NOTE: THERE WILL BE NO SIGNING SHEETS MADE IN THE FUTURE BY BOMBERS.
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Note, this is a change for 2020-2021 signing sheet - not for the upcoming 2019-2020 free agent signing sheet.
I spent a lot of time listening to other GM's about their concerns and went to analyze new data to see if the signing sheet can be improved for the future. The reason it's not implemented for this upcoming year is because it can potentially change other GM's signing strategies so want everyone to have a year to plan accordingly.
I admit that the current signing sheet isn't perfect, so these upcoming changes help align it better with the actual free agency data.
Rationale:
- FA has shifted dramatically with select number of FA taking longer larger contracts, and younger players getting large pay.
- Older players are also getting paid much less, and our spreadsheet doesn’t adequately reflect this change.
- BFHL ended up having a lot of quality veterans unsigned at year end as a result as they were overpriced in BFHL.
- The current signing sheet doesn't reflect the pricing dynamics noticed in the market.
- BFHL players exiting their entry level contracts suddenly had significant pay increases even on short term (whereas in NHL, these players would be on a lower priced short term bridge contract, or alternatively, a longer term high priced contract). The proposed changes will allow GMs to choose between bridge (show me) or a long term investment.
Methodology and Analysis:
- Reviewed all NHL contracts > 4 year term to understand how prevalent is the usage of longer term contracts.
- Reviewed Evolving Wild's player pricing spreadsheet by contract terms (this is one of the top analytics sites online that determined what a player is worth based on the contract length)
Conclusions from Analysis:
- Players under 28 years old, historically, each NHL sign approx. 1 contract a year with term > 4 years.
- On average, there are 3 of these contracts per NHL team with term > 4 years left (this implies a 7 year average contract length, meaning you'll have one with 5 yrs left, one with 6 yrs left, and one with 7 yrs left over time).
- On expected contracts, most players <=33 years old sign on average 3 year contracts.
- Players > 33 years old are getting less money on 1 year deals.
- Players <=33 years old are also getting lower money on 1 year deals, but much more for longer term contracts.
- Players don't take a discount as season progresses (see Nylander as an example).
Upcoming Changes (Referring to each conclusion above):
- Each BFHL team will be allowed to sign 1 long term contract a year. This will be allowed only during the period you sign your own players. If you make an error, that's too bad. If you don't sign your player, that's also too bad - you get one shot at doing it.
- Long term contracts will only go up to 7 years max.
- BFHL will move to 3 years instead of 2 years for the "baseline 90% probability" in the signing sheet for players <= 33 year old.
- Translation - say it cost $1,000,000 to offer 90% probability of signing a player for 2 years in 2019-2020, it would cost $1,000,000 at 90% probability to sign that same player for 3 years in 2020-2021.
- While this appears to be a price reduction on the player, but you'll note that BFHL salaries have actually increased quite a bit higher than going rate.
- This reduction in cost will help get BFHL signing sheet closer to actual rates.
- Note 33+ year olds will still be 2 years (as you can't sign them for more than 2 years anyways).
- Players under 33 will get a discount for 1 year deals. They will only be able to sign 2 year deals (same as historically).
- The cost to obtain a 90% probability of signing (based on # of years contracted) will change as follows:
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"Baseline Salary Multiplier" (To get 90% probability of resigning) Contract Term Current Revised 1 103% 70% 2 100% 100%
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- The cost to obtain a 90% probability of signing (based on # of years contracted) will change as follows:
- For players under 27, the multipliers will change as follows:
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"Baseline Salary Multiplier" (To get 90% probability of resigning) Contract Term Current Revised 1 95% 75% 2 100% 80% 3 105% 100% 4 115% 125% 5 n.a. 130% (1 signing only) 6 n.a. 132.5% (1 signing only) 7 n.a. 132.5% (1 signing only)
- For players 27-33 them multipliers will change as follows:
"Baseline Salary Multiplier" (To get 90% probability of resigning)
Contract Term
Current
Revised
1
98%
70%
2
100%
80%
3
105%
100%
4
120%
120%
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Players will no longer cost less on a 1 year contract as the season progresses.
FAQ:
- Q1: Who's going to track the different conditions of when you can have a long term contract... A team could trade in all the long term and others can then do more long terms?
- A1: There is no need to track. You limit 1 long term signing per “Own Signing”. After “Own Signing”, nobody else can sign. If they want to trade that player afterwards, that’s fine – the value of that asset reflects the long term contract. Typically people only sign their stars to a contract like this – it is pricey to lock them up long term.
- Q2: The point of 4 years was to ensure no team is left with a potentially stupid contract for too long and promote player movement.
- A2: The changes still promote short term contract. Shorter contracts have lower pricing. For long contracts, a GM can only sign 1 player per year. Over time, that GM will only have 3 players with contracts longer than 4 years (a newly signed one 7 yrs, one that is 6 years signed 1 year ago, and one that is 5 years signed 2 years ago). That’s 3 out of 21 players. This change allows teams to do either long or short contracts depending on their strategy of how they want to manage their team.
- Q3: I think a change should be global for all players, like the older players rule, and shift in where the money is paid (though older players that are good still get paid...) I'm not sure if it’s easy to manage case by case type rules.
- A3: We already make it different for older players vs younger players. Older players can only be signed to 2 year contracts. If you want to not differentiate the age differences, then it creates a distortion with how the NHL is working nowadays. Additionally 7 year contracts on older player is counter intuitive and increases probability of a bad contract (saving GMs from their own stupidity here).
- Q4: Someone is going to try to put in 7 years at the wrong time or too many or just a mistake........ It's just an extra something Nokians have to keep an eye out on.
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A4: Signing sheet will only allow one 7 year contract. This will be allowed only during the period you sign your own players. If you make an error, that's too bad. If you don't sign your player, that's also too bad - you get one shot at doing it.
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Q5: This creates a significant discount for short term players and cap will no longer be important!
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While the discount appears high for 1 year contract, keep in mind this is for a 90% probability of resigning - there is a 10% probability the player walks with serious implications for UFA. To get to max 98% probability, you'd actually need to increase pay by another 20%. Cap will still be important, because if you sign everyone on 1 year, you're risking increased turnover from players not signing (especially with UFA).
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Example Ovechkin 2018 signing was $9.6mm 1 year 90% probability
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Revised, Ovechkin 2020 (assuming same rating) would be $6.9mm 1 year (90% probability), or $8.2mm 1 year (98% probability). If you want to risk a 10% probability of an elite talent walking at $6.9mm, all the power to you and that's a risk you have to make a call on.
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