AnalysisBusiness of HockeyGoaltending

Taking a look at a possible Henrik Lundqvist contract extension

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.

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  • Dare I say: might it be in the best interest of the organization to trade Lundqvist? It would be a very bold move, no doubt; possibly even a stupid move. But Hank is 31, and a majority of Stanley Cup winning goalies the past 10 years have not been as good as Hank.

    Let’s face it — this team was built for Tortorella’s approach to winning, and it had a lot of success. There is the risk that, by the time AV reconstitutes his lineup, Hank’s game could deteriorate and the team simply goes sideways; i.e., playoffs contention but nothing beyond 1st or 2nd round.

    I am intrigued by the notion of trading Hank for a package of assets that would include the #1 overall pick.

    • Trading Lundqvist would be insane at this time. The team already has quite a few question marks and you’d just create more of them by trading away the team’s best player.

      Really only a few players I’d even think twice about trading him for anyway and those guys are Crosby, Malkin, Tavares, Stamkos… You know, guys that are unattainable.

  • If Hank really wants to win then he’ll take a nice retirement contract he’ll take a nice 8 year $40 million contract. $5 million a year is definitely significantly less than what he’s got right now, but if he’s serious about winning then that would help out the team a whole lot and give them flexibility.

    With that being said I can’t be pissed if he wants/gets $7 million or something like that. He’s earned it for sure, and will hopefully still be worth it down the road. Even when the Rangers were playing god awful hockey at times throughout the last 8 years, Lundqvist has always been a bright spot. Can’t wait till his number 30 is up on the rafters at MSG in the next ten or so years.

  • Anyone that says Malkin set Hank’s market is just fooling themselves (cough, Brooks, cough). Hank will likely get 7/$56m. That’s $8m a year.

    • I agree, Dave. However I do think he will get the extra year. It’s the org’s best way to differentiate their offer vs potential FA destinations.

        • It’ll be interesting to see. I’m not as worried about how Hank will age. His style is much more suited to an older tender than, say, Marty Brodeur (who continues to age gracefully). Hank’s current athleticism makes him elite, but the foundational style will keep him above-average for a long time.

    • Dave

      If Hank plays hard ball, he could be pounding the pavement. Look at 7/$56m, that is more than fair, more than that I’d think twice if he is worth it.

      Does Hank want to win, if so he agrees to something like the above figure. He could get more on the open market??, not so sure. Then, how about the additional income from endorsements, and being located in NYC, the Meca of advertising, how much is that worth. Do you think that if he wins the cup with us he makes out like heck, or if he wins with the likes of the Flyers,( God forbid ) he earns the same amount? Also Hank loves the life style of NYC, can you see him living in Filthadelphia, Pittsburgh, Calgary, Edmonton, you get the picture?

      Hank is a smart man, will be fair with us, and he will be treated very well by Slats. He also understands that he has to let the organization have some flexibility with the likes of McD, Step, Hags, etc!!

  • With AV as coach, bring Lou in from Vancouver for Richards and move Lundquist. Hank is the beloved superstar goalie, but he can not win hockey games all by himself.

      • Were you not the same person who made this completely ridiculous suggestion the other day? I am absolutely baffled by you.

        The canucks have been trying to move Lou EVERYWHERE and have failed miserably. His contract is one of the worst contracts you can have on your books. Even if we trade for him, he would be an immediate buyout candidate.

        And hank HAS won hockey games all by himself. He is the only reason we contend.

    • There’s no way he would take that. His previous contract was bigger and he has won a Vezina, been nominated several more times, and advanced to the ECF since that deal was signed. He’s earned a raise. Even if he gets over $8m, the team has already built its budget around a ~$7m commitment to him, so the ~$1m raise wouldn’t break the bank.

  • I can’t understand why he needs a raise so bad. 7mil for a goalie is enough. If he wants 8 years then 56 mil should be enough. It’s lucky for the Rangers the final year of his deal happens to be the year the cap is a set limit. The cap should go up substantially in 14/15 but if Henrik wants a cup he has to allow Sather some money to add talent around him for 14-15 season and beyond. I can’t see trading him. Not now. Maybe in a few years if you haven’t brought home the Cup by then with Hank on the team. If Hank does demand a huge deal, it could be the tipping point in the decision on Richards. Sather may just have to do it then.

  • I am also getting nervous as to how Richards has not been bought out yet.

    TB bought out Vinny who helped put the franchise on the map, was loved by the community and still could produce. We have 0 loyalty to Richards and need to make the sound business decision. Look at what is happening in Chicago. Hossa may need back surgery with 8 years left on his deal. If they cannot buy him out this year, they will have to cross their fingers that he is healthy at next summer’s buy out period. Hossa could sink the blackhawks franchise in a couple of years because of the CBA penalties to these cap evading deals.

    Buying out Richards is just as crucial as getting Hank signed to a solid deal for a goalie who just turned 31.

    • I agree on Richards, Evan. It’s the prudent business move. Just a correction on the Hawks situation; they used both their compliance buy-outs already on Montador and Olesz. Even if Hossa is healthy next offseason he cannot be bought out without the cap hit sticking.

      • Justin one more thing i just realized. Olesz has I think one or two years left. Why would they not buy him out conventionally next summer? Very baffling decision by chicago to not give themselves an out on the hossa deal.

        • I agree. My thought is that they wanted to clear up space so they didn’t have to buy out Hossa. I understand the guy is a ridiculously good player who has won 2 Stanley Cups in the past 4 years with your franchise. But this deal runs 8 (!) years more. How do you not shed yourself of at least 7 of those years when the guy is over 34?

          • They may have an option with Hossa. I am not sure what the rules are though. Hypothetical: They trade Hossa, cash, and a #1 pick to another team for a middling prospect after next season. Their partner then uses its compliance buyout on Hossa. Finally, the Hawks resign Hossa to a liveable deal, which they can do because they are not the team that actually bought him out. I don’t know if the rules permit any or all of this, but if they do, I would imagine that unused buyouts might be a tradeable commodity.

          • Looks like they can trade Hossa and have another team use their compliance buyout, but they are prohibited from resigning him for a year.

  • Lundquist needs to be paid but pay him what he’s worth in the future not for what he’s done in the past. The six to seven mil a year for 7/8 years is more than reasonable. And I agree with other posters he will be around a while. I can’t remember having an injury and his game is positioning not flying around the crease like a mad man.

  • Hank’s the best goalie in the league, but in the salary cap era, can you win a Cup paying max $$$ to your goalie? Recent history says ‘no’. Can the Blueshirts build the necessary depth across four lines and three defensive pairs if they max out on The King? It’s an interesting dilemma.

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