Tuesday, 24 June 2014

PK Subban's Next Contract


All eyes are on the Montreal Canadiens and their superstar defenceman PK Subban this summer to see what will come of this round of contract negotiations. A lot has been made of what Subban's price will eventually be when all is said and done but many agree we will be looking at a relatively large number.

Lets hop in George Michael's sport machine and travel back to 2012. Subban is coming off his rookie deal and needs to negotiate a new deal with Montreal. Based on strong speculation it is believe that Subban and his agents thought 5 years at a $5 million cap hit was fair market value for his services. The Canadiens astute GM, Marc Bergevin, decided that he would not be pushed around by some hot shot RFA, so he stiff armed the young star by forcing him into a 2 year x $2.875 million cap hit bridge deal. The Canadiens bet against their young defenceman and are now about to pay the price.

In the past two seasons the hockey world has witnessed Subban's stock as a hockey player rise astronomically. He cracked the strongest and deepest group of defenceman assembled over the past two years on Team Canada and only couldn't crack the starting line-up due to the obscene theory that professional superstar hockey players seemingly crumble if forced to play on the side of their ice that doesn't correlate with the way they hold their stick. One of those two bridge seasons was also capped off by a Norris Trophy marking him as the best defenceman in a given season, which pretty much speaks for itself when you consider who he has joined on the list of previous winners. So let's start the process of nailing down a price tag.

Andrei Markov

Andrei Markov, PK Subban's most common defence partner, recently inked a new 3 year deal with the Montreal Canadiens worth $5.75 million per season. This deal can make us very confident that Subban should exceed that cap hit fairly comfortably due to the fact that 1) he is much younger, 2) he makes Markov much better when they are on the ice together and 3) is appreciably better than Markov in just about every facet of the game of hockey (no slight to Markov).

Defensive Issues

This is a slight tangent against people who say to use the "eye test" but it is very important when considering a player who has a well defined reputation. Subban's reputation is wrongfully that of a player with defensive issues the root of which I think can be summed it up brilliantly in this post by Tyler Dellow:
If someone asked me what I think the biggest failing of the eyeball test is, I’d respond that it’s the emphasis on the big mistake. There are gigabytes of information contained in a hockey game. So much information that I think it’s difficult for anyone to take it in and organize it rationally. The way that our brains deal with that is by focusing on the big mistake.
What is the big mistake? The big mistake is the play that leads to a goal against. When we see a player who’s made a bunch of big mistakes in a row, we get down on him. 
Subban falls victim to this method of thinking via the created perception that he is a high risk high reward player who therefore is a defensive liability, this couldn't be further from the truth. He does make his share of mistakes and defensive lapses but they are not substantially more frequently or costly than those of any other elite defensemen. Check out these clips of three high end NHL defenceman who are all shown to have made costly defensive lapses seemingly have never received the same depths of criticism.







Comparables

So now lets break down the statistics a little further and try to get a better look at how Subban stacks up versus other elite defenceman. Here I have complied the top 10 paid defenceman (pre-Markov signing) in the NHL along with 2 players who are in the top 20 but who signed their deals right after their Entry Level Contracts expired (Ekman-Larsson and Myers).



Subban stacks up pretty favourably with all of his future cap comparables. Focusing first on his usage we can see that at even-strength Subban was given about average zone-starts for what we tend to expect from a defenceman of his calibre, this lets us reasonably assume his stats aren't due to sheltered usage (far right of the graph) or extremely tough playing conditions (far left). We can also see that he occupies an absurd amount of time on a top Montreal's powerplay which should really come as no surprise when you take his blistering shot and offensive instincts into account. Also, you might note his minuscule usage during shorthanded situations which I would chalk up to the wrongful perception that Subban can't play defence (see above) and newly extended Canadiens coach Michel Therrien's wacky personnel decisions (see Douglas Murray being his 2nd most used defenceman on the penalty kill).

Subban falls in the midrange for the majority of these categories which is no slight against him, showing that he clearly belongs in the conversation to be one of the sports best paid. His most impressive feat though would probably be his leading CorsiRel%. Subban essentially is driving the possession bus for all of his team, raising the play of his teammates and dictating the play when he is on the ice. Needless to say, it is very impressive.

Money

So once again, what should Subban be paid? For starters, I think it is safe the say that the term will be 8 years since there is really no reason for either party to want anything else. The only other possible scenario would be if Subban only wants 2 more years so that he can be free to walk as a UFA after that contract, which won't happen but that is really the only conceivable way they wouldn't go the fully allowed 8 years.

An general overview of NHL salary structures breaks down as follows. When a player of this caliber typically enters the league they do so on a 3 year cap-controlled Entry Level Contract. Once that contract expires the team still controls them as a Restricted Free Agent for the next 4 years. Since a team owns these players rights for those 4 years they have the leverage to negotiate a discount rate. After this term a player becomes an Unrestricted Free Agent and can be offered a contract by any NHL team effectively driving up the price for their services up to full market value. This methodology can help us explain, in part, how Drew Doughty and Dion Phaneuf can have seemingly nearly identical contracts. Doughty's includes 4 RFA years that can be negotiated to below market value while Phaneuf's entire 7 years are UFA years which cost more as a typical rule of thumb.

Looking at Subban's situation we see that on a potential 8 year contract, only 2 of those could be accounted for at a discounted RFA rate. It's tough to estimate what the cost of these 2 years for Subban's service would cost but I will put it around $7.5 million per year range which is what Shea Weber's cap hit was determined to be by an independent arbitrator. The trick then becomes what to make of his 6 remaining UFA years since the two biggest cap hits also come on contracts with absurd lengths to offset the total cost (Weber and Sutter). Combine all of this with a rising salary cap in the upcoming seasons (I have no clue what the rate of growth will be which is why I didn't try to specifically use it in this determination) and Subban has a strong case to become the highest paid defenceman in the game.

Everyone will have a different idea of what Subban deserves and thats fine, it is truly difficult to nail down an exact idea of a player's worth. As of now though, my best estimation of fair market value for PK Subban would be 8 years X $8.25 - $8.625 million per year.