Ryan Nugent-Hopkins Signs 7-Year 42-Million Dollar Extension

Ryan Nugent-Hopkins has signed a new contract extension that, according to Elliotte Friedman, will pay him $42M over seven seasons. This is the exact same contract that Taylor Hall received last summer, and serves as an endorsement of Steve Tambellini's plan to lock up the young core with long-term contracts and then build around them. When I looked at the team's cap prospects over several seasons earlier this summer this is exactly what I thought the Oilers would do.

The disadvantage to a contract like this, as we all experienced this summer in our civil conversations regarding Jordan Eberle, is that you're likely paying more total money doing things in this way. If the Oilers could have signed a bridge contract here, they probably would have been able to pay Nugent-Hopkins less over the next seven years. Take Matt Duchene as an example. After his entry-level contract, the Avalanche signed him for two years at $3.5M and then followed that with a five-year contract at $6.0M.

The advantage to what the Oilers have done is that it hedges against Nugent-Hopkins performing really well and demanding more money. This helps even if you're only saving money on the back-end of the deal and paying more in total. If the Oilers gave Nugent-Hopkins two contracts that paid him $3.5M for two seasons and then $6.5M for five, they're spending less money overall, but stuck with the higher cap hit when the player is in his prime. I can see why a team like the Oilers, who are just now becoming competitive, might want to avoid this.

The other advantage is cost certainty. The team now has three of its best players locked in, and will likely sign Yakupov to a similar contract next summer. That kind of cost certainty will help MacTavish build around his group during the next several off-seasons.

Let's take a brief look at Edmonton's cap structure for 2014-15 (the first year of the extension), assuming a modest bump in the cap to $67.5M:

Those bottom two left defense slots are reserved for Nurse and Klefbom, but could easily go to whoever is most deserving at that price point. It looks very much like Hemsky is going to be squeezed out unless the cap goes up by more than 5%, but the Oilers can make that gamble if he's willing to sign a reasonably affordable extension. In other words, there's a pretty good chance that all of the good players on this team can stay on this team while leaving enough money to fill out the roster.

A brief look at the 2015-16 chart (again, assuming 5% growth in the cap) is also very encouraging:

The pressure will definitely be on Yakupov to sign a similar deal if he wants big money quickly, and since his alternative is a bridge contract (or... uh... the KHL), I think he probably goes with the "standard first overall pick extension" (aside: it's ridiculous that this exists on any team in any professional sport). With the biggest players locked up, the Oilers would move into subsequent off-seasons with money to sign a player like Nurse or Klefbom to a bigger contract given good performance, or greatly improve the bottom of their roster.

Back to Nugent-Hopkins. As an individual contract, the money doled out here is presumptuous--Nugent-Hopkins' performance thus far doesn't merit this kind of money--but as part of a larger plan that wants to keep all of this young talent together, it makes sense. Given that I'm young enough to be alive for the next decade (and hopefully more!), I very much like the idea of keeping this ridiculously talented group together for the long haul.