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Veleno and Seider garner praise
You can read my last article regarding two young and developing prospects for Detroit. With a bit of a stir today regarding the possible return of sports, TSN and others have turned to the glaring hole of finances facing players and ownership. You can read that here
TSN Article
When a blogger says “a prominent agent said” you can’t really garner who on earth that may be. The number of people with “sources” in this particular business range from people in the trenches to those who more imagine any actual input than truly exists. IE, “my imaginary friend said...”. However, when TSN reports that a “prominent agent” gave a quote, it’s going to be one of the top names in circulation. The quote from said agent is, “I don’t think players grasp how much the world has changed.” This would seem to indicate that agents are trying to prepare their players for the worst, and anything better than that is a gain. Players and Management are hyper focused on a stagnant cap, or a slight gain of $1 million. In that scenario, this year’s free agent class is already in tight with teams at or near the ceiling.
Pierre McGuire on Salary Cap A trek to the rainy day meteorologist in Pierre McGuire finds some startling numbers. As it stands, the league is going to lose 1 billion in revenue. Thats AS IT STANDS NOW. Any comments that ignore that preface will be ignored. If the season were to shut down and they can’t get the train back on the tracks, the cap will face some sort of reduction. Under the current CBA, no one thought about what would happen if the league shut down. The onus is on the players to “repay” the owners for inequitable division of Hockey Related Revenue. To put that in perspective, in a regular year where there is a Stanley cup, players are paying out as low as 7% to as high as 15% of their pay as the make even. What about a year that lost, not only the play offs, but hundreds or regular season games? That’s where you’re hearing players like Panarin talk about the league taking up to half of their paychecks.
A billion dollars isn’t going to come easily. A scenario of “payments spread out” over multiple seasons to ease the burden on players has already been bandied about. This is causing me to believe that there is no “force Majeure” clause in the current deal. The clause used to be called “hand of God” and was used to keep insurance companies from paying for natural disasters. It also relinquishes liability to public utilities in certain cases. The players need to get one in the next deal. The loss of a season due to Government mandate wasn’t thought much about during the past negotiations. Players are already unhappy that owners get a 10% discount on their salaries in the form of escrow. This could spell disaster for some.
Pierre McGuire’s comments hit hard with the Pittsburgh station. As it stands, under Hoyle’s rules, the cap could fall 25-40%. If the cap fell 25%, you’re looking at a new spending limit of 61 million. Cap teams would have to shed 20 million just to be compliant. A few teams could do that with 2 compliance buyouts, but many would be hard pressed. I am sure Kyle Dubas is monitoring this very carefully.
Teams are going to have to plan scenarios below the “break even” point just in case. If the cap fell 5 million, or 10, or even 25, what can they do? In an extreme case could three compliance buyouts be awarded? Will any teams have cap room if that drop is significant enough? Detroit has 45 million committed but several contracts to sign. Getting to 60 million won’t be that hard at this point.
And so, what about this free agent class? Taylor Hall stated many times his admiration for John Tavares is going to the market as a UFA. Hall had decided back then he was going to do the same. He may have already turned down offers of 8 or 9 million in hopes to break the 10 million dollar mark. 3 months ago, no one would blame him. Now? Those offers he turned down may not resurface. Brayden Holtby loves Washington, and may even be willing to take a discount. But, if the cap goes down, even that wouldn’t be enough to keep him there. A lot of agents are nervous right now.
“I don’t think players truly grasp just how much the world has changed,” one prominent agent said Tuesday. “One thing I’ve learned working with players is that they have a hard time accepting going backward financially, but that’s what is going to happen.“
That’s the quote from the agent. Players, for the first time since the cap was created, may be hearing that their pay day just got turned into a pay cut. The knee jerk reaction is, ok, take a one year deal and extend when the cap goes up. The problem, will the player get hurt? Every year closer to 30 diminishes the return as well. The pressure to find some long term stability may push the hand of many players to accept far less in order to attain some sort of term. It’s a bad year to be a free agent.
We’ll take a look at some of the top names hitting the market this year (whenever that happens) and what it could mean for them tomorrow. I would expect some of the low earners to head to the KHL where the tax differential is very different. It will be the mid tier players that miss out. The elite will find a spot, and the league minimum guys will as well. The 3 to 5 million dollar player is the one that is going to have the hardest time this time around.
Detroit Red Wings Blogger • 
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