NHL Salaries: Should the Best Players Make the Most Money?

While doing some research for a piece on the merits of participating in the annual July 1 free agent frenzy, I came across a year by year listing of player salaries.  Chris Gratton made $10.15 million in 1997-1998 and was still $6.3 million behind the top earner, Joe Sakic.  Setting aside the insanity of the size of the salary for a moment, how the heck did Gratton end up being the 2nd highest paid player in the league?  He scored 62 points in 1996-1997 and that convinced Philadelphia to break the bank.

Looking at the numbers a little more closely, there have been three distinct salary eras over the past 20 years: pre-2004 lockout; 1995-2004 lockout; and 2005-today.  Prior to the 2004 lockout, the best players in the NHL made the most money.   You may argue with one or two names in the table below, but by and the list is full of the legends of the game.

  89-90 90-91 91-92 92-93 93-94 Salary Range *
Mario Lemieux 1 2 2 3 3 $2-$3 million
Wayne Gretzky 2 1 1 2 3 $1.7-$3 million
Mark Messier 3     4   $0.9- $2.4 million
Steve Yzerman 4 3 4   2 $0.7- $3.2 million
Bryan Trottier 5         $0.6 million
Ray Bourque   4       $1.2 million
Brett Hull   5 3     $1.1- $1.5 million
Pat LaFontaine     4 5   $1.4- $1.8 million
Eric Lindros       1 1 $3.4-$3.5 million
Patrick Roy         5 $2.7 million
             
* Salary range for years included in top 5 list      

The salaries in the above table almost seem criminal when compared to the salaries of today, but it was a different world that included affordable tickets and the home team wearing white sweaters.  Despite the paltry salaries of the day, the big issue in 1994 was the health of the small market franchises, especially those in Canada.  The league pushed hard for a salary cap, but eventually gave up the fight when the large market teams opted that the status quo was better than a lengthy lockout.

How history might have changed if the NHL had managed to keep all the teams together on the issue of the salary cap.  As the table below shows, salaries quickly spiraled out of control which led to the relocation of the Quebec, Winnipeg and Hartford franchises in 1995, 1996 and 1997 respectively.   To put the absurdity of NHL salaries during the period in perspective, I remember hearing a stat that there were seven or eight players on the Dallas Stars who were making more than Troy Aikman, quarterback of the Dallas Cowboys!    

  94-95 95-96 96-97 97-98 98-99 Salary Range 
Wayne Gretzky 1 1   3   $6.5 million
Mark Messier 2 2 2 4   $6-$6.3 million
Scott Stevens 3         $3.2 million
Pavel Bure 4 5 3 5   $2.6- $5.5 million
Mario Lemieux 5 4 1     $2.3- $11.4 million
Keith Tkachuk   3       $6 million
Pat LaFontaine     4     $4.6 million
Patrick Roy     5     $4.6 million
Joe Sakic       1   $16.5 million
Chris Gratton       2   $10.2 million
Sergei Federov         1 $14.5 million
Paul Kariya         2 $8.25 million
Eric Lindros         3 $8 million
Dominik Hasek         3 $8 million
Mats Sundin         5 $6.3 million
             
  99-00 00-01 01-02 02-03 03-04 Salary Range 
Jaromir Jagr 1 3 1 1 1 $9.8- $17.4 million
Paul Kariya 2 2 3 5   $10 million
Peter Forsberg 3 1     1 $9- $11 million
Theo Fleury 4         $8.5 million
Eric Lindros 4         $8.5 million
Pavel Bure   4 2 4   $9- $10 million
Keith Tkachuk   5   2 3 $7.3- $11 million
Joe Sakic     4     $9.9 million
Chris Pronger     5     $9.5 million
Teemu Selane     5     $9.5 million
Nicklas Lidstrom       3 3 $10- $10.5 million
Sergei Federov         3 $10 million

Salaries went out of control just before the 1997 season with the deals awarded to Sakic and Gratton.   The salaries of this period again seem criminal but in the extreme other direction of the pre-1994 period.  The teams with the deep pockets spent with reckless abandon while the small market teams suffered.    In large part, the best players in the game made it onto the list, but there are more than a few oddities included. 

Fortunately for the NHL and its fans *, the owners again locked out the players in 2004 which cost us the entire season.  The NHL re-emerged in the fall of 2005 with a salary cap in hand to level the playing field.  No longer would Paul Kariya and Sergei Federov be paid millions more than they were worth.

* Prior to writing that statement, I do not think I have ever thought about the strike as a fortunate event.  The lockout was greedy vs. greedier and we the fans were the ones getting the short end of the stick.  While that sentiment still holds true, the system was broke and a salary cap was needed to protect the owners against themselves.  While it is sad to think multi-millionaires need protection from themselves, it reminds me of the US banking collapse in 2008 which was another example of greed gone wild.  Unfortunately, I have yet to set the equivalent of the salary cap put to those institutions under control in the future.  As some point, fear will subside and they will again get their greed on.

Coming out of the lockout, it appears that the GM’s are still figuring out how best to manage their salary cap number.  There was a brief period of overpaying for free agents, followed by the Edmonton Oilers’ offer sheets to Thomas Vanek and Dustin Penner.  The Oilers play to overpay restricted free agents quickly ushered in an era of having teams pay huge dollars to tie up their young players.

  05-06 06-07 07-08 08-09 09-10 Salary Range 
Jaromir Jagr 1 1 4     $8.4 million
Nicklas Lidstrom 2 3       $7.6 million
Keith Tkachuk 2         $7.6 million
Alexei Yashin 2 4       $7.6 million
Jarome Ignila 5         $7 million
Brad Richards   2       $7.8 million
Mats Sundin   4   4   $7.6- $8.6 million
Daniel Briere     1     $10 million
Scott Gomez     1     $10 million
Thomas Vanek     1     $10 million
Kimmo Timonen     5     $8 million
Dany Heatley       1   $10 million
Sidney Crosby       2 2 $9 million
Alexander Ovechkin       2 2 $9 million
Miikka Kiprusoff       5   $8.5 million
Vincent Lecavalier         1 $10 million
Evgeni Malkin         2 $9 million
Chris Drury         5 $8.1 million

The result has been the opposite of what I might have expected the salary cap era to bring.  Instead of the best players dominating the pay scale, the list is full of overpaid free agent signings and overpaid young talent.  While it is comforting to see Crosby, Malkin and Overchin on the 2009-2010 list, the league is full of overpaid players like Lecavalier, Drury, Heatly, Scott Gomez, Marian Gaborik, Wade Redden, Jason Spezza and amazingly, Paul Kariya to name a few.

In my mind, the issue is not whether or not the best players in the game deserve to make the most money.  The issue is what compels teams to offer huge contracts to sub-superstar talent?  It seems that the mentality is, “We have the money to spend so let’s spend it”, followed closely by, “He is the best free agent available so let’s pay him the max to ensure we get him”. 

While the above qualifies under the definition of strategy, why will teams overpay for a player that will not be the central piece in a run towards the Stanley Cup?  I will explore this question later this month when I take a more detailed look at free agent signings and their impact on team performance. 

Copyright, Jonathan Joyce. 2010.

 

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