Would Sign and Trade Deals Be A Good Thing For The NHL?

During the most encouraging 48 hours we've had since the lockout began, a curious provision was offered by the NHL to the union last night in their most recent proposal. From TSN's overnight story on the negotiations (emphasis is mine):

The league did not budge on its request for a five-year term limit on player contracts and held firm to a maximum year-to-year salary variance of five per cent. The league's offer did, however, offer an exception on contract lengths for the re-signing of free agents. Teams would be allowed to re-sign their own free agents to contracts up to seven years in duration.

For those not familiar with the NBA's collective bargaining arrangement, there is a similar provision in basketball that allows players to sign more lucrative contracts with their existing team than they can on the open market as a free agent. It's not exactly the same in the NBA, as their arrangement allows for both additional years and higher annual salaries for the player if he re-signs with his current club. However, the principle is the same: players are able to obtain a better contract by signing with his current team.

The impetus for this article was a very engaging conversation I had with fellow C&B writer Derek Blasutti (a.k.a. dawgbone98). We discussed whether or not the reality of sign-and-trade transactions could result from the owners' most recent offer. Derek pointed out to me that the sign-and-trade transaction was something specifically identified in the NBA CBA. While this is true, I still believe that a more organic version of this type of deal would likely manifest itself in the NHL if this provision becomes part of the next CBA and below I will use a detailed example to illustrate both why I believe they are a likely occurrence and why I'm not a fan of this happening.

For example, let's say that Corey Perry is an unrestricted free agent at the end of the 2012/13 season (which he is) and that the season ends with Perry still a member of the Anaheim Ducks. Heading into free agency, Perry now holds all the cards to determine where he wants to play next season and likely for the majority of his prime years in the league. Under the proposed provision to a new CBA, Perry would be able to negotiate up to a five year deal with any of the 29 other teams in the league, or up to a seven year contract with Anaheim.

Knowing this, there is an obvious incentive for Perry to re-sign with the Ducks. Even if he is offered the same cap hit in other cities, Perry would have to at least consider that if he we to sign anywhere but Anaheim, when that 5 year deal expired, he may have difficulty getting an equal amount money per year on his next deal at age 33 compared to what he can get as an elite level scorer in the heart of his prime years at 28, which basically means he is risking potentially millions of dollars by not taking the additional two years guaranteed at (approximately) the same salary to stay with the Ducks.

But here's the big question... what if Perry doesn't want to play for Anaheim any more? Obviously, Perry and his agent would be looking to maximize the value of what will likely be his most lucrative contract, but if Anaheim is not where Perry wants to play, then the question becomes, how to get the most money possible to play where he wants to play? The answer: A sign-and-trade arrangement. Sticking to the example, Perry and his agent identify five teams he wants to play for that have the cap space to offer him the money he wants: (hypothetically) The LA Kings, the Colorado Avalanche, the Detroit Red Wings, the Toronto Maple Leafs and the Washington Capitals. The Ducks are also still in the mix, at least since Perry wants to keep his options open.

Perry and his agent talk to all five of the other teams and establish the UFA market. All teams are willing to go max years (five) and will match the best offer of $7M per year ($35M total). With the league's proposal also limiting the fluctuations of dollar value year-to-year in a deal, teams can't separate themselves by offering bigger signing bonuses, so essentially the deals are the same.

At this point Perry and his agent have some choices, they can choose the city and team Perry likes best (let's say Washington) and sign the contract, or the agent can go to George McPhee and offer another scenario: "You've got the best offer, and Corey would love to come and play for you, but right now Anaheim is able to offer him the same deal you are offering, but with an extra 2 years and $14 million on it to stay there and he just can't pass that up. If you can work out a deal with Anaheim where they sign Corey for the full seven years and $49M and then they trade him to you, then it would be the best of both worlds. Corey gets get the best contract he can and you guys get a 28 year old 50 goal scorer for the next seven seasons."

If McPhee says no to that idea, then the agent goes to Perry's second choice, let’s say that’s Detroit, and says "Corey's having trouble passing on Anaheim's seven year offer. To be honest, Washington was his first choice, but I offered them this scenario and they said no, so if you're willing to make this happen, he'll sign with you. Otherwise, he's choosing between Washington and Anaheim" and then present the same offer to Ken Holland that he try to work out a deal with the Ducks so Perry gets his seven years.

If you do that long enough, at least one of those teams is going to call Anaheim and see what it would take to make the deal happen. They would be foolish not to if it meant the difference between signing a Hart trophy winner or not. To finish our example, let's say Detroit says ok and Ken Holland calls Bob Murray to work things out. When Bob Murray hears the situation, he is faced with two options: 1) Tell Holland no way (at which point the agent will say "Then he's not signing in Anaheim and you get nothing"), or 2) he can see an opportunity to get something back in return for losing his best player and make the best deal he can. He could even try to work with the agent to bring the Leafs, Kings and Avs into the situation and try to start a bidding war to get a better return.

Even if GM's are initially resistent to such actions, at some point, somebody is going to want a player badly enough that they will make this happen in order to get the guy they want. Once that happens, a precedent will be set and the concept of sign-and-trades will be a part of the free agency process every year. I whole-heartedly dislike this process for more reasons than I can count, but to list a few:

1. Gives players control over multiple franchises. They essentially get to dictate a trade between two teams without being a part of either roster at the time.
2. Forces teams acquiring elite level talent (who are the only ones that would be able to use this method) to part with assets even if the player is a UFA. Whether prospects, picks or current players, team has to spend big money and then give even more in order to get their man. It's also a bad way for a player to join a franchise. "I want to play for you, but I'm going to make you trade someone else away before I'll sign"
3. Could turn UFA season into a trade deadline. If, to re-use the example above, Bob Murray was able to start a bidding war between two or three teams Perry was willing to accept, he could actually net a significant return for losing a free agent on the open market. It would diminish the value (or at least the frequency) of trading players in-season (this is a little less likely).

I could go on, but on this particular matter, I think the league should bend a little further and offer the players seven year limits on all deals. That isn't really a concession, since there are no current limits, but it is a decrease in demands which might facilitate a deal. Truthfully, I think the league is better off with a level UFA playing field anyway. Sign-and-trades in the NHL? I hope not.