Saturday, April 12, 2008

Because I know speeds will read this eventually...

"Gilbert will earn $3.5 million next season with a $1.5 million signing bonus, $3.5 million in 2009-2010, $5.5 million with a $1.5 million signing bonus in 2010-2011, $5 million in 2011-2012, $3.5 million in 2012-2013, and $3 million in 2013-2014 for a salary cap average of $4 million a season."

The way I read this is:

1) $2.0M Salary + $1.5M Bonus
2) $3.5M Salary
3) $4.0M Salary + $1.5M Bonus
4) $5.0M Salary
5) $3.5M Salary
6) $3.0M Salary
-----------------------------
ST) $21.0M Salary + $3.0M Bonus
-----------------------------
T) $24.0M / 6 Yrs = $4M Cap hit.

If I'm correct, this makes Gilbert the most tradeable in years 2, 5, and 6. As a matter of fact one can expect Gilbert to be an absolute steal dollar wise at the tail end of his contract even if his cap value is still $4M. This would IMO make this contract fantastically astute if not for one thing: Ales Hemsky's contract ends when Gilbert is still making $5M.

I assume that Katz is willing to spend all sorts of money to win. In terms of adding players to supplement the Oilers' core, this would make Gilbert's low payout at the end simply fantastic if it were also timed to coincide with a year Hemsky is still under contract. Of course we're still a few years away and one would expect that if Hemmer is still worth his salt Edmonton will keep him around but it would be at market $ and therefore not such a budget advantage as if it coincided with Gilbert's cheap years.

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Basically, I am trying to get a sense of what the advantages/disadvantages of Gilbert's deal are in terms of its structure. There has to be a reason it's laid out the way it is, true?

9 Comments:

Blogger Mr DeBakey said...

My "why" is the bonus.

Why $4 + 1.5
instead of $5.5?

I'm not sure I see the advantage to either party.

I'm sure there is a perfectly rational explanation.

4/12/2008 3:44 pm  
Blogger Devin said...

The bonus is favourable to Gilbert - he gets a cheque for 1.5MM on the first day of the season rather than being paid out in increments. Always better to have your cash in hand asap -- this is why you are seeing front-load contracts, too, since the net wealth potential is greater in dollar terms.

4/12/2008 8:41 pm  
Blogger Jonathan said...

This is a thread hijack, but I have some very confusing data here:

http://coppernblue.blogspot.com/2008/04/power-play-2007-08.html

and I thought that since most of the stats fellows hang out here, one of you might take a look at it?

4/13/2008 2:55 pm  
Blogger Showerhead said...

devin - good point re: wealth potential. I think Edmonton paid Gilbert quite fairly and don't see that they would need to throw him that bone but if it were all the same, why not I suppose.

I'm still looking for more though... I'd really give quite a lot to have intimate knowledge of contract negotiations and the factors played out within them.

4/14/2008 3:39 pm  
Blogger speeds said...

I couldn't, and can't, still figure it out completely.

I asked this question to a poster at calgarypuck (reply 134) a couple of days ago. He's a guy who works for the Oilers, doing something for their website (I'm not sure what exactly).

I asked "Any idea why they structured the deal the way they did? Why the signing bonuses, why the up and down in salaries?"

He replied, "My guess is it's a request made by the player/agent. A lot of deals have begun to be structured this way to protect the player in case of a buy out."

My initial thought,upon hearing it wasn't simply 4 mil per year,was that they were trying to either help (hurt) other teams by frontloading (backloading) the contract in terms of its arbitration consequences, but I'm not actually sure if the first 2 years of Gilbert's deal count as arbitration comparables for RFA's.

4/14/2008 9:48 pm  
Blogger PunjabiOil said...

The question can be answered with a mere counter-question.

When has Kevin Lowe done anything that has made sense?

4/15/2008 1:40 am  
Blogger Vic Ferrari said...

I assume that the bonus is paid at the beginning of those seasons, is that right?

And how is the bonus accounted for in terms of a buyout, or a trade, in terms of budget and cap space?

I can't imagine that it makes a world of difference. Still, IF the bonus counts towards the cap hit of the team that paid it, then trading a player like this at the deadline should garner a better return, no?

Could a team sign an Owen Nolan type to the league minimum with a $2.5 million bonus, then trade him away at the deadline, with the receiving team only owing a couple hundred thousand in salary and cap hit?

4/16/2008 2:35 pm  
Blogger Showerhead said...

That would be one hell of an interesting loophole... the player gets the security of money up front while the team gets the security of a more marketable asset. I just can't see the cap hit disappearing like that, though it would still make your Owen Nolan a cheap financial acquisition.

BTW Vic, I've gotten so fucking sick of "penalties taken that negate a scoring chance are soooo much easier to kill" from TV announcers. Has anyone looked at, say, faceoffs immediately after minor penalties by zone and looked at percentages? The idea being that if the faceoff is anywhere but the defending team's zone the penalty was a dumb one?

4/16/2008 11:30 pm  
Blogger Vic Ferrari said...

showerhead said

I've gotten so fucking sick of "penalties taken that negate a scoring chance are soooo much easier to kill" from TV announcers.


I doubt that anyone will bother to prove them wrong, since it's obviously nonsense anyways.

4/17/2008 11:37 am  

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