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Monday’s blog: the NHL does not work on Econ 101 rules

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Offer sheets, contracts, and market rates.

2021 NHL Stanley Cup Final - Game Three Photo by Bruce Bennett/Getty Images

Monday’s blog is a little bit about contracts and the imaginary NHL player market that many fans and media seem to believe in.

A few days ago, an economist complained about analysis that tries to apply simple Econ 101 rules to the real world, leaving out all sorts of context like trade barriers and regulatory control of markets. And I thought, oh, buddy, you should hear how the NHL player market is discussed.

First of all: is there a market? Mike Babcock used to use a line that he might have stolen from Lou Lamoriello about how you can’t just go to the tree in the back yard and pick a defenseman like you do an apple. This perennial Leafs issue reared it’s tired old head again this summer when the Leafs protected Justin Holl in the expansion draft instead of the player(s) that a one-to-one player analysis says are better. None of them were defencemen.

Using one-to-one comparisons of on-ice ability is built on a foundational belief, usually unarticulated, that players exist as market commodities in a simple economy where supply and demand don’t even hold sway, and the valuation of a player is entirely made on abstract and objective measures of quality. That’s actually not Econ 101, it’s much more naive than that.

Even if you add in supply and demand considerations to this mental model of player value, it’s usually done in a way that ignores all other context like positional differences, as well as the NHL’s analogues of things like trade barriers and regulation — the CBA, waiver rules, cap space, RFA status etc.

There are often good reasons beyond the cap math for a lot of contract choices teams make. It’s also not something the GM gets to decide in a vacuum. Everything about the language people use to talk about contract negotiation leads to a false view of the reality of the process. GMs are said to “give” contracts to players. The player demands term or AAV, like a child — petulantly one assumes — and the GM either manfully resists or caves in and is weak. It’s a weird patriarchal fantasy that’s more appropriate for a 50s TV show where Johnny White is begging his dad Bob Middleclass for a car on his 16th birthday.

Multiply this by 1,000 for discussions of offer sheets, which take the form of a forced trade if they aren’t matched, and a nasty contract negotiation if they are. There’s a lot of drama and popcorn munching around the periphery, particularly when the Carolina Hurricanes are putting on a PR show in the way only they know how to do. (You’ve already forgotten about Tony DeAngelo, haven’t you?)

But beyond the sideshow, the real game is an attempt to force the Canadiens to trade a player (now) to a team that tried and failed to get him the traditional way.

On the 31 Thoughts Podcast, Elliotte Friedman says he believes in the likelihood that a deal exists between Jesperi Kotkaniemi and the Hurricanes for an extension that will be for a lower AAV than the approximately $6 million offer sheet.

This is very unusual because it would mean that Kotkaniemi is willing right now to take $6 million, have that same amount be the Qualifying Offer when this deal expires, and instead of insisting on that as his 2022-2023 contract by just accepting his QO, he’s willing to take less for some type of term. Or at least he is from the Hurricanes. Kotkaniemi was going to struggle to get half that much from the Canadiens.

The offer sheet had to be big enough to make the Canadiens balk at it. Which is part of the Hurricanes’ revenge. They want Marc Bergevin to see that his attempt on Aho was tactically flawed, and essentially got their contract negotiation done for them effort-free.

If the Canadiens choose to match this offer sheet, they cannot trade Kotkaniemi for one year, so that puts them in a position of potentially increased conflict with a player they are stuck with who was ritualistically scratched last season, and who may feel like the team can’t decide if they want him or not.

On the other hand, the Canadiens are dangerously shallow at centre.

This was Friedman’s thinking as well, and if the Habs let Kotkaniemi walk for a first and a third — likely a very bad first — that they can flip that for Dvorak, with some extras to sweeten the pot, this whole deal may end up being exactly the trade Bergevin should have agreed to last week. Which is kind of what the Hurricanes are saying, publicly, mockingly and with their Twitter home page redone:

Meanwhile, Kotkaniemi will be “overpaid” for one year, with an extension due that will reset the total AAV on this year plus a future set of years to a reasonable amount. With this next season’s escrow set at 14-18% and a certainty that it will be completely consumed by the existing and future escrow debt, Kotkaniemi is not prospering as much by this heavily front-loaded arrangement as it seems on paper.

For him, and for the Hurricanes, the point isn’t just the money, the money is a tool to achieve what it seems they both want — Jesperi Kotkaniemi on the Hurricanes for several years to come.

There seems to be an assumption that the Canadiens will match, since that’s what almost always happens. But this isn’t the typical timid offer sheet like Bergevin tried, banking (wrongly) on the signing bonuses his wealthy team could pay proving too much for the Hurricanes. This deal is a genuinely outrageous overpay that will inevitably lead to a trade for Kotkaniemi next fall when that QO has come due if they match now. So why not just concede right now?

Whatever happens, no one is claiming Kotkaniemi is worth this contract, but the contract might be worth getting Kotkaniemi locked up for term if he turns out to be what the Hurricanes think he is. My question is this, though: Can Bergevin see beyond the posturing and mockery and do the smart thing for his team, or will he want to double down on the spite? He’s had an interesting summer where he’s pissed off almost everyone in hockey. Predicting his next move based on logic might not be the way to go.


There was some small bits of news on the weekend. The Marlies signed a very good undrafted NCAA goalie (correction: he was drafted by the Red Wings, but their rights expired to him.):

He seems destined for the Growlers, at least at first. They are set to sign some players of their own this week, and of course we have the Traverse City event coming up in September where the Leafs are inviting a host of other players like Petruzzelli.

Latvia, featuring Kristians Rubins on the top pair, won their qualifying tournament and are Olympics bound. They are joined by Denmark and Slovakia as the other three qualifiers. The rest of the teams are: Canada, USA, Russia, Czechia, Finland, Sweden, Germany, Switzerland, and the host China.

Word from multiple sources says the NHL is about to reach a deal with the IOC and IIHF allowing NHL players to go to the Olympics. One thing no one asks is if AHLers like Rubins will be released, but I would expect he will be allowed to go. The Marlies are swimming in extra defencemen once again.

Women’s Worlds continues today with USA vs Finland in the first semifinal at 3 p.m. Toronto time, and Canada taking on the surprising Swiss at 7 p.m.

Have a great Monday, everyone!