Tuesday, July 11, 2006

Strangest contract thus far?

Here's a deal I still haven't really figured out - Chris Higgins.

Scores 23 goals as a 23 year old, and signs a one year contract for 673K.

Couple things I don't get here:

(1) How was his qualifying offer even that low as a mid 1st round pick coming off his first contract?

(2) Who's his agent, and what's wrong with him?

(3) Didn't he think he'd have better leverage by waiting it out a bit, and signing closer to the start of the year?

(4) No GM thought Higgins was worth an offer sheet at 1 mil, which would only have cost a 3rd rounder in compensation? Guess we won't be seeing any offer sheets, if that's the case. What about even a 2 mil offer on a one year deal, 2nd round cost in compensation?

(5) Does this at all bode well for Lupul's deal, or only if that deal is short term? I wonder about Stoll as well, though he's arb eligible and Lupul isn't.

14 Comments:

Blogger Jeff J said...

There's something screwy going on. If that $673k figure is correct, there is a lot of bad info out there on his previous contract.

7/11/2006 6:03 am  
Blogger Vic Ferrari said...

That is a bit strange. It was his first full season in the NHL, still, 23 goals be 23 goals.

Lupul and Stoll both have longer track records at the NHL level, especially the latter. Though this contract certainly won't help their arbitration case.

I've been wondering when you would chime in with your estimates on one-year and multi-year deals for Horcoff, Hemsky, Stoll and Lupul.

On the radio yesterday Howson said that they were pursuing a multi-year deal with Horcoff and mentioned the Sedin's (3yr $10.7M) as the comparable players. That may be a shade optimistic, Erik Cole makes sense too (3yr $12M). And Horcoff could probably get Jokinen-type money on the open market if he were willing to play anywhere.

So I'm thinking that Horcoff will come in around $4 M per year, depending on the length of the deal.

I have no guess on the others though. What are your ballparks for those guys, speeds?

7/11/2006 6:10 am  
Blogger Black Dog Hates Skunks said...

I guess the question is - what leverage does he have? If he is not arbitration eligible then what can he do?

Can't hold out.

Maybe they are working on a longterm deal now?

Be interested to see what Hemsky, Stoll and Lupul get. I think Horcoff comes in @ 3.5-4.00

Had Hemsky pegged for 2M and Stoll @ 1-1.25 but I honestly have no idea.

I am interested to see what happens next season if all of these RFA guys around the league get big raises but the Cap rises just a fraction.

Because if it stops rising at some point there will be no money.

7/11/2006 7:56 am  
Blogger Showerhead said...

Chris Higgins:
2005/2006 Regular Season:

13 ES Goals
7 PP Goals
3 SH Goals

10 ES Assists
5 PP Assists

38 Total Points in 80 GP

27.1 ESP/1000 min
93.9 PPP/1000 min (5.6 PPP/hr)

Based on an Oct 11th game, spent most of his time on a line with Ryder and Ribeiro.

Based on an April 12th game, spent most of his time on a line with Koivu and Ryder.

He put up most of his points in the second half of the season IIRC which would be when he played with Koivu-on-fire after the Olympic break. I think it's likely that Higgins was not the guy driving the bus when he was on the ice but that is without seeing any of the Habs games in question or, say, Higgins w/ and w/o Koivu vs. Koivu w/ and w/o Higgins stats.

In sum, I would guess that Montreal assumed he was benefitting from the talent around him and went on a timely hot streak towards the end of the regular season. This may or may not be true... and even if it is, Higgins' case should have been pretty strong with the 23 G, ~.5 PPG and the 5.6 PPP/hr he put up, especially being a first rounder as you say.

Now that you've got some numbers, can you make a good guess at why his salary was THAT low? I can't, though I can see why they didn't throw the bank at him.

7/11/2006 9:13 am  
Anonymous Anonymous said...

Jeff J:

It can work out that way depending on how his entry contract was structured.

His cap number in that last season would include any signing bonuses he was offered, but he would NOT have to be qualified based on his signing bonuses.

ie. Say he signed his rookie contract for 2.7 mil. Up to 50% of that could be via signing bonus should he and MON have negotiated it that way (under the old CBA where Higgins was drafted, new CBA is 10% max).

So if his salary was 600K per year and he received a 900K signing bonus (spread over the the 3 years) in making up that 2.7 mil, he'd have then been qualified at 660K (Still a 10% raise under 1 mil, I think, in QO).

As a practical matter, under the old CBA, most players with leverage would take the max 50% of their salary as signing bonus in the 1st 2 years, but would take no signing bonus in their 3rd year to get their QO as high as possible. That must not have happened with Higgins, or he'd have signed his QO at a much higher rate than he's signed for next season.

Speeds

7/11/2006 10:17 am  
Anonymous Julian said...

I am interested to see what happens next season if all of these RFA guys around the league get big raises but the Cap rises just a fraction.

Because if it stops rising at some point there will be no money.


Makes me wonder if we'll see a smart GM who doesn't overpay his RFAs get screwed over by arbitration when a player is awarded a suprisingly high contract based on what other, dumber GMs are offering their (comparable) RFAs.

7/11/2006 10:49 am  
Anonymous Julian said...

This comment has been removed by a blog administrator.

7/11/2006 10:55 am  
Anonymous namflashback said...

Makes me wonder if we'll see a smart GM who doesn't overpay his RFAs get screwed over by arbitration when a player is awarded a suprisingly high contract based on what other, dumber GMs are offering their (comparable) RFAs.

I'm also getting the sense that there are some smart agents who are simply saying "let's get you the longest, most lucrative contract now -- because the pie won't be as big later." As escrow provisions trigger in the future -- these guys with bigger points will benefit more than their bretheren.

Arguably, this is the last year (since the cap was an aribitrary choice). The pie may grow a little over the next few years -- but that's it.

7/11/2006 11:23 am  
Blogger Black Dog Hates Skunks said...

julian - we will definitely see that just as we did prior to the new CBA but I think you might see guys signing rather then go to arbitration - say next summer the Oilers are near the Cap and Hemsky is up for arbitration again - he only signs for a year this year.

Anyhow, he goes to arbitration and the gets a ridiculous deal - but the Oil are near the Cap as are the majority of teams that have the money to spend - what if the Oilers chose to walk away (granted this would probably never happen - Hemsky may be a bad example)

so now he's a UFA but nobody has the cash to come anywhere near to the nice deal the arbitrator had him for.

You're going to get deals that are goofy but I think the cap makes player movement so fluid teams will just take their loss and move on - watch NJ this year - they have to move guys - they are already over the cap - so they are going to lose Gomez plus ??? maybe Rafalski - they have to cut a lot of salary

I think teams are going to bite the bullet - if you can't afford a guy - if he is overpaid somehow then you have to get rid of him - you need value for the money you spend

7/11/2006 12:11 pm  
Blogger Showerhead said...

namflashback: excellent post!

I have no doubt that some of the more astute NHL agents are driving for long term deals for exactly the reason you mention. I also can't help but wonder if some of the less astute NHL GM's are pushing for the same type of contracts thinking the pie will keep growing. I sure as hell hope not, but it seems like what I'd want my agent to push for if I were an NHL player these days. Of course we could all be proven wrong by way of miracle but I sincerely doubt as much.

blackdoghatesskunks: semi-related to what you are getting at, I wonder if it's in the Oilers' best interests to lock up their RFA's long term, even at a slight overpay, so as to avoid the situation altogether. My thinking here is that the mid-level and low-level NHL players are going to be made to bite the bullet for their foolish ownersagain as their contracts get squeezed to make room for overpriced stars. As long as there are enough $3M guys who could be signed at $2M and $2M guys who would take $1.5 for the sake of an NHL job, there will be at least some GM's who can dig their way out of their own stupidity.

I don't fancy Edmonton to push the cap-limit each and every year and hence they may be able to get away with it more than a Toronto or New Jersey would. My opinions here are obviously speculative but I don't pick game night winners and I don't propose trades so I need to get my hypothetical kicks SOMEWHERE :)

7/11/2006 3:36 pm  
Blogger Vic Ferrari said...

Making long term deals, or avoiding them, as a means of cashing in on the accuracy of your own predicted future trend of league revenue ... dodgy business IMO. I would hope that Lowe has taken sound advice on the issue and is hedging for either eventuality. (i.e. a mix of long, mid and short term deals for the players, in terms of cash). Hell, a sharp change in the value of the Canadian currency relative to USD could have a huge impact on HRR on it's own. And look how badly the big three auto makers misjudged that one for a few years running.

7/11/2006 3:45 pm  
Blogger Vic Ferrari said...

Making long term deals, or avoiding them, as a means of cashing in on the accuracy of your own predicted future trend of league revenue ... dodgy business IMO. I would hope that Lowe has taken sound advice on the issue and is hedging for either eventuality. (i.e. a mix of long, mid and short term deals for the players, in terms of cash). Hell, a sharp change in the value of the Canadian currency relative to USD could have a huge impact on HRR on it's own. And look how badly the big three auto makers misjudged that one for a few years running.

7/11/2006 3:46 pm  
Anonymous namflashback said...

vic,

I agree, mix is good. All negotiations being equal (and arbitration avoided), I think you will see something like this; it will indicate who the organization is high on -- and those who they want to wait and see:

i assume that they will want:
Hemsky on a long
Horcoff on a long
Lupul on a short
Stoll short
Smid long

Potential UFA's after this year are:
Staios
Smyth
Moreau

1 gets an extension mid season (Smyth?). 1 gets resigned. 1 of these character guys gets traded.

7/11/2006 4:45 pm  
Blogger Showerhead said...

Vic:

I'm no business graduate, but do revenue predictions no become less dodgy for the experts out there?

I'm not saying that I would expect someone to be able to predict the cap limits years in advance but weren't the first rumblings of the cap's increase around January this past season? Obviously the cap won't move in the same direction every year (especially after this one) but if a GM did want to try to roll the dice a bit with a contract or two the information should be there IMO.

7/12/2006 7:58 am  

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