Friday, June 27, 2008

Ten minutes...

"If someone puts an offer sheet in front of one of our players, we'll match it - probably in less than 10 minutes."

-- Capitals General Manager George McPhee

Yesterday at 5:00 pm, clubs could begin entering into negotiations with other clubs’ restricted free agents on new deals. And now we enter a gray area in the matter of the Caps’ most coveted prize – Mike Green. That gray area is the range of picks designated as compensation and that of the level compensation that might cause the Caps to think for a little more than 10 minutes about matching an offer sheet tendered to Green.

Consider an article written by Scott Cullen for In it, he lays out the compensation categories for restricted free agents and notes a few of the gems that could be available in each of those categories.

Where this starts to impact a player like Mike Green is in that hazy area of $5.2 - $6.5 million – where Green might see an offer sheet and where a free agent returns two first-rounders, a second-round pick and a third-round pick. Let’s look at this from a couple of different perspectives.

First, equivalence. Let’s say you’d look at this as a “trade.” And suppose – just suppose, mind you (The Peerless not being Eklund) – that this “trade” was with Edmonton. Further, let’s say that Edmonton, with Green, would be drafting in the middle of the first round the next few years. Would you trade Mike Green for Jordan Eberle (taken 22nd overall this year by Edmonton), Alexandre Plante (taken 15th last year), Jeff Petry (taken 45th in 2006), and Theo Peckham (taken 75th in 2006)?

You say you don’t know much about those guys? Well, GM’s do – a lot more than thee or me – and it is still an inexact science (that of evaluating the sort of talent you have to look at for the draft and in predicting where you might find yourself in the draft order).

Second, there is the matter of money, and here it gets even murkier (this is the grayest of the gray area). At the low end of the equivalence category for the picks coming in the scenario described above, you have the amount of $5,231,249. So, a team tenders an offer sheet to Green for seven years and $37 million ($5.285 million per year). If you’re the Caps, I suspect you don’t take those ten minutes, you inform the parties that you’re matching the offer, and everyone goes on their way.

OK, but what about at the top end of the range? There, the amount is $6,539,062. Let’s say that same team offers that seven-year deal, but instead of $37.1 million, it is for $45.5 million ($6.5 million per year). You’re only getting the same draft picks back – the two first-rounders, a second-round pick and a third-round pick – but you have the additional consideration of the additional $1.215 million in cap hit to consider.

Mike Green might be worth that extra $1.215 million – by himself – but you have to ask now if you are also going to be willing to cut loose or not re-sign a player you might have afforded (Brooks Laich?...Sergei Fedorov?) to accommodate that within the cap or, perhaps more relevant to the Caps – within your target budget.

In the end, I suspect Mike Green will be wearing a red sweater (no, not Calgary and not Carolina, not Ottawa and not Montreal, not Phoenix and not…hey, there are a lot of teams with red jerseys) come the fall. But I also suspect that the Caps are going to lose a name player or two in accommodating Green’s breakout season of last year. That’s all part of the new NHL, too.

GM’ing isn’t easy these days.


Cathy W said...

I have a question that I think you can answer. Since Green is going down the offer sheet road, what happens if a team gives an offer sheet and the Caps don't match it, must Green sign the offer sheet if it is from a team that he does not want to go to? If multiple teams make offer sheets, can Green choose which team or must he go with the team giving the highest offer?

Anonymous said...

in order for the offer sheet to count green has to sign it and then the caps can match if they want to. so he can only sign one offer sheet.