Sunday, July 13, 2008

Vinnie Signs

Well, Caps fans, Vincent Lecavalier will be a Tampa Bay Lightning for life, unless one assumes life begins at 40.

Lecavalier agreed to terms yesterday that will pay him $85 million over 11 years, extending to the eve of his 40th birthday in the 2019-2020 season.

The deal is interesting for in the way it is weighted. The payouts look like this…

As the TSN article notes, there is benefit to Lecavalier in that if he chooses to retire in the latter stages of the deal, he will have collected most of the value of the contract. In a way, this deal resembles the signing bonus/salary deals of the NFL, where elite players’ contracts are generally heavily front loaded by the guaranteed signing bonus. The player gets his money (well, in that first year of the deal, anyway), and the club has some flexibility on the back end to move or cut the player.

What flexibility exists for the Lightning in this deal probably depends more on the continued growth of the league. It is possible that the structure of the deal would give the Lightning the ability to add assets (if they are competitive) or to use Lecavalier as a trading asset (if they are not, to assemble draft picks/prospects). If the salary cap grows by three percent per year over the course of the deal – and yes, the cap has risen more rapidly in the years since the lockout – his cap hit would be less than ten percent of the cap in the 2019-2020 season (about what Wade Redden’s hit will be in the last year of his deal with the Rangers in 2013-2014, or Kimmo Timonen’s deal with the Flyers in 2012-2013), and the cash outlay would be attractive.

The flip side of this is that mega deals of the sort signed by Lecavalier and Alex Ovechkin depend on precisely that continued growth in the league and its revenues. That is the risk the clubs take. If one is bullish on the long-term prospects of the NHL, these deals are bargains over their lives. But if that optimism ends up ill-placed…

On balance, though, this deal looks a lot better for the Lightning than any other deal they’ve made so far in this off season. And it seems to be the latest example of a trend in mega deals…those signed by the likes of Lecavalier, Ovechkin, Mike Richards (12 years with the Flyers), and even Rick DiPietro (15 years with the Islanders). Draft the cornerstone, and keep them. Compare that to the kind of deal the Capitals signed with Jaromir Jagr (seven years, $77 million, with an option). In retrospect, that one had the look of buying someone else’s treasure. With this quartet, they are part of the family from the start.