Tuesday, February 16, 2010

The Power of the One Way Contract

One approach the Oilers might take to determine whether they can expect to qualify for the playoffs next season would be to slot their players into the hypothetical positions they would fill on a true playoff team. Take a realistic view of their team and players, and designate those players into the role they might fill on a current Cup contender - not a borderline playoff team. Don't base the assignment upon vastly improved projections, or how good the player was 5 years ago. I plan to go through the roster in this fashion over the Olympic break, to see if it's reasonable to expect the Oilers can become a playoff team for next season.

For now, I want to examine the end of the roster in terms of forwards. Just one man's opinion, but I think if your 12-14 forwards are three of Potulny, Stortini, Stone, Pouliot, you aren't eliminating yourself from playoff contention. As such, if they can be signed for reasonable, or better yet cheap, terms, I don't think it would be a horrible plan to lock a couple of these players up for 2 or 3 years. This idea isn't new, in fact YK Oil wrote about this general idea in a fantastic article about a year ago*. Maybe there's an argument to be made that the Oilers would be better off to clear out the one-way contracts and let players battle for the spots. Or that they should bring in some veterans for at least one of those roster spots. I think it depends how much money the above players are willing to sign for (Stortini excepted, as he's already under contract for a 700K cap hit next season).

Since these player types can be pretty replaceable league wide, I don't know how much it matters that you hold on to any of these 4 players, specifically. Sure, Pouliot could find his offence from junior, but so could another similar player from a different team.

The three unsigned players represent a place where the Oilers could start structuring their roster and cap room for next season. It might be unusual to start from the bottom of your roster, but those are RFA players who may be more receptive to doing something contractually before some of the other RFA's. By starting with these players you might get a more concrete picture of exactly how many roster spots and exactly how much money you have to work with to fill those remaining roster spots.

Something I would consider is to approach the agents of the three players and say something along the lines of** "We are happy with the performance of your player, and these other two players, but aren't sure that we necessarily want all three signed to one-way contracts. We would be quite happy to have two of them signed to one way contracts, and maybe all three, but it's possible one of the three guy could be left hanging as far as a one-way contract when July 1st rolls around. So, we are going to each agent now, with our offers for two (maybe three, this might vary for each player) year one-way contracts. If you want to negotiate on term or amount, that's fine, but be aware that if the other players sign one way contracts first, it's possible your client's roster spot may be spoken for."

This approach will likely only work with those players who believe you will walk away from them. And you may only be willing to take this approach with a player that you are prepared to walk away from, one that you think is more or less replaceable via the UFA market for similar money.

I would offer Stone a 3 year deal worth 500-550K per season. Maybe he takes it, maybe he doesn't. The power of the one way contract comes from guaranteeing money to a player that hasn't seen a ton thus far from his hockey career. 1.5 mil is a lot of money for a guy like Stone, who's been up and down between the minors since turning professional. I wouldn't be surprised if he took that, or tried to negotiate for more per season, but would be willing to take something slightly more than that amount.

The Oilers have been willing to do so in recent years for players about to become waiver eligible, but they haven't yet used this approach (as far as we know, maybe they have and we haven't heard about it?) for players that have established themselves, at least a little bit, at the NHL level.

I think the negotiations would likely be more contentious with Pouliot and Potulny, for somewhat different reasons. Pouliot has been in the NHL for awhile on a one way contract, and may feel insulted by something like that, no matter how nicely you phrase your position.

Meanwhile, Potulny has performed so well this season that your position of power re: the one-way contract may have been eroded. His agent may well convince Potulny that (a) you will qualify him, and any suggestion otherwise is an empty threat (b) even if you walk away, some other team will offer him a one way deal. I'm not sure that teams realize how valuable the offer of a one way contract might be to a player like Potulny. Sure he's put up some goals with Edmonton, but how sure is he that if he goes UFA he'll get a one way contract for more than Edmonton's offering? If you offer him, a player who hasn't spent a full season in the NHL yet at age 25, a three year, one-way deal for 600-700K per season, you'd imagine that like Stone it would appear like a lot of money to turn down. Maybe he can get more, but it's a lot to turn down.

I think that, in spite of the number crunch up front, if you could get Stone signed for 550K, Potulny, Pouliot, and Stortini for 700K each, you'd have started to achieve what Edmonton needs to start doing at the bottom of their roster - finding competent players that do not cost much more than the league minimum. There may be a side benefit to taking this approach over the Olympic break. If you start to crystalize next year's roster now, it may increase your clarity with respect to decision making at this season's trade deadline.

* = In the initial posting of this piece, I had not mentioned that YK Oil wrote about this about a year ago. I had forgotten that I'd read his article, or I'd have included a link to his material mentioning his post in my initial piece. My apologies YK, it was absolutely not intentional on my part to not give credit where it was due.

** = You might need to word things somewhat differently, more or less aggressively, with each player/agent, as the Oilers don't have identical leverage/situations with each player.


Scott Reynolds said...

This is a good idea Speeds. I like all three guys enough that having them locked in at the bottom of the roster doesn't bother me at all. They're all young enough that they might improve too, and if they do, they can be moved up the lineup. Three year contracts in the 500k-700k range carry very little risk to the team, especially if one is permitted to dump a small contract in the minors (which this team already did once with Roy). Because of their age, I might even be tempted to go for longer term if the players are willing to take it.

Black Dog said...

good stuff speeds

it might be the Olympic Fever talking but I remain convinced that Patrick Thoresen can play in the NHL and would return if you offered him a similar contract, not sure what he makes in the KHL but he's a guy I'd go after, nice versatile end of roster guy

speeds said...

I think a guy like Thoresen says something about the replacability of the guys in question, and why it probably doesn't make sense to pay a bunch of extra money to keep "your" guys.

Thoresen in particular may be a bad example, now, but he was probably good enough that he should have been able to find a job somewhere. But, with his elite level performance in the KHL, he might now command a high enough salary in the KHL that's he's priced himself out of the NHL unless he wants to take a pay cut to come back to the NHL.

Lowetide said...

On the other hand, if the Falcons had some forwards pushing the incumbents (even at the outer edges) that would strengthen the bargaining position.

Great post, speeds. Looking forward to the rest in the series.

speeds said...

That's true LT.

I'm now remembering that YK Oil wrote about something like this awhile ago, and one of his points, from memory (I'd include a link if I could find it. I'll add it if I can find it later), was that it's pretty inexpensive to make mistakes on contracts like this at the bottom of the roster.

If you sign Stone to a 500K contract and he doesn't improve or show that he'll ever be more than a 4th line/press box guy, that's OK. Not ideal, but it won't really hurt you. Even if he becomes a press box regular, some forwards have to be your 13th/14th forwards (if you choose to carry 14) and what's wrong with that player being a guy who makes the league minimum?

If injuries get serious and you have a better player in the AHL who isn't on a one way contract, you can always recall that player, insert him into the lineup, and leave Stone in the press box.

speeds said...

I changed the article a bit to reference and recognize YK's earlier post which I had read but didn't remembered while writing my entry. My apologies YK, I don't want anyone to think I'm intentionally ripping your material; I simply forgot that I'd read about this idea before or I'd have included the link and credited you to begin with.

I included the link in the updated article, but include it here as well:


Oilmaniac said...

"I think a guy like Thoresen says something about the replacability of the guys in question, and why it probably doesn't make sense to pay a bunch of extra money to keep "your" guys."

- great point!

LT, I have to respect your opinion of the falcons as being much more educated than my own but am left wondering who, outside of reddox, you could seriously feel is pushing their way up from the farm..

General Question: Who gets bumped with Eberle potentially coming in on the RW.. does this bump Storts (who plays a much different role - very little depth in that role).. Just another way of complicating the discussion around the bottom 6, combined with the question of who is going to be the 7-9?!..

Black Dog said...

oilmaniac - I think LT is saying that the Falcons have no such players - as he says 'if they had' players pushing

right now they pretty well do not

Oilmaniac said...

BD, thanks for pointing out my misconception...

doritogrande said...

A question regarding qualifying offers:

Is it possible to sign a player coming off a two-way contract (let's use Cogliano as an example) for less than the required 100% salary he earned last year, in order to assure him a one-way contract?

The reason I'm getting at this is that due to Cogliano's abysmal season could we guarantee him a one-way contract at 800K? Or would he have to reject a qualifying offer first?

godot10 said...

I disagree.

Unless the guy has special skills (i.e. fighting is a special skill), I don't think one should be offering 3-year contracts to 4th line players. Two years at most.

And I wouldn't offer Potulny, Stone, Brule, or Pouliot more than the qualifying offer, Potulny perhaps being the exception where I might offer two. Brule and Pouliot have been too injury prone to offer extended deals. And Brule's eventual replacement (Eberle) is arriving next year. Stone looks to have a wonky knee, and only has a handful of NHL games. Anything more than the QO would be a mistake without a full season of play.

The Oilers have Vandevelde, Nash, and Lander all likely close to ready the season after next for 4th line duty. And O'Sullivan and Nilsson still under contract, who can fill those 4th line spots next year, if you can't trade them (although I'm pretty sure that Nilsson will be bought out).

speeds said...


Yes, you could make that offer to Cogliano. But, Cogliano's QO has to be one-way because of his games played, so there isn't any incentive for him to take less.