Zetterberg signs lifetime deal
by James Mirtle on Jan 28, 2009 8:59 AM CST
27 comments
The Red Wings have called a news conference for 2 p.m. today to announce a 12-year, $72-million extension for Henrik Zetterberg.
Wings general manager Ken Holland has had intense talks over the past week with Marc Levine, the agent for Zetterberg, and the sides have reached an agreement that is expected to will keep Zetterberg in Detroit until he’s 40.
Given the terms here, this is obviously going to be one of those heavily front-loaded deals with some goofy final years tacked on the end in order to bring the cap hit down. The term is a bit troubling given you could potentially get stuck with the deal should injury hit, but if Zetterberg retires early, the extra years won't be a problem.
His $6-million cap hit is what matters now and for the near future, and it gives Holland some real flexibility to try and keep either Marian Hossa or Johan Franzen. Including Zetterberg's new deal, the Red Wings have $47-million committed toward next season's payroll, and that's with only seven forwards and one goaltender signed.
At most, they'll have another $10-million to sign another five forwards and another netminder, which makes it unlikely they can afford to keep Hossa's potential $7-million contract without moving out other bodies.
Zetterberg turns 29 this fall, and having him in his prime with a $6-million cap hit the next five or six years is a great deal. He hasn't had the greatest year so far this season, with more duties spread out to players like Hossa, but is a potential Art Ross winner down the line.
UPDATE The final two years of the contract are apparently just $1-million apiece, which lowers the cap hit $1-million a season from the 10-year, $70-million deal they were apparently looking at.
My guess is Gary Bettman will want to see the length of these deal limited in the near future, because there are now a ton of players using this loophole to lower their annual salary. Some teams will get burned by having too young of a player on a boat anchor contract.
At least Zetterberg's proven he's an elite contributer.
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Watch Bettman nullify this contract over the length of the deal. Detroit will spontaneously combust.
Seriously though, what a great deal for Zetterberg and the Wings.
by DigitalGypsy66 on Jan 28, 2009 9:19 AM CST reply actions 0 recs
My guess is Gary Bettman will want to see the length of these deal limited in the near future, because there are now a ton of players using this loophole to lower their annual salary. Some teams will get burned by having too young of a player on a boat anchor contract.
There are a couple ways you can do this:
1. Set a maximum contract length.
2. Change the cap hit to each year’s annual salary instead of the average of the entire contract… I still haven’t understood why this is not the case. This deal likely means the Red Wings will actually havae a payroll next year of close to or above $65m.
3. Apply the current rule for players who sign contracts after the age of 35 (contract counts in full against the cap regardless of retirement or being placed in the minors) to any contract that includes years where the player will be 35 or older, whether they signed it at age 21 or age 44.
These “garbage years” tacked on really are a pathetic way to circumvent the cap.
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by saskhab on Jan 28, 2009 9:21 AM CST reply actions 0 recs
I like suggestion No. 3 myself. I think that would work well.
by James Mirtle on Jan 28, 2009 9:27 AM CST up reply actions 0 recs
Agreed.
Personally, I was surprised it wasn’t that way from the start.
by Afino on Jan 28, 2009 9:45 AM CST up reply actions 0 recs
The NHLPA being generally represented by older players, I would assume that particular clause was an important part of negociations for them.
by Habs on Jan 28, 2009 10:43 AM CST up reply actions 0 recs
Averaging the salary
gets rid of the most obvious manipulations: backloading a three year deal to load up on players for a one season run, or even frontloading contracts during a rebuilding year. Combined with the age 35 rule, this loophole is really only available to the kind of player you can sign to a very long deal.
That said I would certainly go with Saskhab’s third proposal, but I suspect the union would come out against it.
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by Back In Black on Jan 28, 2009 11:05 AM CST up reply actions 0 recs
Is there anything wrong with that kind of backloading? The goal of a cap should be to keep costs fixed, not to try and dictate the competitive level of the teams in the league. If a guy signs a 2 year, $7m contract, but gets paid only $1m next year and $6m the year after, then the team would still have to deal with the player having a $6m cap hit the year after. If they can get players to agree to terms like that, and the team thinks it’s a good idea, I don’t see a problem with that.
Tomas Vanek’s cap hit SHOULD be $10m or whatever it is he actually is making this year, IMO. Same with Danny Briere. That’s what he’s getting paid.
I think with the 3rd proposal, it really hurts veterans even if they’re 33 years old. Guys like Hamrlik and Rolston signed long term deals that probably wouldn’t have been offered to them had my 3rd proposal been in place. The union doesn’t want to start squeezing guys like that who’ve played 700-1000 games.
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by saskhab on Jan 28, 2009 11:22 AM CST up reply actions 0 recs
Rolston was 35 when he signed his deal, no? He’s already affected.
by James Mirtle on Jan 28, 2009 11:48 AM CST up reply actions 0 recs
Is there anything wrong with that kind of backloading? The goal of a cap should be to keep costs fixed, not to try and dictate the competitive level of the teams in the league. … [snip] … Tomas Vanek’s cap hit SHOULD be $10m or whatever it is he actually is making this year, IMO. Same with Danny Briere. That’s what he’s getting paid.
I agree. My instinct is there’s nothing inherently wrong with frontloading or backloading: if you imagine a player will be worth quite a bit less in those final years (years where his currently young, underpaid teammates will be in their peak earning years), pay him up front in exchange for his commitment and presence later on when the rest of the roster is cashing in. That just sounds like reasonable roster management. But the way they average salary for cap hit seems to encourage wacky cap manipulations.
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by Dominik on Jan 28, 2009 12:02 PM CST up reply actions 0 recs
That’s a good question, I guess. From a fan perspective, there are a couple of drawbacks. One is that it makes the salary situation harder to follow, because instead of just term and length of a deal, you need to consider each individual year. That’s a minor point, but many fans want to understand why teams make the personnel moves they do – and play fantasy GM a bit – and this makes it less accessible. It also creates more untradeable contracts.
The other, more important objection is that it would tend to push teams even further into a boom and bust cycle. I don’t follow the NFL much at all, but my impression is that there are some teams that are simply uncompetitive for years at a time while they wait for their deferred salary cap costs to tick down. That’s not a desirable state for an NHL franchise to be in, but how can you avoid it if you want to go over the top and other contenders are backloading everything sight?
I suppose that my argument is that allowing mundane salary cap manipulation would actually be greater interference in the team-building process.
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by Back In Black on Jan 28, 2009 12:15 PM CST up reply actions 0 recs
The other, more important objection is that it would tend to push teams even further into a boom and bust cycle. I don’t follow the NFL much at all, but my impression is that there are some teams that are simply uncompetitive for years at a time while they wait for their deferred salary cap costs to tick down. That’s not a desirable state for an NHL franchise to be in, but how can you avoid it if you want to go over the top and other contenders are backloading everything sight?
I don’t follow it either, but I have heard teams being referred to as “in salary cap hell” and unable to do anything for several years – including the fact that NFL salaries aren’t guaranteed, so the signing bonuses are the big deal in football.
If the player and the team agree, I don’t really see a problem. I think of it the same way as a player signing for a lower salary in return for a no-trade clause – he gives the team a break and gets something of value to him, increased stability.
"A vacuum is a hell of a lot better than some of the stuff that nature replaces it with." -- Tennessee Williams
by Baroque on Jan 28, 2009 12:45 PM CST up reply actions 0 recs
Those are good points. It seems every cap-using league has its odd circumvention routes, and I bet (hope?) the NHL studied the NFL and NBA to try to avoid them.
I suppose that my argument is that allowing mundane salary cap manipulation would actually be greater interference in the team-building process.
You may be right. But I still think if you have defined costs and know actual salary will go against your cap in each year, you can plan accordingly. But the Zetterberg add-on of two final years at $1 million begs the question of whether you can essentially spend beyond the cap each year by signing guys well into a ridiculous age for the purpose of lowering their average salary. The scary thing is in this Zetterberg deal, both star and owner have an incentive to circumvent the cap.
Lighthouse Hockey: an SB Nation New York Islanders blog with hip issues.
by Dominik on Jan 28, 2009 3:57 PM CST up reply actions 0 recs
At a $6-million cap hit, wings can be happy with the results of the contract. It pays Henrik very well, but also allows them to fit a couple extra guys in under the cap. I would’ve thought his cap hit would’ve been similar to Lidstrom’s.
I hate the Red Wings, but I wish Chicago managed their team half as good as them.
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by wlittle on Jan 28, 2009 9:23 AM CST reply actions 0 recs
Too long
These contracts just seem was too long. Twelve years for a 28 year old player? I realize that they spread it out at the end to lower the overall cap hit, but even so, that should be a high cap hit at the end of the contract. As you said James, a serious injury and this could be a long twelve years. Never mind the fact Zetterberg has always had a sketchy back. Those injuries sure don’t get better with age.
by Illegal Curve on Jan 28, 2009 9:33 AM CST reply actions 0 recs
It’ll be interesting to see how the salary by year shakes out. Recall that Martin Erat’s 7-year contract was initially rejected by the NHL because it exceeded rules about how much a salary can drop from one year to the next.
I believe that you look at the salary in the first two seasons of a deal, divide that by two, and that’s the maximum amount that a salary can drop from one year to the next over the rest of the contract.
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by Dirk Hoag on Jan 28, 2009 11:06 AM CST reply actions 0 recs
Interesting
I hope they reject it just for the online temper-tantrum that will surely erupt.
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by Jibblescribbits on Jan 28, 2009 11:31 AM CST up reply actions 0 recs
Well, the next time owners cry poor, I suppose we should just tell them to stop cheating their own cap.
Beauty deal for the Wings, though.
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by Earl Sleek on Jan 28, 2009 11:20 AM CST reply actions 0 recs
There is one issue I’ve not heard come up in regards to the Hossa, Franzen, Zetterberg scheme. Clearly, they can only choose two of three while maintaining others in the fold.
Yet, I wonder if we are maybe overlooking Lidstrom as a consideration?
Holland is a prudent man, and while most GMs would leap at the chance to sign a player like Hossa over all else, I suspect Holland would not have made plans without thinking of the future.
Lidstrom is nearly 39 years old and has hinted previously at his desire to retire at a younger age—such as in the ‘90s when he talked of returning to Sweden for the sake of his children—and has had a few injuries over the last year. While 39 isn’t exactly young, I don’t think he is keen on playing into his forties.
Lidstrom is really the transitional period from Yzerman to Zetterberg as captain, perhaps Holland had asked him to hold on just a bit longer? Last year would have been a marvelous time for his exit, having won his fourth cup. Ditto if they manage to win again this year.
I freely admit, much of this is very speculative. However, Lidstrom’s exodus is soon and frees up the room to potentially sign both Hossa and Franzen. This leaves them absent of a major defensive player, but would also give them more room to play their younger defensive corps.
Just some food for thought.
by hallock on Jan 28, 2009 11:58 AM CST reply actions 0 recs
I think they’d regret Lidstrom leaving before playing out that last year of his contract. He’s still phenomenal.
by James Mirtle on Jan 28, 2009 12:07 PM CST up reply actions 0 recs
Lidstrom is signed through next season at his current rate of $7.45m. The problem is 2009-10… can they fit all those guys in for 2009-10? That seems unlikely unless one of Hossa or Franzen is willing to do another 1 year deal with a nudge and wink that they’ll get the money in 2010 when Lidstrom retires… But I can’t see that happening.
I definitely think Lidstrom is a retirement candidate after 2010. The Olympics and another shot at the Cup, turning 40, leaves at a very high level… seems very possible to me.
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by saskhab on Jan 28, 2009 12:10 PM CST up reply actions 0 recs
One other aspect of this contract is that in those final two years, Z will become extremely attractive trade bait for a small-market team. They could pay him $1 million to take up $6 million of cap space, thus allowing them to actually spend below the cap floor within those two seasons. Conversely for Detroit, they’d be motivated to move the aging star whose cap space might be spent more productively by the Wings at that time.
More fun than a stick to the face!
by Dirk Hoag on Jan 28, 2009 12:29 PM CST reply actions 0 recs
I’ve gotta think the percentage of guys playing at 39 and 40 is incredibly small. I imagine Zetterberg likely never even plays for those dollars.
by James Mirtle on Jan 28, 2009 12:30 PM CST up reply actions 0 recs
Detroit will need the money at the point to keep paying Chelios. :)
"A vacuum is a hell of a lot better than some of the stuff that nature replaces it with." -- Tennessee Williams
by Baroque on Jan 28, 2009 12:46 PM CST up reply actions 0 recs
I see what you’re saying, but Zetterberg will be the next captain of this team and they’re not going to be trading him after putting in 10+ years with the team unless he became a crazy Avery-like distraction.
by HockeyJoe on Jan 28, 2009 4:42 PM CST up reply actions 0 recs
Insurance?
Aren’t NHL contracts insurable for up to seven years?
If I understand it correctly then there isn’t really all that much financial risk for the Wings in the event of injury if the salary diminishes over the last five years.
by PRC on Jan 28, 2009 2:59 PM CST reply actions 0 recs
Well, it's worked out well for the Islanders with DiPietro....
I"m excited to have Hank locked up in Motown but these long contracts are just too risky.
by SDWingNut on Jan 28, 2009 3:03 PM CST reply actions 0 recs
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