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With the big news of PK Subban signing his 8 year contract extension worth 72 million dollars it has raised questions for some people. Is he overpaid? Does a 9 million dollar cap hit make sense? Is he really better than Shea Weber, Ryan Suter, and other top defensemen?
The most important thing to remember is that these are new contracts for a new era. You cannot judge and compare star players' contracts from the last CBA to the brand new one that was just agreed to in 2013.
Let's start by taking a look at both Sidney Crosby and Evgeni Malkin's contracts and how they are structured to show the differences
Despite having the higher cap hit of 9.5 million Evgeni Malkin will make 10 million dollars less than Sidney Crosby will in the first 8 years of his contract. There are a few reasons for this. The main theme is going to be that you are not allowed to back dive contracts anymore to lower the overall cap hit. The last three years of Crosby's contract have him making only 3 million dollars per season.
A big change in the CBA was that you cannot drastically change the amount of money you pay a player each season. You have to stay within a certain percentage from year to year.
*Salary variance: No more than 35 percent year-over-year and no year less than 50 percent of the highest year*
Crosby dropping from 9 million in the 2021-22 season to 3 million in 2022-23 season isn't allowed anymore.
Another reason it is impossible to artificially lower cap hits now is that 8 years is the new maximum any player can sign for (7 if it is with a new team). So even if these other rules didn't exist, only having 8 years to work with would hamper a team's ability to hide a player's cap hit anyways.
Now let's take a look at two of the bigger signings made at the defense position before the new CBA kicked in and compare it to PK Subban's new contract.
Once again we see the players who signed before the latest CBA raking in much more cold hard cash while maintaining a cheaper annual cap hit than a star player who recently signed.
Shea Weber will make 20(!) million more dollars than PK Subban will in the first 8 years of each of their deals, yet it is Weber who has the lower cap hit.
In a nut shell the point of this exercise is to highlight why you cannot compare contracts from different collective bargaining agreements. The way we look at contract values moving forward needs to change. Star players are going to command higher cap hits because there is just no way to artificially lower their impact anymore.
PK Subban counting 9 million against the cap seems like a really huge number and that is because it is compared to all other defense contracts. However, that is the cost of doing business these days. If anything, his 9 million dollar cap hit is probably at least 1 million lower than what he should be getting. PK Subban is more likely than not being underpaid.
One nice thing moving forward for the Penguins is that they have all of their big money players locked in for the long term. The Penguins were stung by not having the luxury of Crosby and Malkin taking a bridge contract while other teams like Chicago had a window of getting their star players "on the cheap". The advantage will start shifting back to the Penguins as more and more players start to have higher cap hits than both Crosby and Malkin. What once looked like an unfathomable contract number for Letang will start to look pretty good. Their contracts will become the bargains of the league. In order to take advantage of this whomever is running the Penguins hockey operations is going to have to use those savings properly. What was a disadvantage for a few years will be an advantage for Pittsburgh as we enter the next 5-7 years or so.
The key to making things work in this brand new salary structure is to pay the difference makers like Subban and not overpay for the kind of players that you can always find elsewhere. I have said it before and I am going to continue to beat this drum for a long time, don't pay a premium for average, don't fall in love with average, fall in love with excellence, pay for excellence.
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Brand new Hockey Hurts Podcast is ready for your listening delight. We cover PK Subban's new deal, Ben Bishop's new extension, as well as Nick Spaling. You can find the link to that podcast
here.
Thanks for reading!
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