Whatever the Value of Connor McDavid’s Second Contract, It’ll be the Right Value

During the Oilers game against the Flyers last night I saw a tweet about Connor McDavid’s next contract and how it should be worth $97 million. I replied explaining in under 140 characters why that value perhaps makes less sense than it seems (I’ll explain this in more detail later in this article, so you don’t need to click that link if you don’t want). Then this morning I saw the same thing on the front page of the Edmonton Journal. All of which got me to thinking a little bit more about the pending eight-year extension for McDavid and what it might look like.

After an exhaustive five-minute search of Twitter, Facebook, and Reddit for discussions on this topic, I’ve concluded that a lot of fans seems to like the idea of a McDavid second contract being eight years long (obviously) worth either $97 million - and average of $12.125 million annually - or $9.7 million annually. In either case it seems that the numbers nine and seven should appear in the contract value somewhere The logic here is obviously rather simple, McDavid wears 97, so how about a contract that ties into that. Much like Sidney Crosby’s contract which is worth $8.7 million per season.

Simple. Done. Where does he sign?

Does a $9.7M or $97M contract make sense?

Before we get too far ahead of ourselves though, it’s probably worth remembering how the NHL’s revenue splitting works. As per the CBA, the players and the owners each get 50% of the revenue. Meaning that at the end of the season all the revenues and all the salaries get added up, and then if by chance salaries aren’t exactly half of revenues the salaries get adjusted so that a 50/50 split is achieved. This split could see the players get all of their escrow money paid back plus a little more (highly unlikely), or the players could some portion of the escrow money back. How much depends on how close the salaries were to the 50% mark.

Whether that adjustment be up or down, at the end of every season some sort of salary adjustment is almost certainly going to be required and that means that McDavid, along with every other NHL player, doesn’t actually make what their contracts are stated to be worth. In reality, NHL contracts should probably be reported in a new currency called NHLD which has a yet to be determined conversion to USD. Reporting contracts in Monopoly money would work just as well. Who knows, having contracts in something other than USD might even help clear up some of the confusion that seems to surround escrow since it would no longer seem like real money being taken off each pay cheque.

So what should his next contract be worth?

Now, if Connor McDavid likes the number 97 to the extent that he wishes to include that somewhere in the value of his next contract that is obviously his choice, he just won’t actually get paid that much. What this whole discussion about his second contract really should come down to is what does McDavid want. If he’s happy with $9.7 million a season, that’s fine by me. If he wants to make it $97 million, I’m okay with that too. And if he wants the 20% maximum - $14.6 million (based on the current salary cap) a season and $116.8 million total - for the next eight years, I’ll have no issues with it either.

By the time McDavid starts seeing money from that second contract he will be undoubtedly be the best player in the NHL, a title he might not relinquish during the eight years covered by that deal. His second contract will cover what are likely to be the most productive years of his career, from age 21 through 29. Even now, after watching him for more than 100 games, I’m still consistently amazed by what I see from him on nightly basis, and I can only image what the years ahead will be like. That level of play deserves to be rewarded, and rewarded handsomely. As far as I’m concerned, a player in a situation like this gets to call his shot. Whatever he asks for is the right answer.

But can the Oilers win if McDavid makes that much?

Whatever the final value of McDavid’s contract ends up being it will have big implications on the team’s makeup over the next nine years. Even before the contract kicks in at the start of the 2018 season the Oilers will have to begin positioning themselves for the cap crunch that will follow. This is true whether the contract is worth $14 million a season, $10 million a season, or somewhere in between. It is a contract that will force Peter Chiarelli to make some tough decisions - like does he trade Jordan Eberle, Ryan Nugent-Hopkins, or both, and when - but that is what Chiarelli is paid to do and it shouldn’t be McDavid’s responsibility to make his job easier.

Again, if McDavid chooses to take less in an effort to help the Oilers win - a common refrain from those who believe he’ll sign a contract around the $9.7 a year mark - that’s his choice, and one that I am fine with, but it does little to guarantee that the Oilers win. With Crosby making below market value the Penguins advanced past the second round of the playoffs just once in the six seasons prior to their Stanley Cup win last June. That wasn’t because the Penguins were paying Crosby (or Evgeni Malkin) too much, it was because the team was inefficient in other areas, especially their bottom six forwards, which hurt the team much more than paying a superstar superstar-money did.

For fans of a team that hasn’t made the playoffs in over a decade, making the playoffs but failing to advance past the second round might seem like an overwhelming success. Ask a couple Penguin fans if they were happy with it, see what they tell you. When you have a couple of the world’s best players on your team you expect more, and when that doesn’t happens some will point fingers at the highest paid players on the roster, whether they are to blame or not. Regardless of what the Oilers end up paying Connor McDavid they should still be able to ice a winner, the margin of error is just a little bit smaller.

As a smart man once said, and as I have repeated many times here, building a team in a league with a salary cap is an efficiency contest, and it’s the teams that get the most bang for their buck that will be most likely to succeed. This applies not only to the salary cap, where paying big bucks for declining players (cough Milan Lucic cough) or overpaying at the bottom of your roster will kill you, but throughout the organization. Amateur and pro scouting have to have more successes than failures. Player development has to be better. So too does the coaching staff in terms on maximizing match-ups and utilizing things like video analysis and statistical analysis. Rather than expecting McDavid to take less than he’s worth we should expect players signing, or re-signing, here to take a little for the chance to win alongside the league’s best player; a hundred thousand here, a couple hundred thousand will add up in a hurry.

Everywhere where the Oilers can gain even the tiniest advantage they are going to have to do it. The days of being able to exploit/depend on players on cheap, entry level contracts to provide significant contributions near the top of the lineup are about to be over. And all of this has to happen whether McDavid takes home $14 million a season or a mere $10 million. This is the reality that the Oilers are going to have to deal with from this season on.

This isn’t to say that the Oilers should yell “deal” to whatever number McDavid’s agent suggests. Negotiating is part of business and hockey is a business, but in this case the dollars and cents shouldn’t be a major concern because McDavid will be worth every penny. What they (and we) need to be concerned about is making sure that every other player on the roster is too.