tune.
I think status really, really matters to hockey players. I don’t think money does. This is where analysis of their motives based around greed (or tax rates) really falls apart for me. Players don’t necessarily care about an extra million or in this case .634 of one. They care about where they sit on a list of their peers because they’ve been spending their entire lives looking at themselves on ranked lists and striving to be the top of it.
I hold myself to a higher standard, but in the end you're measured by championships. That's the ultimate goal. If I'm making $1 or $11 million, I'll be the same person every day. (But) now I'm fortunate to get paid a lot of money for it."— Lance Hornby (@sunhornby) February 5, 2019
Auston Matthews has one peer on the Toronto Maple Leafs, just barely, and only for the moment, and that’s John Tavares. He has very few in the NHL as a whole, and he wants to be the best of all of them. I don’t think he’s going to make it to the top, but he’ll be trying from now until the day he hangs the skates up. So he had to be paid this AAV. He had to be in between John Tavares and Connor McDavid, the man he’s standing beside for now, and the man he’s racing into the future hoping, somehow, to best.
But the other status symbol is the 8-year deal. I’d allowed myself to be lulled into old-fashioned thinking because a lot of star players had been going for the security and status of the longest allowed term. I was expecting Matthews to go along with that because while conventional wisdom says fitting in two contracts into your peak years gets you more money, there is real risk that you might not be in a perfect bargaining position when that second deal comes along. The idea, then, is that the long-term deal offers security and is a hedge against risk.
It is hedging that Matthews is doing. But he’s hedging against inflation. Bob McKenzie laid this out:
From Matthews perspective, he had zero problem going for an eight-year deal but in order to hedge against a rising salary cap, he would have had to get a number so big as to cripple the Leafs’ ability to keep their core together. He didn’t want that.— Bob McKenzie (@TSNBobMcKenzie) February 5, 2019
Let’s look at an example of how this works when the party on one side of a deal holds all the leverage, and you’re just a tiny spec of an ant to them, begging for their favour — residential mortgage rates. Here’s some from a bank chosen totally at random:
You will note how the rate goes way up as the term gets longer. The bank is hedging against inflation in the future (and building in a nice big comfy cushion for themselves) so you can have the security of knowing you won’t be harmed by a bigger rise in rates than the oversized amount you’re paying now.
We all understand this when it comes to NHL contracts in some way, in that when the term gets longer, deeper into the future, the player expects to be paid a bigger AAV to hedge against a future where his contract amount ends up looking comically small and no longer confers the status he craves.
Where I made my mistake was in thinking that Matthews was the ant and the Leafs were the bank. The fabled 8 by 11.5 that everyone had sold themselves on as fair only works if the team holds the leverage, and they normally do. But Matthews isn’t Nazem Kadri playing on a bad team and only hoping for a future that looks better. He isn’t William Nylander, who you can try to frighten with a trade. He isn’t going to be given an offer sheet, and the Leafs had no way to force him into a deal back in the summer.
Auston Matthews was the man Mike Babcock tanked for! He’s the reason they added John Tavares. He’s the reason signing Nylander was so important. He’s why they made the deal for Jake Muzzin. He is the team. You can’t trade the bum! Because without Matthews, what the hell is Tavares there for? You can’t now tell him to hold up for five years while the Leafs hope whatever firsts they get for Matthews turn into another Matthews someday.
What Matthews thinks is that two things are going to happen: The cap is going to go up, and keep going up, possibly by large amounts, and that he is going to be a much better player very, very soon, and his value as a player will continue to go up and keep going up.
I know we’re all used to looking at comparables from the past, but one thing to consider is that not that many players ever start in the NHL full time at 18 or 19. ELCs slide. Sometimes for years, and most of the long term deals that give us a comfortable idea about reasonable proportion of the cap are not signed by guys who are nowhere near their peak.
In a few months, when July 1 comes around, we’ll hear the disdainful opinion on UFA contracts that a team should pay for future worth, not past performance. And that’s good advice! It’s also really hard to swallow when the future worth of the player is Matthews-sized. But if we expect Kyle Dubas to follow that good advice, then Kyle Dubas can’t expect it to be a secret from the player agents out there. One way or another Matthews wants to be paid for his future worth.
I was wrong on what Matthews thinks his future value is, both in terms of the inflation of his contributions and the inflation of the cap. But we all liked that 11.5 number because it’s comfortable, and we can imagine next season’s cap crunch (which, be honest, is really all anyone is thinking about right now) having a good outcome that doesn’t involve losing a key player if Matthews is paid only 11.5. We got really attached to that number.
There’s justifications for it as his value overall, over the entire term of the next eight years, and not just the next five. The usual line is between Jack Eichel and McDavid. But those players made decisions when they did for their own reasons, and Matthews isn’t required to follow their path. He thinks 13.5 is more like it. And 13.5 would be much less comfortable next season and would cost a top nine player.
Matthews most definitely did not take a hometown discount. But he did lop enough off the term and sold only one year of UFA, to keep the AAV as low as he would ever be willing to sign for so the Leafs can sort out next year’s cap.
One thing I’m very sure of, he was not signing at any term for less than Tavares’s AAV.
There is no reason to think that Auston Matthews is going to get cheaper. And that’s the root of the fear that in five years either he’ll leave for somewhere with more ability to pay or he’ll re-sign for a really big amount that is terrifying to consider. It’s also why waiting for the coming summer to do the deal carries real risk his price could go up post-playoffs.
The short-term deal is what this deal had to be in order to not be a problem now. His gift to the Leafs is six cup runs with a corps of elite players paid what will, if Matthews has played this right, look like nothing special when his next deal is negotiated.
To go back to the mortgage analogy here, Matthews is calling the shots, not Dubas. We might have thought the AAV on a long-term deal should be some nice comfortable number that makes us happy and feels secure. But the Leafs can’t afford a secure, eight years of Matthews at a locked down rate. They had to take their chances with all that coming inflation, and take the reduced term deal. Inflation works for them too, remember. If the cap and Matthews’ value go up like he’s betting on, we might be really damn happy to haul him out of a fountain in the summer of 2024 long enough to sign an extension that makes this one look comically small.
You see, where I had this wrong was that I thought Matthews was the sort of player who would buy security, that he was the little spec of nothing going begging to the big bank. But he’s not. He is the bank, in fact he is the reason Scotiabank paid what it did to splash its name on the side of the arena Auston Matthews plays in. The Leafs can’t afford to lock him down long-term, not right now.
I really understand why fans wanted the Leafs to somehow get the security and comfort of a certain future with Matthews. But I also know that the Leafs had no way to make him value himself at anything less. He wouldn’t be who he is if he did. This day was coming from the moment the lottery balls fell favourably and our joy ran riot. He was always going to get paid, it was just a matter of when.
The immediate future is exactly the same as it would have been if he’d offered to sell himself cheap. And five years is a long time from now.