The Length of Connor McDavid’s Second Contract

Last week I dug into Connor McDavid’s pending second contract, concluding that whatever he ends up signing for is the right amount. It could be $14 million a season, or $10 million, or something else, it doesn’t matter. The impact that that contract will have on the team will be the same regardless of the value, and since he’ll be worth every penny that the team pays him the final value isn’t something that I’m overly concerned about. The moves that follow, yes, but not the deal itself. Buried in that post is the assumption that McDavid’s next contract will be for the maximum eight years allowed in the current collective bargaining agreement. I thought it might be worthwhile to take a closer look at that assumption today.

Why an eight-year deal makes sense

The reason an eight-year deal makes sense to so many people is likely that it’s a deal that benefits everyone. The team, the player, even the agent, would all benefit in a big way if McDavid were to sign an eight-year extension this summer. The Oilers would lock in a player, one who is arguably already the league’s best, for eight more years at a known price. For Connor McDavid, he would guarantee himself somewhere between $80 and $120 million depending on how much he asks for and how much the salary cap goes up next season. And the agent maximizes his payday as well. Theoretically that agent always has the player’s best interests at heart, so if an eight-year deal isn’t right for McDavid he should say so, but it is easy to see how that agent might become biased when they have a shot at a multi million-dollar fee.

For both the team and the agent, an eight-year deal is likely the best case scenario. For Connor McDavid though, there could be more to consider.

Why an eight-year deal might not make sense

If you spend almost any time discussing Connor McDavid’s second contract you will immediately hear something along the lines of “he’ll take a little less in order to win.” I don’t know the man personally (for what it’s worth, neither do the people suggesting it) so that might well be true, it’s certainly an option that makes some sense and would seem to reflect what other players have done in the past. But if what McDavid really wants is a chance to win, taking less money on a long term deal isn’t the only way to make that happen. He could just take a shorter contract and less guaranteed money but give himself the flexibility to remove himself from a bad situation if the need arose.

I’m not saying he’s good or bad at his job, but regardless of what you think about Peter Chiarelli’s abilities as a general manager, it’s not a stretch to think that there could be some bumps along the way as he works to take the Oilers from the team they are today to a true Stanley Cup contender. How many mistakes (Chiarelli is human and humans make mistakes) and how big they happen to be will go a long way to determining the how long the Oilers window to win stays open.

A bad trade or free agent signing, an over payment on a second contract, a couple of players failing to progress as expected, or some combination of the three, and the Oilers could easily find themselves in a tough spot. McDavid’s second contract – not to mention Leon Draisaitl’s – is going to leave the team up against the salary cap which in turn will limit the options available to them to fix their problems, and this could leave the in limbo, just a step below the league’s elite. Team’s in that position can, and have, won Stanley Cups and the Oilers could well do the same should they find themselves in that situation but it would take a little more luck than an elite level team would require. That simply might not be a situation that Connor McDavid wants to find himself in (especially if he took less money to play for a winner) and more so than most other players he’s able to do something about that.

McDavid has all the leverage

As I said in my post looking at his contract value, Connor McDavid basically gets to call his shot here. That applies not only to the dollar amount but to contract years as well. Connor McDavid had no say in where he started his career and that team was also given control of him for the first seven years of his career. His earnings have been severely restricted during the first three years of his career and will continue to be resticted, admittedly to a much lesser extent, throughout his career. Those are the realities of the NHLs collective bargaining agreement, but a player who is 20 years old and already one of the NHL’s best has leverage that most other players do not have.

What if McDavid asked for a second contract lasting three years instead of the generally assumed eight? As I mentioned previously, the Oilers almost certainly want an eight-year deal as that’s by far the best case scenario for the team, but what leverage do they really have to get him to sign a contract even a year longer than he wants? The answer to that question is of course none, the Oilers have absolutely no leverage in these, what we will generously call, contract negotiations. Whatever McDavid wants, both contract term and dollars, McDavid is going to get. And in my mind should get.

With the salary cap starting to flatten out – from $69 million in 2014/15, to $71.4 million last season, to $73 million this season, and little growth expected next season – any dollars left on the table by McDavid now become increasingly difficult to recover in future contracts. On an eight-year contract this is amount that could easily run north of $10 or even $20 million. I don’t care what you’re getting paid, that’s a lot of money. A three deal at or near the 20% cap would allow McDavid to maximize his earnings now, limit the potential “losses” in the latter years of the deal, and would give him the opportunity to evaluate the progress of the team in three year’s time, deciding then if he wants to stay or go. He’s even be able to take a little less on his third deal to help the team address their needs at that time if he felt so inclined.

Obviously this is a strategy that has some risk. Hockey is a physical game and players get hurt, it happens all the time. There was a time not all that long ago when we weren’t sure if Sidney Crosby would ever play again, or what kind of player he’d be when he did return, and unfortunately something similar could happen to McDavid, in which case leaving $50 million on the table this summer might be a mistake. It’s all about risk/reward and how big of a gamble is McDavid willing to take.

An expiring CBA

Something else worth considering in all of this is the status on the NHL’s collective bargaining agreement with the players. Right now that deal is set to expire after the 2021/2022 season, the same year that McDavid, without an extension, will reach unrestricted free agency. Not knowing what the future holds it might make sense for McDavid to limit his exposure to a new collective bargaining agreement as well. Following the 2004/05 lockout season all player salaries were rolled back 24%. A similar rollback was not included in the collective bargaining agreement in 2013 (which has led to a need for higher escrow payments) but another rollback could certainly be part of the next agreement if/when the owners once again ask for a bigger piece of the revenue pie.

Following a second contract lasting three years Connor McDavid would be both a year from free agency and a year away from a new collective agreement. Depending on how the winds are blowing at that time he could lock in long term with the Oilers or sign a short term deal for a year or two to see how the new collective bargaining agreement shakes out. These are options that wouldn’t be available to him if he signs an eight-year extension this summer.

What will happen

If it were me I would think long and hard about taking a three-year deal, but in the end I doubt that McDavid signs for less than eight years, or maybe that’s just wishful thinking on the part of a fan of the Oilers. If the term ends up being what fans are looking for, I suspect that the dollar amount will not be. Personally, I’m guessing nine figures; $12.5 million times eight years comes out to an even $100 million. I highly doubt that the contract will be worth anything less than that.