Monday, July 27, 2015

Hockey: Adventures into Contracts

I've been a hockey fan for quite a while, but I've really only been a serious fan of an NHL team for slightly over a year. Last summer's project was to learn the basics of advanced stats. This summer's project? Contracts. There's a lot to them and, in this salary cap era, they're an integral part of any team's existence. I'm also very nearly clueless about them once you get past a vague sense as to what makes a contract good.

The Players

It all started out, as anything hockey-related does for me, with the Habs. This season the Habs had a number of contracts to extend, of most interest to me in terms of learning about contracts were Christian Thomas, Jarred Tinordi, Michael Bournival, and Brian Flynn (all Restricted Free Agents). I was also most anxious to find out whether or not the Habs were going to re-sign promising Swedish defenceman Magnus Nygren.

Tinordi, Thomas and Bournival were eventually signed to two-way contracts, Beaulieu and Flynn to one-way 2 year contracts at $1M and $950,000 respectively. (Galchenyuk and Nygren were both given qualifying offers, though as of the time of writing, neither have re-signed. Please get on that, oh best-est of GMs.)

My Questions

  • What is the difference between one and two-way contracts?
  • How much salary can you "bury" in the AHL?
  • Who has to be sent through waivers to play in the AHL?
  • What the heck is going on with Magnus Nygren?

The Resources

Andrew Berkshire, who until very recently, was the managing editor of one of the best Habs websites on the internet, was a huge help to me in my quest to find these answers. Through him, I was introduced to quite a number of people who provided extremely helpful summaries or websites on the information I wanted.

For anyone interested, these are the sites I found most helpful:

Beyond those, there are of course, the ever helpful and amazing sites which have stepped into the void left by Cap Geek: Hockey's CapGeneral Fanager, and Cap Friendly among others.

What I Discovered

It turns out that the differences between two-way and one-way contracts are a lot simpler than I thought and have nothing to do with waiver eligibility. Two-way contracts simply mean that in the NHL the player will receive X amount, while in the AHL he'll get Y (which is less). For example, Bournival will receive $600,000 a year if he plays in the NHL, while he'll only be paid $125,000 in the AHL. 

A one-way contract means that the player will receive X amount of money regardless of where he plays. (So if Beaulieu gets the yo-yo treatment this year, it won't have anything to do with managing the cap, as I suspect it largely did last year, since regardless of where he plays he'll get $1 million a year.)

It also turns out that the exact salary you can completely bury in the AHL is $950,000. It could prove awfully convenient that Flynn's contract is exactly that much.

Waiver eligibility is a bit more complicated, and is decided by age signed/years from signing and games played at the NHL level (whichever is reached first), as is shown in this handy chart from the reddit feed on contracts.

Flynn (26, 3 years from signing), Bournival, Thomas, and Tinordi (all 23 and 4 years from signing) would have to be sent through waivers (and potentially lost for nothing) to play in the AHL. So chances are we won't see as much yo-yoing going on with these guys as we have in the past.

As to Magnus Nygren, he got a qualifying offer, so his rights still belong to the Canadiens, but he's already signed with F√§rjestad so I'm not 100% sure what that all means in the long run. (If anyone wants to clarify, please feel free to do so!)

So there you have it. All the things I have learned so far this summer about NHL contracts. I hope you found it interesting and/or informative. Also if I've made a mistake anywhere please do point it out to me. I'm still learning, and have a terrible head for numbers.

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