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The rising cost of mediocrity: How Connor McDavid’s generational contract will affect NHL Free Agency

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Connor McDavid has just signed the biggest cap hit contract in NHL history. While he's a generational talent, his contract is a symptom of just how overblown free agency salaries have become.

Edmonton Oilers v Anaheim Ducks - Game Five Photo by Harry How/Getty Images

So, the speculation is over.

Connor McDavid has signed a contract in Edmonton for an average salary of $12.25 million for the next eight years and hockey media has collectively lost its mind about what a contract this is.

We've had comparisons to Sidney Crosby's contract, we've had the sight of the Edmonton media go from Dave Staples saying McDavid wanting to be paid what he's supposed to be worth is harming the team, to Dan Barnes on how the contract is both insane and logical at the same time (which seems to me to indicate that someone at the Edmonton Journal has a basic misunderstanding of how words work, but there we are). And with the contract signed, we've had the retroactive looks at how this might affect other teams (an issue perhaps most pressing in Toronto - Jeff Veillette takes a good deep-dive look at things here on what McDavid's contract could mean for other young stars in the league, specifically the stable in Toronto who are arguably the closest comparables to the Edmonton center right now).

What is interesting, however, is that nobody has reacted to this salary considering the implications of what it says about the larger FA market and contracts in general. That NHL free agency is a volatile seller's market hyped by misguided media lionizing of players, the stubbornness of GMs to use statistical trends and analysis in many cases, and demand being created far out of proportion to what is being supplied.

In short - NHL free agency is a crapshoot, as are contracts, and the vast majority of NHL GMs, while mostly incredibly intelligent people, are dumb as hell, or at least rendered unable to make the best of an incredibly dumb situation.

Let me explain.

Here's an important thing to note, first of all. We're not saying at this point that superstars are unworthy of rising wages. For example, here's Veillette's reasoning for why McDavid is worth what he is, from the article linked earlier, and it's pretty solid:

Connor McDavid is incomparably good

I’d like to reiterate that McDavid scored 12.3% more points than any other player in the NHL this year at the age of 20. That is, as the kids would say, completely and totally obscene, even if it helps that Crosby missed a few games. To put this into context, I looked up every regular player who put up at least 1.2 points per game in an Age 20 or younger season and combined their output at 19 and 20 together.

For reference, Auston Matthews sits at 0.927, Mitch Marner sits at 0.87, and William Nylander sits at 0.796. All incredibly good, and reflective of them being future superstars, if not Hall of Famers if everything goes right (also, let’s see how Auston and Mitch do in their Age 20 years). But their numbers mean that their aspirations are in the context of the rest of the league.

McDavid’s aspirations, to be blunt, are with history. His multi-year comparables (Ovechkin didn’t have an age 19 season and probably gets a boost as such) are Gretzky, Crosby, Lemieux, and Lindros. Two of these players are neck in neck for the greatest of all time spot. The other two were considered the best hope to climb into the Top 4-5 before injury, though Crosby has an outside shot still.

That’s an entirely different playing field, and it’s hard to believe that a player poised to be one of the single greatest in the history of the sport, being locked up through his entire prime with a deal that expires just before the historical age for decline. The only contracts that are comparable in the entire cap era are probably Crosby and Ovechkin’s, and even then, one took a jersey number deal while the other signed to a term literally not possible under the Collective Bargaining Agreement today.

Argued like that, McDavid's contract suddenly looks a lot more defensible.

However, whether it's good for the rest of the league is another issue entirely, and this is where we come to the meat of the argument:

NHL Free Agency is a crapshoot that's dictated by superstar salaries, but it really shouldn't be. The fact that Connor McDavid has now signed the biggest contract by cap-hit in NHL history is great news for him, but it's also a symptom of just how crazy salaries have become.

For example (and here's where Jeff and I start to diverge a little in our views) - remember when Sidney Crosby signed his deal and everyone was talking about the "pressure" of whether he lived up to it five years ago? Let's not also forget that this was a player who was already in the Triple Gold Club and had already won a Stanley Cup as captain at the age of 23. McDavid might be looking like he's in the same company and indeed beyond it - but here's the thing - individually, he might be fantastic, but he hasn't shown himself to be among the NHL greats consistently - certainly not to a level where he's worth nearly half as much again as one of the (now almost universally acknowledged) greatest players of all time.

Compare the reaction to McDavid's contract with, say, that of Jonathan Toews, who was laughably being presented as a better player than Crosby at one point.

But are max-contracts like McDavid's in themselves to blame for the ridiculous rise in top-level NHL salaries (in 8 years, they've risen by a third)? This is the simplistic view and perhaps the most obvious way to gauge if the free-agent market has changed.

I was curious, so I went and took a look at free agency back to 2011 (the earliest year for which comprehensive figures were available) and looked into it to see if I could spot any trends. Here's what I found:

FA Basic Numbers Comparison.csv

YEAR NUMBER OF PLAYERS TOTAL SPENT (M$) HIGHEST CAP HIT (M) AVERAGE FA SALARY (M) AVERAGE (TOP 10) FA CONTRACTS OVER AVERAGE
YEAR NUMBER OF PLAYERS TOTAL SPENT (M$) HIGHEST CAP HIT (M) AVERAGE FA SALARY (M) AVERAGE (TOP 10) FA CONTRACTS OVER AVERAGE
2011 16 52.3 4.5 (Tim Connolly) 2.27 2.75 1
2012 147 577.16 7.53 (Ryan Suter/Zach Parise) 2.39 5.55 11
2013 143 474.75 6 (Jarome Iginla) 2.08 5.05 8
2014 160 596.1 7 (Paul Stastny) 2.36 5.65 14
2015 157 343.93 6 (Mike Green) 1.58 4.395 5
2016 177 541.799 6 (Milan Lucic/Kyle Okposo) 2.08 5.45 12
2017 123 (incomplete) 337159 8 (Joe Thornton) 1.78 5.35 4
AVERAGE 130 369.4 6.4 2.0885714286 4.9964285714 7

This is interesting because it shows that in over half of the FA years since 2011, there are an above-average number of contracts being given that are worth more than the league average of the top ten FA contracts.

This essentially means that the number of players being given more than what most would consider "top ten FA money" is above what you might expect it to be, and this is particularly notable in the year a "big" potential free agent signs a massive contract or extension (see: Crosby in 2012 and very notably Steven Stamkos in 2016).

And here's the thing - it's not just the free agency market driving up wages, it's the increasing fear of players even making it to FA and other teams willing to pay insane money that's driving these extensions. One that was arguably precipitated by the (then) truly monumental contracts handed to Jonathan Toews and Patrick Kane, one that has been a key part of seeing the average top ten salary in the NHL rise by nearly 20% since 2011. Here's the data, as proof:

FA Basic Numbers Comparison 2.csv

SEASON HIGHEST CAP HIT (M$) TOP 10 CAP HITS TOTAL AVERAGE TOP 10 CAP HIT
SEASON HIGHEST CAP HIT (M$) TOP 10 CAP HITS TOTAL AVERAGE TOP 10 CAP HIT
2011/12 Alex Ovechkin (9.53) 80.67 8.06
2012/13 Alex Ovechkin (9.53) 81.08 8.1
2013/14 Alex Ovechkin (9.53) 82.63 8.26
2014/15 Alex Ovechkin (9.53) 86.62 8.66
2015/16 Jonathan Toews/Patrick Kane (10.5) 91.625 9.16
2016/17 Jonathan Toews/Patrick Kane (10.5) 93.35 9.33
2017/18 Connor McDavid (12.5) 99.35 9.94

What that table shows is that the amount of money being earned by the top 10 earners in the NHL has risen by nearly a fifth in the past four years alone, since the Toews and Kane's contracts.

This offseason, we've seen the first example of that happening again. As soon as McDavid's reported “demands” came out, the "lesser" superstars started getting paid too. Carey Price. Marc-Edouard Vlasic. Martin Jones. These are all very good players, but now they're earning salaries that, only five years ago, would have put them in the top 20 in the league. Not now.

Here's another telling statistic: going back to last year from FA, if Milan Lucic had received his FA contract in 2011/12, he'd have been 45th among league earners. Now? 81st.

In 2011/12, there were 143 players in the NHL earning over $4 million a year. Now? There are 223. That's an increase of nearly a third, or about 80 players. There might be more cap money to spend, but whether or not it's being spent wisely in free agency is another question.

Here's the thing. As your common-or-garden NHL player sees star salaries rise meteorically, they’ll want a piece of the pie too. This is the kind of climate in which someone like Milan Lucic can demand $6 million a year for seven years at the age of 29, apparently because he's still the type of player that you "need" in the NHL, despite playing the type of game that wears down bodies and is entering his declining years. It's a contract that seems based purely on the fact that he was universally hyped as the "top free agent" coming into 2016, hype that got him a contract not that far off from the extension given to an NHL superstar like Stamkos that same year.

But perhaps the most telling example of the insanity of the free agent market is yet to come. We've seen Patrick Marleau given a 3 year, 6.25 million dollar deal at the age of 38 by the Maple Leafs, which is far overpaying for the ages 38-41 years of a declining player, but then there's this.

Here is a comparison of two NHL players, with the names removed. One is being paid just over the league minimum of $650,000 a year. The other was universally touted by "mainstream" NHL media and experts as one of the best defensemen in the NHL and among the best of his free-agent class last year, and viewed by his team as an important, key re-sign this season, to the point he's now on a four-year, $4 million a year contract. Which is which? (stat work, as always, from Domenic Galamini at ownthepuck.ca)

It's kind of tricky to justify either being on $4 million a year, because one player is around the average and another is, simply put, a way-below-average NHL defenseman in every category.

But if you had to choose, you'd probably say that of the two, the defender on the left is the one worth more money, right? After all, he's performed better over the past two years and his numbers are trending up too.

Well, the defender on the left is Arizona's Adam Clendening, 24 years old, $650,000 cap hit.

The defender on the right is a name you might be surprised to recognize as one of the NHL media darlings of the past few seasons. It's Edmonton's Kris Russell. Specifically, Russell's performance between the 2015-16 season and now, the two years when he's been showered with praise by NHL writers and GMs, particularly those in Edmonton.

Russell is perhaps the most glaring example of media hype earning a player far more than he's worth. It's a situation that's causing NHL teams real issues as GMs continue to fall for it, as outlined here in the case of Chicago by Second City Hockey.

The problem here isn't necessarily the superstar contracts themselves, then, but what they mean for the rest of the market.

Contracts like McDavid's are key markers in the progression of the NHL because they change the market as a whole. In a market that's already suffering its fair share of inflation, contracts like McDavid's are the last thing the long-term future of the NHL needs. They'll only accelerate the trend of mediocre players and media darlings being ridiculously overpaid while encouraging players in the NHL top tier to demand equal or more as the wage gap rises.

This is the kind of trend that will lead to a lockout, and in the future, however good McDavid turns out to be, it's one that will ultimately prove costly for both him and the NHL unless a bit of sensibility returns to contract negotiations.

And like so many things, it's one being driven by the "experts" in the NHL, based on nebulous hockey wisdom that can't be backed up by stats.

It's insanity, and it needs to stop. NHL GMs need to think smarter. Now.

Or the consequences for the NHL could be catastrophic.