34.5 million reasons I’d be against compliance buyouts in the next CBA if I were a player

Escrow has been a dirty word among players for the better part of a decade now, and it’s understandable knowing that they see an extra 10%, 15%, or even 18% shaved off of their every hard earned paycheck. However, it’s a necessary evil for the revenue sharing agreement in cap system to work. As it is right now, the salary cap system is set up to overpay the players from the outset of every season. The salary cap ceiling is set to create a 57.5/42.5 revenue split between the players and league. Escrow exists to redistribute the revenue so that it is split 50/50 at the end of every year, as the NHL and NHLPA agreed upon in the 2013 CBA. So every cap team in this league is an extra little bit of escrow tagged onto the players. There are also a few other well-known causes of escrow, such as the salary cap escalator, LTIR, and cap-advantaged contracts, that are explained here.

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There is, however, one unique cause of escrow spiking that I have heard little of. It is something that happened in the two years after the 2013 CBA was signed and that something is also being discussed as a likelihood in the next round of labor negotiations. That something is compliance buyouts. Compliance buyouts are get-out-of-jail-free cards for teams that don’t like one of their contracts. These buyouts still require the teams to pay the player a large percentage of his contracted salary, but there is no cap hit associated with the buyout (unlike regular buyouts). Continue reading “34.5 million reasons I’d be against compliance buyouts in the next CBA if I were a player”

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Reviewing Lundqvist’s Year-to-Date Stats, January Edition

I looked at Lundqvist’s year-to-date stats back in late November and found that his play this year has been statistically weaker than every season since 2007-08 (which was the first season I could get the necessary data). I have added in the last five weeks of data and re-configured my graphs to make them a bit more reader friendly:

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Above is Henrik Lundqvist’s year-to-date 5v5 save percentage since 2007. This time around, I have removed all of the data from previous seasons and condensed them into three descriptive stats: minimum, average, and maximum. Continue reading “Reviewing Lundqvist’s Year-to-Date Stats, January Edition”

Lundqvist’s year-to-date stats compared to previous years.

I looked at how Henrik Lundqvist’s play (a) has compared on a year-to-year basis and (b) how it tends to progress on a year-to-date basis. I used 5v5 Sv% and expected goals saved above average per 60 mins (xGSAA/60) as my two metrics. Both sets of data came from Corsica.

I chose 5v5 Sv% because it tends to eliminate a lot of team effects. All situations Sv% can be drastically affected by special teams based on the systems play that a team employs (as well as the efficacy at pulling it off). Overall, 5v5 Sv% tends to map decently year-to-year so it’s a good metric to look at as a measure of skill.

jzsquch

I chose xGSAA/60 because it helps address the issue of shot quality. xGSAA/60 basically looks at the types and distances of the shots taken and determines how many goals a hypothetical league average goalie would give up that night (ie, expected goals). By comparing this expected goals number against Lundqvist’s actual goals allowed number, we get an idea of how he performed against a league average baseline. The “per 60 mins” part helps to normalize for time in net. This stat is also only measuring 5v5 play.

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I wanted to emphasize Lundqvist’s play this year against previous years as a composite so I chose colors that aren’t well differentiated for previous years (ie, 2007-16). However, if there is interest in having all of the years differentiated I can fulfill that request.

My observations:

  1. Lundqvist isn’t doing well this year. His 5v5 Sv% is among the lowest of his career for this point in the season and his xGSAA/60 through yesterday is the worst of his career. There is some teeth to the idea that he is not playing at the same level as before.
  2. His xGSAA/60 this year is very close to 0, suggesting that he is overall playing at a league average level during 5v5 play.
  3. The idea that he is a slow starter is only true for the last few years. Earlier in his career he had solid starts to the season. There’s also a noticeable dip in almost every year for December, which is likely him cooling off from what looks like to be a lot of hot Novembers (just not this year).
  4. His two best years by both stats appear to be 2015-16 and 2012-13. One year he received no votes for the Vezina while the other year he finished 2nd in voting. The Vezina voters really aren’t good at their job.

Honestly, I think it’s very fair to say we are seeing a below average performance from Hank relative to what we expect from him. This year he is facing a pretty normal mix of low-, medium-, and high-danger shots. It’s not like last year where the very high average shot quality he faced gave him average traditional stats and amazing underlying stats. Given the fact he’s coming off such a stellar season, I have a lot of hope that he can bounce back and play at a really high level this year.

However, going by the eye test I am at least a bit worried. There definitely have been games where he has let in total stinkers. And not just one stinker in one game, but a few stinkers in a few games each. But he still has long stretches where he plays solidly and makes great saves. Nonetheless, I would say there is not anything in particular that I see as an explanation for his poor play. No apparent injury or major changes in style of play. As far as I can tell, he’s more or less just playing more sloppy than usual.

Something I might investigate in the future is his progressive win threshold % (WT%) and loss threshold % (LT%). WT% is basically a measure of how often a goalie “steals games” and LT% measures how often they let in so many goals that the team in front is very unlikely to overcome it. Both are based on per game expected goals and goals against numbers. And at least for last year, he was absolutely elite by those numbers. One of the best in the NHL for both stats.

Dissecting the Odd Salary Structure of Hampus Lindholm’s Contract

Per Cap Friendly, Lindholm’s new contract has a rather odd salary structure that may confuse a lot of people:

Year Salary
2016-17 $3.00m
2017-18 $6.00m
2018-19 $6.75m
2019-20 $5.25m
2020-21 $3.75m
2021-22 $6.75m

We have generally grown accustomed to deals that are in some way flat, i.e., they may have a rising salary, uniform salary, or decreasing salary with term. And we have begun to grow used to either a salary drop in 2020-21 or an agreement that places most of that salary in signing bonuses. This latest tactic is “lockout-proofing” of contracts. So what gives with Lindholm’s tumultuous structure?

Variability Rules for Multi-Year SPCs

After all of the front-loaded deals helped set the 2012 lockout into motion, the Collective Bargaining Agreement (CBA), a labor contract between the NHL and the players’ union known as the NHLPA, came to include rules that were meant to eliminate such practices. One such set of rules is found in Section 50.7 of the CBA: Variability Rules for Multi-Year Standard Player Contracts (SPCs).

Paragraph 50.7(a) introduces the idea of “Front-Loaded SPCs.” Front-loaded SPCs are basically those aforementioned contracts that set the lockout in motion. A classic example is Marian Hossa’s contract:

Year Salary
2009-10 $7.90m
2010-11 $7.90m
2011-12 $7.90m
2012-13 $7.90m
2013-14 $7.90m
2014-15 $7.90m
2015-16 $7.90m
2016-17 $4.00m
2017-18 $1.00m
2018-19 $1.00m
2019-20 $1.00m
2020-21 $1.00m

The original intention of these deals was to drive down the cap hit of the contracts by adding on low salary years at the end of the contract that the player would skip over by retiring. The 2012 CBA negotiations sought to eliminate these contracts by (a) limiting contracts to 8 years max and (b) introducing rules for how salaries can be structured on a year-to-year basis.

So paragraph 50.7(a) introduces the following limits on Front-Loaded SPCs:

  1. Maximum of 35% change from year-to-year.
  2. Maximum of 50% change from highest-salary year to lowest-salary year.

It’s pretty clear that the Hossa deal would violate this agreement if it were signed today. And it appears at first glance that the Lindholm contract does as well. After all:

  1. It has a maximum year-to-year change of 50%, and
  2. a maximum highest-salary to lowest-salary change of 56%.

Then why was this contract allowed to go through? Well, that lies in the definition of a Front-Loaded SPC. The following process for determining if a contract is a Front-Loaded SPC is spelled out in items 50.7(a)(i)(A)-(E) of the CBA:

  1. Add up the total salary (including bonuses) of the first half of the contract. (Note: if there’s an odd number of years, take half of the “middle year.”)
  2. Divide the combined salary of the first half of the contract and divide it by half the number of years of the contract.
  3. Compare against the AAV of the full contract.
  4. If the “first half average salary” is greater than the AAV, then you have a Front-Loaded SPC.

So let’s go through this process with Lindholm:

  1. We know he has a 6-year contract with an AAV of $5.25m.
  2. So adding up and averaging the first three years of his deal: $3.00m + $6.00m + $6.75m = $15.75m.
  3. $15.75m / 3 yrs = $5.25m / yr
  4. $5.25m / yr is not greater than the AAV ($5.25m), therefore this is not a Front-Loaded SPC.

Thusly, we need to refer to the next set of rules to see what actually governs the salary structure of Lindholm’s contract. Paragraph 50.7(b) applies to all non-Front-Loaded SPCs and states:

  1. The difference in salary between the first two of the SPC cannot exceed the lower of those two salaries.
  2. A year-to-year increase cannot be greater than the lower salary of the first two years of the contract.
  3. A year-to-year decrease cannot be greater than 50% of the lower salary of the first two years of the contract.

Putting It All Together

It’s clear to see that there are many things going on with Lindholm’s contract here. To quote Walter Sobchak from The Big Lebowski, “It’s a Swiss fuckin’ watch.” Every single year is tangled with a requirement from at least one of the rules.

For starters, the first three years must sum up to no more than $15.75m in order to avoid having an average salary that does not exceed the AAV ($5.25m) of the entire contract.

Next, the first two years are specifically chosen to ensure that all of the year-to-year variability follows suit. The $3.0m and $6.0m salaries set the maximum year-to-year decrease at $1.5m (half the lower of the two salaries) and the maximum year-to-year increase at $3.0m (equal to the lower of the two salaries).

With the first two years set at a combined $9.0m, that means the third year must be $15.75m – $9.0m = $6.75m.

From there, the contract dips down as much as possible year-to-year for two years in order to create the lowest possible salary in the expected lockout year (2020-21). After two straight $1.5m decreases, the contract takes on salaries of $5.25m and $3.75m in the 4th and 5th seasons, respectively.

Finally, the last season is an attempt to have the highest possible salary, which leads to the maximum potential year-to-year increase of $3.0m. This puts the final season of the deal at $6.75m.

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Relationship between different Year 1 salaries and their resultant Lockout Year salaries for Lindholm’s contract.

Every single year is optimized here. Increasing the value of the first two years results in less lockout protection, no matter how you try to arrange the salary structure within the rules. (E.g., I increased the first two years to $3.25m and $6.5m and ended up with $3.8m in the lockout year, which is $50k more than in the actual contract.) Similarly, dropping the values of the first two years will result in some exceedingly suboptimal salary structures. (E.g., I dropped the first two years to $2.75m and $5.5m, which resulted in a salary of $4.75m in the lockout year, which is not at all desired.)

Concluding Thoughts

So ultimately, we see a pretty interesting salary structure that at first glance appears funky. But after going through the applicable rules, we can see that each year is a carefully designed puzzle piece to fit this specific puzzle. Now remains only one question: Why not avoid all this nonsense by just committing all but $1m of his salary in the potenital lockout year to a signing bonus? That would have afforded more protection and without the funky contract numbers.

A Detailed Analysis of the Brassard for Zibanejad Trade

by @Chris_Beardy

The Rangers and Senators made a very noteworthy trade on June 18, 2016:

In this post I will evaluate this trade from the perspective of a New York Rangers fan. I plan to evaluate the following aspects of this trade:

  1. Statistics-based performance review
  2. Statistics-based usage review
  3. Brief “eye test” statements
  4. Contract, cap, and asset considerations
  5. Concluding remarks

1. Statistics-Based Performance Review

Unless noted otherwise, all of the charts to follow were constructed using 2014-16 data for 5v5 situations with zone-, score-, and venue adjustments where applicable. The data has been sourced from Corsica. I will frequently use stats that say “/60”, which means the stat is adjusted to “per 60 minutes of time on ice.” This addresses any difference in time on ice by these players.

Here are some basic player data just to set the stage:

Brassard Zibanejad
Age 28.8 23.3
Height 6’1″ 6’2″
Weight 205 lbs 220 lbs
Shoots L R
GP 241 230 ( + 6 AHL)

Continue reading “A Detailed Analysis of the Brassard for Zibanejad Trade”

Estimating Arbitration Salaries Using JT Miller’s Contract Extension

By @Chris_Beardy

J.T. Miller became the first of four arbitration-bound New York Rangers to ink a deal. On July 13th, he signed a 2-yr, $2.75m AAV contract, leaving him just one year shy of UFA status. Many have proclaimed this contract is a steal for the Rangers, but I think it is right on point. I also believe it will provide a benchmark for many of the other players lined up for arbitration right now. Thus, I have used Miller’s contract to develop a simple cap hit prediction model for those other players.

Miller is being paid at market value.

@HockeyStatMiner wrote a great article for Blueshirt Banter in May that predicted:

Continue reading “Estimating Arbitration Salaries Using JT Miller’s Contract Extension”

Current Accrued Cap Advantage by Team

Above, in the featured image, you can see what I believe is an accurate set of data about teams with cap advantage currently on their books. All of the points represent the level of cap advantage currently accrued by the off season of any given year. For example, the Chicago Blackhawks have $31.6m in cap advantage on their books at the time of the 2016 off season. This number will be true until the first day of the season (Oct. 12), when the AAV and salary numbers stick ticking up for the 2016-17 season. I have tried graphing the correct day-to-day changes of the contracts, but it just comes out overly complicated. It’s only really important when either trades or contract terminations occur mid-season; that makes up only about 25% of events that affect cap advantage accrual to date.

You can find an interactive version of this chart here.

If there is a problem (or praise) you’d like to share with me about this different service I am trying out, please contact me at @Chris_Beardy on Twitter, by comment below, or even on Reddit at /u/ChocolateAlmondFudge.

Cap Advantage Recapture Penalty, Part 4½: The Predators Might Be Safe After All

@Chris_Beardy

Yesterday I introduced Part 4 of my series on the Cap Advantage Recapture Penalty (CARP), detailing a way the League could help the Predators out of their Shea Weber cap advantage situation using available cap space in previous seasons. Today I will provide a more simple and perhaps more likely solution to the Predators’ possible future woes.

(Just a quick note, my first, second, and third posts on this topic can be found at the links provided. I highly suggest giving them a read if you need some background info on what the CARP is and how it works.)

The Collective Bargaining Agreement (CBA), which introduced the CARP has a rather straightforward passage that might be interpreted to help the Predators:

Section 50.5(d)(ii)(B)(2):Notwithstanding the provisions of Sections 50.5(d)(ii)(A) and (B), in the event that any such Long-Term Contract is Assigned during its term, each Club for which the Player plays under the terms of that Long-Term Contract shall be subject to being charged with any and all “Cap Advantage Recapture” amounts it receives pursuant to that Long-Term Contract, provided, however, that if a Club Traded a Long-Term Contract prior to the execution of this Agreement (including any binding Memorandum of Understanding) under which it gained a “cap advantage,” the “Cap Advantage Recapture” shall not apply to that Club for that Long-Term Contract. For purposes of clarity, the Club to whom such Long-Term Contract was Assigned after the execution of this Agreement (including any binding Memorandum of Understanding) shall be subject to the Cap Advantage Recapture (if any).

[emphasis in the original text]

To put it more simply: Contracts that could incur a CARP that were acquired by trade prior to the signing of the 2013 CBA will not accrue cap advantage against the recipient team.

Continue reading “Cap Advantage Recapture Penalty, Part 4½: The Predators Might Be Safe After All”

Loophole Avoided: Growing the Performance Bonus Cushion with the LTIR Exception to the Upper Limit

One thing I’ve grown to appreciate is the ability of teams to find loopholes in the current Collective Bargaining Agreement. It’s fun to see how teams find a way to give themselves an upper hand over other teams (at least, until the other teams follow suit). Just now, while perusing the CBA, I came across a piece of text that could have easily been a loophole had the NHL not been more careful:

Section 50.5(h)(ii): A Club shall be permitted to have an Averaged Club Salary in excess of the Upper Limit resulting from Performance Bonuses […] provided that under no circumstances may a Club’s Averaged Club Salary so exceed the Upper Limit by an amount greater than the result of seven-and-one-half (7.5) percent multiplied by the Upper Limit (the “Performance Bonus Cushion”).

The key here is that the Performance Bonus Cushion is an allowed exceedance over the Upper Limit (more popularly known as the cap ceiling or salary cap). It does not actually change the Upper Limit. This is also the case for the Bona Fide Long-Term Injury/Illness Reserve, typically referred to as the LTIR. It is described in detail in Section 50.10(d) of the CBA:

Section 50.10(d): […]  the [LTIR] replacement Player Salary and Bonuses of such additional Player(s) may increase the Club’s Averaged Club Salary to an amount up to and exceeding the Upper Limit, solely as, and to the extent and for the duration, set forth below […]

Just like the Performance Bonus Cushion, the LTIR allows teams to exceed the Upper Limit, but does not actually change the Upper Limit for that team. So why is this a big deal?

orr-side-12393
A picture of Bobby Orr probably plotting something.The metal statue in the back is likely a prototype of his cybernetics before he attempts the full conversion.

Well, let’s make up a scenario where a team can expect to have a significant amount of performance bonuses to pay out for a specific year. Let’s say that in the near future, bionic technology is mastered and Wayne Gretzky and Bobby Orr are both implanted with cyborg technology, allowing them to play at a level beyond their peaks during their dominant careers. They’re both 35+ and thus can qualify for performance bonuses of up to a maximum of $2.85m each. At $5.7m total in bonuses, you’re already at 7.8% of the 2016-17 Upper Limit of $73.0m. So what could you do? Well, if the LTIR actually changed your team’s Upper Limit then you could maneuver a player or two onto the LTIR to create $3.0m worth of cap relief. This would up your Upper Limit to $76.0m and increase your maximum allowed Performance Bonus Cushion up to exactly $5.7m.

More realistically, we see a team that has an Aaron Ekblad type of player on an Entry Level Contract (ELC) as well as a Jaromir Jagr level talent on a 35+ Standard Player Contract (SPC). And in addition, you have other lesser players on ELCs and 35+ SPCs that reach only a fraction of their potential Performance Bonuses. For example, Michal Roszival got $200k for reaching his games played threshold in 2015-16 with the Blackhawks while Teravainen made $850k for reaching various bonus milestones that same year. Panarin earned the maximum of $2.85m for the bonuses he earned. So the need for additional Performance Bonus Cushion wouldn’t be too far-fetched in my opinion.

Fortunately, this loophole is addressed with the nature of the CBA. These two mechanisms seem to have been carefully constructed to avoid this sort of shenanigans. (In addition, the Performance Bonus Cushion overage ends up rolling over to the next year’s salary cap so my hypothetical situation would have repercussions.) However, there are many incredibly smart individuals out there now working on ways to break the system for their own benefit and it will be very exciting to see how they do it.

The Cap Advantage Recapture Penalty: Part Four

@Chris_Beardy

I originally started researching and writing about the Cap Advantage Recapture Penalty (CARP) in relation to Shea Weber trade rumors last summer. It was pretty shortly thereafter that I started bandying about the phrase “Shea Weber is untradeable.” The liability of the potential CARP looming over a small market franchise like Nashville would be too great, especially considering the significant likelihood that Weber will decide not to play until he’s 41. But it happened and now I’m wrong about that. (Well, not about the CARP stuff so read on…)

(Just a quick note, my first, second, and third posts on this topic can be found at the links provided. I highly suggest giving them a read if you need some background info on what the CARP is and how it works.)

However, the exciting thing is that now everyone is talking about the CARP and want to learn more about it. I still cling to my viewpoint that the NHL has done no wrong in creating this cap mechanism. The Predators (a) chose to match the offer sheet, (b) were a party to the creation of the current CBA including the creation of the CARP, (c) chose not to buy him out with their compliance buyouts, and (d) chose to trade him with $24.5m of cap advantage sitting on their books. They made multiple conscious decisions to not limit their liability to this penalty. But, I can’t ignore the fact that others are right about how the NHL will not let a small market team, especially one that is such a major success story in their push to hockey-fy the South, be crippled with a penalty that could easily set the franchise back 5-7 years. Thirty other owner groups / GMs might say “tough nuggets” to them, but Bettman will certainly do what it takes to maintain 31 strong teams and markets in the league.

How the NHL might undo Nashville’s CARP

Continue reading “The Cap Advantage Recapture Penalty: Part Four”