When the NHL and the NHLPA signed a new collective bargaining agreement a little over a year ago, fans around the globe had to learn a new world order. No longer were cap-circumventing contracts running 12 or more years allowed. No longer could the cap numbers be lowered and obscured by adding small-salary years at the tail end. This of course makes comparison between contracts under the previous system and a new one a little bit problematic, and that seems to impede the instant-analysis of most armchair GMs around the league.
The biggest nuisance here is when new contracts for star players such as Getzlaf, Perry, Giroux, or even speculated extensions for players like Toews and Kane are being inevitably compared to the contract of Sidney Crosby. Usually the phrase "Crosby money" will be used. The problem here is that it really isn't.
Outset
Matter of fact is, Sidney Crosby's contract is of a cap circumventing nature. Crosby makes $104.4 million stretched over 12 years. This of course exceeds the new limitation on contract length of 8 years. In three of these four additional years, his salary is only $3 million, pushing his cap hit down to $8.7 million. It should also be noted here that Crosby chose this number in reference to 87, his lucky number.
All of this also means that the Penguins run the risk of a cap penalty should Crosby retire early (and though I do not wish it upon him, with his history of concussions this is a distinct possibility). For example, should Crosby retire in 2020, the Penguins will have reaped cap savings of $15,900,000 and will be punished by having a cap penalty of $3,180,000 until 2025.
True Cap Numbers
While all this is true, it tells us very little about his actual worth. For this I have taken the first eight years of his contract and calculated the cap hit they would cause if those were the only contract years. I've done the same for several other players who have cap circumventing contracts.
| Name | Duration | Last year | Total salary | Adj. Cap hit | Act. Cap Hit |
|---|---|---|---|---|---|
| Sidney Crosby | 8 | 2020-21 | $85,800,000 | $10,725,000 | $8,700,000 |
| Alexander Ovechkin | 8 | 2015-16 | $74,000,000 | $9,250,000 | $9,538,462 |
| Ilya Kovalchuk | 8 | 2017-18 | $79,000,000 | $9,875,000 | $6,666,667 |
| Zach Parise | 8 | 2019-20 | $80,000,000 | $10,000,000 | $7,538,462 |
| Ryan Suter | 8 | 2019-20 | $80,000,000 | $10,000,000 | $7,538,462 |
| Shea Weber | 8 | 2019-20 | $92,000,000 | $11,500,000 | $7,857,143 |
I've also added Ilya Kovalchuk's contract. While the contract is no longer active, I believe it to be the most significant example of old cap circumvention. I should also note that Ovechkin's contract is somewhat odd in structure with the more expensive years coming in the 2nd half of his contract, making his adjusted Cap hit less than his actual cap hit.
Now let's look at some contracts which are in fact compliant to the new CBA:
| Name | Duration | Last year | Total salary | Cap hit |
|---|---|---|---|---|
| Evgeni Malkin | 8 | 2021-22 | $76,000,000 | $9,500,000 |
| Corey Perry | 8 | 2020-21 | $69,000,000 | $8,625,000 |
| Ryan Getzlaf | 8 | 2020-201 | $66,000,000 | $8,250,000 |
| Claude Giroux | 8 | 2021-22 | $66,200,000 | $8,275,000 |
| Steven Stamkos | 5 | 2015-16 | $37,500,000 | $7,500,000 |
| Eric Staal | 7 | 2015-16 | $57,750,000 | $8,250,000 |
| Rick Nash | 8 | 2017-18 | $62,400,000 | $7,800,000 |
| Phil Kessel | 8 | 2021-22 | $64,000,000 | $8,000,000 |
| Dion Phaneuf | 7 | 2020-21 | $49,000,000 | $7,000,000 |
| Kris Letang | 8 | 2021-22 | $58,000,000 | $7,250,000 |
| Jason Spezza | 7 | 2014-15 | $49,000,000 | $7,000,000 |
| Brian Campbell | 8 | 2015-16 | $57,143,000 | $7,142,875 |
| Drew Doughty | 8 | 2018-19 | $56,000,000 | $7,000,000 |
| Tukka Rask | 8 | 2020-21 | $56,000,000 | $7,000,000 |
| Henrik Lundqvist | 7 | 2020-21 | $59,500,000 | $8,500,000 |
Some of these contracts such as those of Staal, Doughty, Spezza and Campbell were signed before this new CBA.
The take away here should be comparing the Adjusted cap hit of the Non-compliant contracts with the cap hit of the compliant ones. When we do, the difference is very little. Top players are being paid pretty comparable amounts before and after the change in the CBA. The only difference is that players are no longer being padded out and Cap hits aren't being artificially decreased.
The statement that players are being paid "Crosby money" and do not deserve it is a false one, as Crosby's adjusted cap hit still exceeds those of top players by a healthy amount.
The myth of rising player salaries
Another interesting secondary myth that rises from these changing contract structures is that 2nd line players will soon be paid in the vicinity of $9,000,000. This myth arises from two factors: the perceived rise of salaries of top line players as discussed above; and the expected rise in the salary cap in the coming years.
While it is generally expected that the cap will rise to around $71.1 million next year, it's not like General Managers around the league are unaware of that fact or this is any kind of surprise to them. GMs plan for this sort of thing. 71.1 million is also on the trajectory the salary cap followed since its introduction, except of this season due to the lockout.
Top players are being paid accordingly, but there hasn't really been any jump here and they aren't going to pull the salaries of 2nd liners upward unless they themselves experience a similar adjustment upward. Further, even if there is a scarcity of talent o the open market, General Managers are not all going out on a spending spree and outbid each other while handcuffing themselves from obtaining true talents or paying their drafted talents (exceptions like Ville Leino not withstanding).
While further in the future it will certainly be possible that 2nd liners will be paid the amount top players are being paid today, this will only happen if the NHL experiences a significant boom and its revenues explode, or due to inflation and the devaluation of the U.S. dollar (in which case the value of those dollars will be very different).
So overall, if someone refers to a contract extension as "Crosby money" or talks about player salaries exploding, they're probably wrong.
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