Nazem Kadri and the importance of a team-friendly second contract

The Nazem Kadri contract dispute turned ugly over the weekend, with Sportsnet’s David Alter reporting information about Kadri’s contract demands that was made clear came from a team source after Nazem Kadri fired back on Twitter.

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Perhaps the best thing Dave Nonis has done this offseason is not cave immediately to Kadri’s demands, or cave to media pressure that has anointed Kadri as the team’s next homegrown superstar. I’m sure there’s a pocket of nostalgic Leaf fans that see Kadri and David Clarkson as an updated version of Dougie Gilmour and Wendel Clark, 20 years in the future, and that’s important because it’s been so long since the team has had a superstar from the province of Ontario. Sometimes as a country we can get absurdly protectionist, and Leaf fans and media are no different from fans and media in Montreal, an environment that demands French Canadien influence on the team, or Vancouver, an environment that demands Western influence on the team.

Nonis is under a lot of pressure to build the Leafs in the image of Randy Carlyle, and he’s done a good job of getting the players that Carlyle likes under contracts that work under the salary cap. In some twisted way, he’s earned that five-year extension given to him earlier in the offseason, although I disagree with him fundamentally on the important aspects of roster composition in hockey.

Like Burke, Nonis doesn’t like the idea of players cashing in on the second contract. There’s a flaw in the Collective Bargaining Agreement, in that players reach their first age of unrestricted free agency between the ages of 25 and 27, or during the average player’s offensive peak. This creates an inefficiency since players that can be locked up for their entire primes are those that haven’t earned those contracts just yet, whereas players signed to long contracts out of unrestricted free agency tend to disappoint. There were a lot of people upset that the Maple Leafs didn’t land Brad Richards on July 1, 2011, but Richards has since become a polarizing player in New York with a high salary cap hit and was a healthy scratch in the postseason, and may be bought out if he’s unproductive in 2014.

There’s some old school sentiment that still exists in hockey that players need to earn their paycheques, whereas in baseball—and in some rare cases in hockey—players are being paid for prospective performance, for the money they are projected to earn over the course of the deal. That, to me, makes the most sense.

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Former hockey writer and friend of the Nations Network Jesse Spector, who covers baseball for the Sporting News these days, got a real interesting quote from Theo Epstein earlier in August:

“You just can’t find prime age or pre-prime age players anymore,” Cubs president of baseball operations Theo Epstein said. “They’re not available in free agency. Players are getting tied up in long-term deals and most players that are getting to free agency now are on the wrong side of 30. If you have a player who’s mid-20s available and he’s not subject to any type of restriction, there’s 30 teams interested in that player, and it increases his market (value).”

When you’re building talent in a system, half of the job is finding the talent and the other half comes from locking it down. The most efficient way to do that in hockey is to draft well, and take full advantage of the NHL’s rules regarding restricted free agency. A player drafted at age 17 can have his NHL contract slide for two years if he’s returned to his junior club, meaning the team doesn’t have to start playing him at the pro level until he’s 20. At 20, his entry-level deal kicks in for three years at a very low cost. At 23, teams can extend the player until he’s 31 and buy out four of his unrestricted years, which is more expensive, but you get the player for most of his prime, and you can trade off those more expensive years over the age of 27 for cheaper years when the player is 25, 26 and 27, when the player is most productive.

The players to do that with are the ones that may not have produced yet at the NHL-level but show signs of breaking out. I disagree so hard with this post at Habs Eyes on the Prize that defended the Canadiens signing P.K. Subban to a two-year bridge contract. I see no way that locking down Subban last summer would be more expensive than having to negotiate a long-term extension after he won a Norris Trophy in 2013 and God Knows What Else in the 2013-2014 season (I think Andrew Berkshire was right in what Subban will cost against the cap this next summer, around $8-million, but I feel like the dollar figures offered from Subban’s camp last summer are indicative of a player’s initial offer and aren’t what Subban would have signed for.) The move works in the short term, but a deal structured like Roman Josi’s works much better in the long term, where once a player has entered his prime he’s playing at a fraction of the cost since the deal is signed when a player isn’t as valuable.

(Hilariously, Damien Cox brought up Subban in his column about Kadri’s potential bridge deal, suggesting that the Leafs would have an even more bitter battle after their long negotiation this summer in the same column he wrote that the Habs and Subban are going to get along just fine, despite Subban holding out until after last season had started.)

Let’s talk about Nazem Kadri’s value. He was close a point-a-game in his first full NHL season, although the season was only 48 games. His shooting percentage was 16.8%, well above NHL average, and his on-ice shooting percentage was a league-high 14.77%. Those seems like points in Kadri’s favour, as Alter argues, but I’m a little more wary about shooting percentage than most commentators. If you look at every player since 2007-2008 that has an on-ice shooting percentage (that’s the team’s combined shooting rate at even strength when a player is on the ice) of higher than 12%, you’ll find that of the 47 player seasons, just four players have had repeat performances, and only Ilya Kovalchuk has repeated the feat in consecutive 82-game seasons.

One of those seasons is Jordan Eberle, and while I hate to use one solitary data point in an effort to make a case, I will here because it’s relevant. After a 2012 season where Eberle scored 76 points in 78 games with a 12.84% on-ice shooting percentage, he was signed to a six-year extension worth $36-million. Had he played the final year of his deal, where is on-ice shooting percentage fell to 8.48%—as some people expected, he scored 37 points over 48 games, not bad, but not worth the $6-million—his second contract probably would have been cheaper. It’s important to read warning signs when analyzing player point performances in small samples like the first 36 games of the season when Kadri scored 39 points.

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The dispute between the Leafs and Kadri is simple:

Alter reported that Kadri’s camp is asking for a long term deal worth $5 million per – after originally naming an asking price of $6 million/year – while the Leafs front office is offering a 2-year bridge deal worth around 3 million AAV, which is, give or take $500,000, what most of us have been expecting to eventually become of this protracted negotiation.

It’s not tough to understand why Nonis would want to give Kadri a bridge contract, which are one or two years in length and get a player to arbitration-eligible status. Those two years will help the Leafs determine Kadri’s full value to a team. Kadri should be more than willing to cash in now because his value will probably never be higher. He’s young, all the potential in the world and is coming off a huge season. The agency that represents him, Siskinds Sports Management, have no other high-profile clients so negotiating a big second deal for Kadri puts them on the map as an agency. That doesn’t fit with what makes sense for the Maple Leafs as we look towards the future, unfortunately.

Nonis needs to stand firm here. A one- or two-year deal will surely result in Kadri’s points-per-game average dropping, meaning he’ll be cheaper to lock up long term at the end of the deal. Like Epstein notes, there’s a shortage of players available on the open market, which means teams need to be smart with the players that they do have. That includes avoiding the long term contract for players in potentially hazardous situations, such as an unrestricted free agent or young player coming off a huge season wherein he established himself as a fan favourite.

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  • Ok, there is a misconception about why the PK Subban deal is a good one. Yes they could have had PK at 5 years, 5 million per (according to various reports), but then this year (2013/14) they would have been screwed when the salary cap dropped 10 millions dollars

    Next year the Habs will extend PK, and it will be around 7+ million per season for long term, but the cap is expected to go up 10 million or more, so this bridge deal saves them millions against the cap this year when they need it most, and then they are golden.

    Montreal is a rich club, the money is not an issue. Cap space, however, is. Bergevin is willing to pay more money in the long term in order to have better cap flexibility now. Simple.

    It’s not about saving real dollars, it’s about managing contracts in relation to the cap.

  • Does PK Subban win the Norris if he signs a 5 or 6 year deal? Something tells me that PK came out of the gate with something to prove. I understand these are professionals but complacincy is a scary thing.
    In my opinion a bridge type deal would be exactly what Kadri needs. So far in his young career he has proven to respond when questioned.
    One more time.