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"Talking New York Rangers Hockey, since 2007"
New York, NY • United States • 23 Years Old • Male
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
Filed Under:   talent   parity   cap   salaries   rags2riches   rags2riches   UFA  
June 12, 2008 9:31 PM ET | Delete
Teams overpaid FAs long before the salary cap. The NHL is headed to Lockout2, because they are forcing teams to spend to a salary floor, but have no real revenue sharing program in place. There's several teams that spend more now than they did, pre-cap.
June 12, 2008 10:02 PM ET | Delete
This is a great blog - you really lay everything out nicely. Players ARE like property and their value definitely differs from team-to-team. You mention Brooks Orpik - the Sabres are big on him too, but I fear a bidding war. To which case a team like NY will probably get him.
June 12, 2008 10:03 PM ET | Delete
btw you're also write on that this is NOT good for the league. NOT AT ALL. another lockout is almost certain a few years down the road and as i fan i am not happy about it.
June 13, 2008 9:08 AM ET | Delete
great blog. I think this points right to the fact, like Millertime said, that we're headed right back to a lockout. A team like the Columbus Blue Jackets simply cannot make money if they want to be competitive, and if they want to make money they're in the basement because they have no talent, which leads to pathetic ticket sales. The same could be said for a number of teams. Hockey will never be respected on a national level in the US until we get our house in order.
June 13, 2008 9:44 AM ET | Delete
Great Blog! I'm not sure the Nhl will go into another lockout, but we may need to see teams that can't make it finally move. A team like Columbus has tons of fan support but McClean ran the team into the dumps with poor choices. They are a victim of expansion,with a virtutal eastern conference club playing hockey games in the west. Unlike the Wings who are in the same boat,the Jackets don't have national support like the Champions.The cap also forces these teams to spend instead of cry.
June 13, 2008 10:52 PM ET | Delete
Briere is making $6.4 Million, not $7 Million like Gomez and sucky Drury.
June 14, 2008 11:53 AM ET | Delete
Yeah because Briere is only getting 2 3 million on the last 2 years. But I guess your the cap hit is the only thing that really matters.Bettman's heading us towards another lockout..TV ratings are still pretty abysmal, especially on VERSUS. Some teams are still playing to half-empty buildings, Our economy is in the shit... cities like Chicago, Detroit, Columbus, etc... are going to be hit even harder. It'll be hard for people to shell out a $100 bucks a game. But for some reason lets raise the salary Cap by 16 million in 3 seasons. Retarded.If you thought the contracts last year we're bad.. wait til this year.Mike Green is going to get over 5 million. He's awful in his own end, but went on a torrid scoring pace for 40-50 games. Why does market value go up every year...even when our dollar is regressing? The owners almost have to spend to the Cap if they want to be competitive but the small market teams are going to killed eventually.
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