Thursday, September 30, 2010

What to do with Paajarvi and Hall?

Over the past couple days, there have been numerous articles discussing the potential demotions of Hall to the OHL, and Paajarvi to the AHL, in an effort to maximize the value of their ELC’s. It’s fair to say that, in general, I tend to be a believer that 18 and 19 year old players should be demoted barring the situation where they can be a true contributor to a team. That said, it’s not hard to see why this is potentially a pretty complicated issue for a GM; there are many angles to consider: Is the player’s development likely to be better, or worse, at the NHL level when compared to the alternative? Can the player still learn more at a lower level while retaining the ELC year? What is the current quality of the team? Can the player help improve a team? Is it in the team’s best interest to start this player now, or one (or two) years later? Does the team risk damaging its relationship with the player if they demote a “clearly ready” player? Is that risk worth delaying the contract? Do you need the player around to sell tickets?

I don’t know the answer to all these questions, though I have my opinions. I think if the Oilers had handled this a bit differently over the summer, they would be in a better position to frame a potential demotion. They never really came out and said something like “We’re happy to keep Hall and Paajarvi at the NHL level provided they can be positive, two-way contributors to our line-up. If they aren’t ready to play 16-18 minutes a night, we don’t think it will hurt Hall to go back to Windsor for a year and shift to C, or hurt Paajarvi to play in Sweden or the AHL for another year to improve the weaker areas of his game.” On the other hand, were they able to retain/sell 1,500-2,000 season tickets, by pushing the hype, the rebuild, and the “new direction”, that they wouldn’t have been able to otherwise sell? If so, at $100 a seat, you’re looking at something like $6 – 8 million they’d have been without, PLUS they then have to try to generate new season ticket holders, which most people would agree is harder to do than retaining the ones you already have. It’s easy to see the hockey argument for sending these players out, but teams aren’t necessarily run with hockey matters as the only consideration.

I think the argument that you might get a more team-friendly deal with a player that starts in the NHL at 18, instead of at 20, is with, at least some, merit. It’s true that the agent might advise the player not to sign a long term deal, but for a lot of people there’s value in certainty. If Taylor Hall starts this year and posts 40, 50 and 60 point seasons on his ELC, ending at age 20, he could conceivably have hit very few of his performance bonuses, let’s say 800 K-1.3 mil. That would put the player at $3.5-4 mil in salary earned over 3 seasons. Sure, it’s a lot of money, but a player would have to be pretty confident in his future ability to turn down roughly $25 mil in a 6 year deal. What if he stagnates, or regresses? What about injury risk? Is it that hard to imagine a player willing to trade some future earning potential for the certainty of $25,000,000 now? If he continues progressing and becomes a superstar, he’ll be a UFA again at 28 and can make his mint at that time. Yes, it’s speculation. No, we don’t know what sort of long term deal Gagner would have been willing to sign this summer. Would he have been willing to sign the sort of long-term deal Tyler had proposed earlier this summer? I don’t know, but I have to think it’s more likely he would than if he had started in the NHL during the 09/10 season and posted 55-60 points during years 2-3 of his ELC (which would have been the upcoming 2010/11 and 2011/12 seasons) than the ~45 point seasons he actually recorded during seasons 2 and 3 of his ELC.

I also can’t say I fully agree with Dellow’s apparent assumption that New Jersey and Detroit would send Hall back to junior, or send Paajarvi to the AHL. Maybe they would, maybe they wouldn’t, but I don’t think it’s certain either way. If the argument is that Detroit’s management, were they in Edmonton’s position, might choose a different approach (perhaps roughly approximating Dellow’s approach), I can get behind that argument. But what would a team like DET be saving Hall for? It’s not like Detroit is going to have Lidstrom forever, and it’s unlikely that Datsyuk, Zetterberg, Rafalski, and Franzen have their best years ahead of them – one could easily argue that their time to win is now. In an efficiency contest, with a team willing to spend above the cap, I don’t think it’s unreasonable to guess they might keep Hall in the NHL this season. Can a team trying to win the Cup right now, a team arguably with an aging core, do much better than Hall at 900K (Hall’s salary after removing his bonus cushion) in the market? Hall is a player that could be much better by the time the playoffs arrive than he is now, for the playoffs, and “flags fly forever”.

If the Oilers were in a position to compete for a playoff spot, I think it would be easier to justify keeping them. Once you’re in the playoffs, who knows what crazy things could happen? It’s a poker cliché that “all you need is a chip and a chair”, to be alive in a tournament, and have a chance at winning, but the recent history of the NHL playoffs suggests it’s not impossible for a lower seed to run a couple of upsets together in the playoffs. Had the Oilers found a way to fix things with Souray, chose to sign some veteran NHL players to address needs instead of signing some of the players they did, and spent above the cap (using at least a chunk of their ~$3.5 mil bonus cushion), I don’t think it’s unreasonable to suggest they’d have been , at worst, a playoff contender in 2010/11. I might well be less inclined to send guys like Hall and Paajarvi away, in that case.

Between the two players, I believe the argument for keeping Paajarvi down might actually be stronger than the argument for Hall. If you rate both players as equals at the moment, you probably gain more by delaying Paajarvi since his cap hit is 2.225 mil less than Hall’s. If both players are “worth” 6 mil each in 2012/13 and 2013/14, you have more surplus value by delaying Paajarvi than you do Hall.

Interestingly, another argument for rebuilding teams playing 18 and 19 year forwards for 14-16 minutes a night is that they may make the team worse in the short run. And, if you’re going to miss the playoffs anyways, you create value by improving the quality of your draft pick. If you’re a top team like NJ, your first round pick only carries enough value to be of one of 3 or 4 pieces when you trade for Kovalchuk at the deadline. If you’re EDM, your draft pick (Hall) is more valuable than any other asset in the organization. It’s true that you could, in theory, ice a bad team and get a top 2 pick any time you feel like it. However, in reality, it’s probably pretty tough to do that while convincing your fans there is a reason to shell out for tickets. Maybe Edmonton’s management thinks that, by keeping Hall and Paajarvi here this season, they’ll sell some tickets they otherwise wouldn’t, aid their long-term development, all while potentially not helping, or even hurting, the team on ice. If you can make some money, help develop both players PLUS gain the difference in value between a 3rd overall pick and a 10th overall draft pick, maybe that’s not such a bad idea, in particular in years where there's a seemingly big dropoff from 1, 2, and 3 overall to 9, 10 and 11 overall?

Ultimately, if I were the Oilers, I would have built things differently this summer and been kind of looking for a reason to demote these players away unless they look truly ready. However, the problem with this is shown by Gagner, who posted 7 points in his first 9 games, at which point EDM had to decide what to do. They decided to keep him, and after the 9 game mark I think he had something like 4 points in his next 20 games. It’s, in a way, just a bad case of bad luck/small sample size that led to Edmonton keeping Gagner; had he posted 2 points in his first 9 games instead of 7, he’d likely have been demoted and never had a chance to turn things around. In this case, I think the Oilers have kind of backed themselves into a corner with their hype and roster construction, and will have a harder time demoting the future than they might have with lowered expectations. However, I don’t think it’s impossible to imagine that the Oilers might, in some corner of their mind, not be altogether disappointed if Hall posts 3 points and a -5 in his first 8 games, something concrete they could point to when demoting him to Windsor to play C.


dstaples said...

Excellent summation of all the main points in this discussion. No easy answer here . . .

Scott Reynolds said...

Great post Speeds. I think the business perspective is an important one. The Oilers have been using these guys to sell tickets, and I've got to think there would be some long-term blowback if they sent the players away and had another awful season (all would be forgiven if the team performed well, I'm sure).

The other perspective that I think is important is Tambellini's personal perspective. Even if he believes there's a strong chance that the team would be better served four years down the line by delaying the ELC contracts of Hall and Paajarvi, he can't be sure (or even confident) that he'll be around to benefit from that advantage. Waiting for a benefit in four years is a big risk for him. If he sends the kids away and then has trouble getting renewals for 2011-12, it's possible (probable?) that he gets canned. He's probably smarter to sell the future hard now and cash in while he can.