Salary Woes?…Hossa a rental?

With the addition of Marian Hossa to the Pittsburgh Penguins lineup, there has been well spread talk around the league that Pittsburgh will turn into another Tampa Bay, a team who had to eventually ship Brad Richards out of town, because they could no longer afford three prominent players and their salaries. This has in turn started the talk around the league that Marian Hossa will not sign with the Penguins and will likely seek a different destination after July, with plenty of fans speculating already on Hossa’s future zip code come next season. Although these are certainly worthy concerns, and there is truth among them, the real truth and specifics are hidden in the details of it all.

Much to the despair of Maple Leafs fans, not to mention interim GM Cliff Fletcher, all their top players with no-trade-clauses, refused to waive them for the ultimate benefit of the team. Say what you will about it, but the fact behind it all is that all those players simply liked Toronto as a city for their families and they liked their teammates, and did not want that to change. That meant that one particular detail outweighed what most thought were the biggest concerns in what was best for the Toronto organization or what was best for a player (e.g. winning a Stanley Cup). Therefore we cannot make light of the details, and seemingly more and more often, these details are the deciding factor when later on when players in the same or similar career and/or life changing decisions are asked in interviews what prompted their final decisions.

With all that in mind, we need to dispel some myths and misconceptions about the Penguins situation first, and at the same time introduce some details that not all are aware of:

  1. Marian Hossa’s cap hit is $7M a year. Not quite. Hossa’s present season salary is in fact $7M, but his cap hit is of $6M instead, because his contract was broken down through three years, with the last year being the highest paying. That means that at the time of the lockout, both Rich Winter and Atlanta came up with a figure of $6M/year as Hossa’s worth. Keep in mind that Rich Winter is described among the league and especially GMs as having double fangs 5 inches long each, and have the attitude of a scorned billionaire’s ex-wife, wich means that is all that Winter was able to get out of Atlanta.
  2. Pittsburgh cannot afford an open-market value contract of Marian Hossa. There is no money problems in Pittsburgh. Aside from a rare, bottom feeder season, there have never been attendance problems in Pittsburgh either, always averaging at least a healthy audience. More so now, when Pittsburgh has broken all prior attendance records for their team, and have a streak of consecutive sold out games that dates back to last season. To top it off, the Penguins had to refuse season-tickets request, just so that there would be some tickets left for people looking to go to games who could not afford season tickets. They presently have a list of people requesting season tickets, that is over 1,000 requests long.

    Yes, their present arena does not make as much money as a new facility would (hence the push for a new rink), but the main reason for that was suites, as anyone versed in the subject can testify is the case in any rink around the league. Those are the real money makers. Now, the Pens lucrative years in their new facility are not here yet, but they are only two years away, which means lines of credit are wide open for the Penguins organization, if they so wish, and that does not account for the Burkle factor.

    The Penguins are not specifically owned by Mario Lemieux, the person, but by the Lemieux Group LP, which is composed of Mario, Ron Burkle, and several other investors. Burkle however, is the key figure here, a multi-billionaire who Forbes magazine estimated with a continuously growing present worth, recently coming close to acquiring the Dow Jones Corporation. Burkle in past years, had been nothing short of a silent partner, but ever since Mario’s request and the dealings for a new arena, although conspicuous, he has been very much highly interested in his team. It was Burkle who brokered the deal for a new arena, it was Burkle who was involved in the Shero talks before deciding on acquiring people at the trade deadline, and it was also Burkle who sent a private jet at the disposition of Marian Hossa, then flew himself to Boston to meet privately with Hossa, who was utterly impressed by his account. The word around the Penguins organization is that Burkle has given carte blanche to Ray Shero to make this a Stanley Cup team, and that is not a small thing to keep in mind, if you take economics into the equation.

  3. The Penguins cannot have more than 3 prominent players on their roster after this season. People simply do not understand the cap-hit in Pittsburgh and their contracts. The present cap hit for the Penguins in this season, including Marian Hossa’s $1.3M pro-rated hit, is of around $38.5M. That figure includes all bonuses. The Penguins’ next season cap hit is presently in the neighborhood of $27M, and that includes Sidney Crosby’s new contract, but it has several players that need to be signed. That figure also includes Evgeni Malkin’s and Jordan Staal’s contracts. Who is left (that matters) to be re-signed? Hossa, Malone, Roberts, Laraque, Ruutu, Hall, Beech, Taffe, Dupuis, Eaton, Orpik, Conklin, and Fleury, with the last one being the only restricted free-agent. Out of those, all of Roberts, Ruutu, Beech, Eaton, Orpik, Taffe, and Conklin, are not highly expected to return for different reasons. Leaving only Hossa, Malone, Laraque and Fleury as sure bets for the Penguins to try to re-sign, along with strong possibilities for one or either of Hall and Dupuis. The idea behind it all, is that at $27M and with a cap hit of at least $50M, the Penguins can certainly afford to sign all of their targeted players, even in an open market.
  4. Evgeni Malkin’s contract is due and has to sign a new contract before next season. Malkin’s contract does not expire until the end of the 2008/2009 season, just like Staals, at which point they would be a RFAs. However, teams are allowed to negotiate contracts a year prior to the expiration of their contracts, before the players become RFAs. This is what was done with Sidney Crosby, who signed a contract during the off-season, but is still playing under his $3.7M/year (bonuses included) contract, and certainly the Penguins will plan to do the same with Malkin, but his contract won’t be of any value until the 2009/2010 season. This is the same with Staal, but something else to be understood is that everyone foresees a foregone conclusion that all of the Penguins future RFAs are all big-ticket contracts. Nothing can be further from the truth. Take Marc-AndrĂ© Fleury, for example. Fleury, although still viewed as a very promising goaltender, has not shown yet to be a solid reliable goaltender, taking away from his worth and value. Even if the Penguins organization still believe, at least up to not so long ago, that Fleury would be a prominent goaltender in the future, he has not shown yet to be worth a high salary around the league. This exact case is the same for Jordan Staal. All are figured to obtained raises, but the amount of the raises is pretty much a heated debate, but no one of sense sees it to be higher than $4M-5M/year at most, in any of their cases, if even that high at this point. Take into account that the highest paid player in their roster, and arguably best player in the world, will average $8.7M/year and all Penguins players have no choice but to be influenced by that contract.
  5. All free-agents are looking to cash-in and will go to the highest bidder. While this certainly has been the case with some, it is not the case with all, and not specifically with the players in the Penguins organization. Take Gary Roberts, who was not sure in any terms to re-sign with Pittsburgh when he was first traded, but then became absolut
    ely animate about the organization and not wanting to go anywhere else within weeks of playing in a Penguins uniform. Up until the trade deadline, Pittsburgh did not have a lineup, but a family. These players very much like each other to the point of always being around each other. They get together routinely as a group also, including the apparent mandatory pre-game football (soccer for some) rituals as a group, something even Roberts joined. They hang out together, and their extended families do too, with wives and girlfriends seen routinely spending time together. In fact, it is almost impossible to see a Pittsburgh Penguins player anywhere by himself. You are almost guaranteed to see at least two at a time anywhere.

    This team is not only promising on the ice, but also gets along extremely well. They truly like each other, to the point of some in the organization being quite upset when the Hossa trade happened, because of the loss of Armstrong and Christensen. It went to the point of tears and rage, in some cases, which thankfully quickly subsided. It is yet to see what the deadline trades have done, but all indications so far, and especially from the new players who joined the organization is that the family atmosphere is very much still there. And this cannot be more of a fact with one person specifically: Evgeni Malkin.

    Malkin has become not only an intricate part of this Penguins family, but Malkin has become almost literally part of the Gonchar family. In any situation, if Malkin has a need, Gonchar comes protectively to Gino’s help, both on and off the ice, and the same is true viceversa, with the understanding that Gonchar very seldom has any needs. This also will become a factor at the time of signing a new contract for Malkin this summer, and if anything is of any indication, it is a quite possible trend that will also affect to a degree, the Hossa negotiations. Hossa himself has been not just impressed with the organization, by his own words, but so far seems to enjoy the camaraderie very much, along with the prospect of contending for a Stanley Cup. Whether being politically correct or not, Hossa has mentioned these factors in every interview that involved the question of him re-signing with the Penguins. You have to believe that there is at least a degree of veracity in the will to win a Cup, let alone doing it with players you enjoy to be around with.

Many other factors can be added to this, like the fact that Pittsburgh and Hossa could agree to a relatively short-term contract, and not necessarily a long one, or that the Pittsburgh players themselves have been secretly overheard quietly talking withing themselves about the subject (and how to get around it) for many months, and the thought that has been flying around the league that Marian Hossa is a rental player quickly becomes blurred. None or all of these make a foregone conclusion that Hossa will be back in Pittsburgh either, but the point is that there is opportunity and a quite solid one that he will. The Penguins have time to worry about salaries with at least two seasons to spare, have no money problems in the present or the foreseeable future, plenty of cap space whether the cap is raised or not, and have an almost universal will, starting from their captain, to win at least one Stanley Cup and doing it with this basic group. More importantly, it only takes one of this issues to be the deciding factor, that diffuses most, if not all, of Ray Shero’s contract problems. Do not underestimate the specifics and the details in Pittsburgh. It could make the difference.