Taking a look at a possible Henrik Lundqvist contract extensionJune 28, 2013, by
Henrik Lundqvist’s contract situation has been quite the hot topic since the season ended. Prior to his non-committal remarks as to his future, it seemed like a foregone conclusion that Hank would remain in New York long-term. Since extension-gate and the coaching change, combined with news that Lundqvist’s camp and the Rangers are commencing negotiations at the Draft in a few days, there has been much speculation about what a possible extension would look like. Many pundits have theorized a possible max-contract to keep The King in his kingdom, but there hasn’t been much in the way of analysis. Let’s change that, shall we?
For those who aren’t CBA geeks, the max-contract under the current collective bargaining agreement (for a player re-signing with his current club) is 8 years/$80 million. For a UFA changing destinations it is 7 years/$70 million. Hank is currently entering the final year of his 6 year/$41.45 million contract, signed in 2008. If he were to receive a max-deal, the massive cap hit of $10 million would be approximately a $3.125 million increase from his current contract. Even with the cap increasing again based on the HRR (Hockey Related Revenue) calculation in 2014-2015, the cap hit is staggering.
The implementation of the new CBA has changed the landscape of long-term extensions for superstar players. Gone are the cap-circumventing 12-14 year deals and the suppressed cap values that came with them. This alone makes forecasting an elite free agent contract all the more difficult. Not to mention that goalies are generally priced differently than players are, anyway.
Only five players have signed extensions post-lockout that are over six years and $30 million: Evgeni Malkin (8/$76m), Travis Zajac (8/$46m), Ryan Getzlaf (8/$66m), Corey Perry (8/$69m) and Jimmy Howard (6/$31.7m). In all cases (except maybe for Howard) these were franchise cornerstones who were threatening to hit the open market. I tend to believe the Devils overextended on years to retain Zajac, but I digress.
While Malkin and Perry are MVP-caliber players, the rest are above-average NHLer’s who were uniquely valuable to their clubs. Lundqvist is a more comparable player to Malkin and Perry, but they exist in an entirely different pricing matrix from Hank simply by virtue of position. Howard’s deal involves a relatively modest $5.29m cap hit for the next 6 seasons (he’s two years younger than Hank).
Since the direct comparables are extremely limited, we can look to other high-end goalie contracts for some guidance. Looking at Hank’s most immediate peers, we actually see several, relatively recent long-term deals. Jonathan Quick is starting a 10 year/$58 million dollar deal for an easily calculated cap hit of $5.8 million. He is also four years younger than Lundqvist at the start of the deal. Pekka Rinne signed a 7 year/$49 million deal starting this past season. With a simple $7m cap hit, and is only one year younger than Hank. Ilya Bryzgalov’s ill-fated 9 year/$51 in Philly only had a cap hit of $5.66 million. The long-term deals signed at a similar age of Roberto Luongo and Rick DiPietro aren’t really useful as comparables since these contracts were specifically eliminated from the economic landscape.
Until Rinne’s deal kicked in this season, Hank had the highest annual cap hit of any NHL netminder. He also has intrinsic value of being the face of the franchise, beloved by fans and the backbone of a team that fancies itself a contender. Losing Lundqvist would have catastrophic ramifications. Although, as I mentioned when addressing Hank’s comments, he doesn’t exactly have a wealth of options if he chooses to leave the Big Apple.
It is very difficult to predict exactly how these negotiations play out, but I don’t see this ending in a max-deal. Pekka Rinne is the best direct comparable based on age and accolades, and probably represents the most realistic scenario in a max-term environment. Howard seemingly took something of a discount to remain in Detroit, and isn’t nearly as accomplished at Lundqvist to this point, anyway. The Quick comparison doesn’t really work either, as there is a significant age gap between the two stars.
While Lundqvist seemingly provides as much value as Malkin, historically goalies aren’t rewarded as handsomely. Will this continue under the new CBA? Very hard to know. Barring a massive economic shift, Hank will most likely agree to an extension in the 8 year/$64 million range. This would bring his cap hit up to over $8 million, but would hopefully be enough to get the deal done.