The question comes into play during every off-season. Every signing is accompanied by speculation, more so on price than talent itself. After last off-season saw Chris Drury, Daniel Briere and Scott Gomez land contracts worth over $7 million per year, the question will be asked even more and the speculation will be even more intense. As we all know, though many like to “sanitize” the way it is phrased, NHL players are property. As a result, whenever a player is available to be acquired, the question is the same. “What is he worth?”
Something’s value is completely subjective, as it depends on the buyer’s needs, assets and competition. The same holds true for the value of players. The value of Brooks Orpik to Detroit is not nearly as great as his value in the eyes of the Rangers. This is because the Rangers need a defenseman to play on their top line, while the Wing’s defense is so deep he would hardly make as a sixth defenseman. Additionally, as we saw at the trade deadline, Brad Richards was more valuable to the Stars than he was to the Lightning, primarily because Dallas could better afford his salary. In a free-agent pool, the price of a player rises when more teams need him and few players with comparable talent are available. It is simple supply and demand economics. As we have seen in past off-seasons, a player’s value to the team he signs with is almost always more than his “accepted value,” or what most people believe he is worth. What he is being paid is known as “market value,” or what it takes to acquire him in the open market. The arguments about specific signings are generally centered on the accepted versus market value conflict. While both sides are correct and are merely referring to different ways to quantify a player’s value, market value is what matters as far as practical application goes.
Market value has skyrocketed since the salary cap was introduced. The cap was supposed to force players to accept their accepted value in order to rectify the ills of the pre-lockout format. However, salaries have gotten more and more inflated as the post-lockout era has progressed. If the NHL is viewed as a business market, the causes that have forced salaries up become apparent. It all begins with the diluted talent pool. Since the expansion era ended (or so we hope), all 30 teams have been unable to fill all 20 lineup spots with quality players. The past few seasons have shown us the success is very dependant on depth, a virtue that is hard to come by. Third and fourth line forwards are often more tyrant than talent. Elite players can be counted on one’s fingers and there are certainly not enough to go around. In business terms, the supply of talent is low and the value of lower tier players goes up. As a result, paying $5 million for a second line player seems about as reasonable as paying $3 per gallon. Like gas, there isn’t enough talent for everyone to fill up and teams scramble to sign what they can. The other players then compare themselves to similarly talented players and demand similarly inflated salaries. The whole thing forms a cycle until prices are blown way out of proportion and market value is nowhere near accepted value. Unless more talent in quality and quantity is on the way, supply will continue to run low and salaries will stay high.
Parity is also a major contributor to escalating salaries. The manifestation of Social Darwinism causes parity to be an inherently unstable condition. When teams are on such equal footing, they try much harder to gain an edge. Competition is one of the factors that forces teams to spend more, especially when there are so many others to compete with. If there is an opportunity to gain a competitive edge, it must be seized, even if it requires overspending. When gaining an edge is so much harder, it becomes even more imperative to do so. In other words, advantage is low in supply and high in demand. The value of an advantage is so great, and the value of players who can provide that advantage is exponentially so. Once again, because parity in and of itself breeds high prices, it is virtually impossible to stabilize the market value.
The biggest problem, and the one that is most overlooked, is the rising salary cap. It is a win-win situation for it to keep rising, as players get more money, owners can spend more on talent and league revenue is growing. The hidden problem it presents is its role in the inflation of player salaries. If the cap rises $4 million, teams will be able to afford to ensure that they win a bidding war, even if they need to pay more than the accepted value to do so. Additionally, as market value rises with the cap, teams see and opportunity to buy cheap and early. Five years and $10 million in cap space later, paying Scott Gomez $7 million per year will not seem so lucrative. The players market has yet to hit its peak and teams that ink long term deals now will have saved money. Market value this year will be dramatically less this year than it will be in five year’s time. Teams are happy to overpay players because not only will their cap room go up next season, but the deals will look like steals in the future. Therefore, if the cap continues to go up, salaries will continue to rise, but if it stops where it is, the market value will stabilize and better reflect players’ accepted values.
As we head to toward July 1st and the start of free agency, we once again begin to debate the value of players. As we head toward the future of hockey, we must begin to debate if rising salaries are good for the sport or a return to pre-cap spending. There will be lucrative contracts handed out en masse this off-season, and while it may help certain teams now, it may very well hurt the league and the sport in the future.
Discuss in the forum