Wednesday, May 31, 2006

The Six Million (plus or minus) Million Dollar Man

Bryan McCabe has reportedly signed a five-year deal with the Leafs, which includes a no-trade clause. The details beyond that are a bit sketchy (how great is it that the Leafs own web-site doesn't have any "official news" but does have a wire story from Bristol Connecticut that cites an ESPN report on the McCabe signing?)

Spackling togethter the various rumours, it's reported that McCabe will be earning somewhere between $5 million and $5.8 million a season for the next five years (there’s so much suffering in this world). Other reports have mentioned a non-movement clause, which would prevent McCabe from being waived (or part of an extraordinary rendition?).

When you consider that JFJ didn’t deal McCabe at the deadline and is widely reported as needing to make the playoffs next season in order to keep his job, the fact that he capitulated on all fronts to sign McCabe is about as surprising as Lindros suffering a catastrophic mid-season injury the Sens choking each Spring.

Did JFJ overpay? We’ll have a better sense of that once the other big free agent defensemen are signed this July. Until that date rolls around, here are a few things to consider before we can heap scorn further assess JFJ’s ability to misread the market:

  1. If next season’s cap is in the mid to low-40s, the Leafs will have tied up nearly 25% of their salary room in Kaberle and McCabe.
  2. Given the status of RFAs and UFAs it’s not a perfect comparison, but let's compare the Leafs salary structure with the four teams that made the semis this year. The salaries of the top 3 Leafs eats about 35% of an estimated mid-40s salary cap; the top 3 Ducks 30%; top 3 Hurricanes 28%; top 3 Oilers 27%; top 3 Sabres 16%.
  3. In 2005-2006, teams spent about 39% more time on the power play – a facet of the game at which McCabe excelled.
  4. The Leafs had one of the best power plays in the league and still missed the playoffs – clearly this is a team that has to do better at five on five hockey if there’s to be any measure of success in 2006-2007.
  5. NHL revenues are largely driven by gate receipts. This season, the average attendance rate was 92%. In 2003-2004 it was 89% and in 2002-2003 it was 90%. There’s no new mega-TV contract on the horizon and ticket prices can only increase a few points a year. It will be interesting to see how GMs with top-loaded payrolls (Hello Mr. Feaster, Mr. Ferguson) adjust in the event that attendance/revenue drops off by 3% or more and the cap shrinks accordingly. Escrow may take care of existing contracts, but those near the cap will have little room to move...


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