Friday, July 25, 2008

garbage goes in garbage can, makes sense

Noam Chomsky offers up some very insightful and succinct answers to thoughtful questions from Vincent Navarro.

Topics range from the strict doctrinal requirements of a free but managed society, the PR campaign that masquerades as a Presidential election, the pressures of consumerism, the history behind American global dominance in world affairs, the joys of a state-based economy, and the possibility of an actual and semi-fledgling International. A brief excerpt has:

One of the reasons for the extraordinary pressure of consumerism, which goes back to the 1920s, is the recognition by the business world that unless it atomizes people, unless it drives them to what it calls the "superficial things of life, such as fashionable consumption," the population may turn on them. Right now, for example, about 80% of the U.S. population believes that the country is, in their words, run by "a few big interests looking out for themselves," not for the benefit of the population. About 95% of the population thinks that the government ought to pay regular attention to public opinion. The degree of alienation from institutions is enormous. As long as people are atomized, worried about maxing out their credit cards, separated from one another, and don't hear serious critical discussion, the ideas can be controlled.

Thursday, July 10, 2008

Tit for Tat: Equivalent Retaliation as a Lesson for NHL GM’s

Under the current NHL Collective Bargaining Agreement, the tactic of signing a team’s Restricted Free Agents to an offer sheet has already become as prevalent in the most recent two years as the final ten years of the previous agreement. The reasons are probably somewhat debatable, though I would argue it has to do with a combination of: 1) the fact that the unrestricted free agency age has been lowered, creating a more rational salary structure with respect to a player’s output. Younger players are more often signed to long-term, lucrative contracts (cf. Kovalchuk and Nash), which has contributed to the elimination of the cheap “second contract.” Offer sheets are a way of teams extinguishing other teams’ hopes of signing their RFA’s on the cheap. 2) team payrolls are capped at a fixed number, creating a more uniform salary structure across the league and increasing the competition for players. 3) the compensation for acquiring a team’s RFA, draft picks, has been devalued. The mantra coming out of the lockout from hockey executives and writers has been that drafting well is more important than ever. I think this is incorrect. The NHL Entry Draft remains the prime way NHL teams acquire players (free agency and trades coming in way behind), and I’m not suggesting that drafting well isn’t the single most important way to create a good hockey team (of course it is). It’s just less important now than under the old CBA where you kept players until they were older and less effective (31) and where you got to underpay young players coming out of their entry level deals (look at the second contracts signed by Lecavalier and Gaborik and compare them to what Getzlaf and Perrey are making now). The great thing about drafting and developing a player like Patrik Elias, besides having a great player, is that you could sign him for relatively cheap and you kept him throughout his best years. Under the current CBA, it’s still important to draft players like Jeff Carter, but you certainly will not receive a discount when signing him (unless you're Bob Gainey and you have the lure of playing with your brother, and in the greatest city in North America, but I digress), and it’s not totally clear how long you’ll be able to keep him. The first round selection that was used to draft Caeter is probably worth less than now than the second round selection used to draft Elias. This decrease in compensation value makes the offer sheet a more attractive tool for teams to use.

So far, however, while the threat of the offer sheet has had an effect on contract negotiations, Mike Green’s late night June 30th deal for $21M over four years being a good example, the offer sheet itself has seen only limited use under this CBA: Ryan Kesler (matched), Tomas Vanek (matched), Dustin Penner (not matched), David Backes (matched), and Steven Bernier (matched). The last two examples are particularly interesting and I think the fallout could have important implications as to how teams approach the offer sheet process.

The Vancouver Canucks signed St. Blues RFA David Backes to a 3-year/$7.5M offer sheet on July 1st. Backes was coming off a fairly solid season with the Blues as an intimidating power forward (he ranked fifth in the league in hits). He spent most of his even strength time on the second line and saw regular power play action as well. The Blues immediately, and quite predictably, matched the Canucks’ offer sheet, as they were not going to give up a promising forward who is just becoming an effective regular NHL’er for a mere second round draft selection. It’s unclear if Canucks’ GM Mike Gillis actually believed there was a chance he could acquire Backes, or was simply trying to drive up the salary structure of a Western Conference opponent. The Blues kept a player they certainly wanted in the fold, but at a higher price than they wanted, or even felt they needed, to pay. The Blues got their chance for payback less than a week later when the Canucks acquired similarly skilled power forward Steven Bernier from the Buffalo Sabres. St. Louis promptly signed Bernier to a 1-year, $2.5M offer sheet, which the Canucks were forced to match. Let’s look at the counting numbers for the two players, as well as those from other similarly aged power forwards around the league:

It is remarkable how similar Backes and Bernier’s stats are. Their even strength and power play scoring and ice time numbers are almost identical. Backes played against slightly better competition but with better teammates, likely because Bernier was on a deeper San Jose Sharks team and thus saw more third and fourth line duty. Neither player saw much penalty killing time. That their cap hits should be identical ($2.5M) seems appropriate, but the Blues did something very clever in their offer sheet: they signed him to a one-year deal. This means that Bernier will be an RFA again after this year, and with a strong season in Vancouver (where he will likely get top-6 minutes) he could stand to gain a significant raise through either arbitration or the threat of another offer sheet. The Canucks will have to tender a qualifying offer equal to his $2.5M salary and, barring a backwards step in his development, it seems likely that Bernier will get a raise going forward. This is certainly more than what the Canucks would have liked to pay for Bernier. Statistically, Bernier (and Backes) have very similar numbers to Brooks Laich and Andrew Ladd. Laich has better PP scoring numbers than Bernier and Backes, and Laich has shown an ability to effectively kill penalties. Ladd has an edge on even strength scoring statistics over Bernier and Backes. Yet both Laich and Ladd both recently signed contracts at significantly reduced rates compared to the offer sheet duo, Laich for 3-years at a cap hit of $2.07M, and Ladd for 2-years at a hit of $1.5M.

The Canucks’ poaching attempt and the inevitable quid pro quo action by the Blues resulted in an escalation of each team's salary structure, as well as the diminished value of assets in Backes and Bernier (in that their salaries are infalted). Had the Canucks not signed Backes to the offer sheet, Vancouver and St. Louis would have likely retained their players at a significantly reduced cost. I think there’s a lesson to be learned by other GM’s around the league from these actions and their results. Unless a team is up against the salary cap (Anaheim last year), or in some other way financially constrained (needing to hit the midpoint for revenue sharing purposes), teams are going to match any offer sheet for a mid-level player, that is, one in which compensation will be, let's say, a first round selection or less. When Edmonton signed Vanek to a wildly inflated offer sheet, the Sabres had at least a legitimate decision to make in light of the cap space (and real money in their case) required and the fairly significant compensation they would have received (four first round selections). However, offer sheet signings outside these contexts seem only to drive up the costs of retaining players league-wide, with the prospect of eliciting retaliatory moves by other clubs. The Canucks gained nothing from their offer sheet attempt except an inflated price for their own player. Interestingly, they traded away a second and third round selection, yet they would have only received a second round selection had they not matched the Blues offer. Not only did Mike Gillis learn a valuable lesson from this process, one has to imagine other GM’s around the league took note as well. Though I cannot imagine there exists at this point any type of 'unwritten code' around the League that prevents teams from signing RFA's, GM's are going to have to be weary of making moves that may elicit a delterious equivalent retaliation, as this episode demonstrates.

Sunday, July 6, 2008

Basically the right amount of Green

Mike Green’s 2007-08 season transcends trite descriptions like “breakthrough” and wades deeper into the infrequent waters of “revelation,” “grandiloquence,” or even the sincere “has that ever happened before?” Green, despite sporting a brutal faux-hawk and speaking in a soft and slow mumble to the point of listener distraction, played his first complete NHL season last year. By the way, he happened to lead NHL defenseman in goals while doing it. That’s an incredible feat. I think Bobby Orr led the league in defenseman goals in his first complete season, but I’m not sure anyone has done it since (I know some true greats like Paul Coffey and Brian Leetch, the two players from recent memory that remind me the most of Mike Green, did not do it).

Mike Green is probably the fastest defenseman in the league while carrying the puck. You know the guy in the beer leagues that leisurely picks up the puck from behind his own net and with a couple big strides moves up ice, head up, weaving in and out of opposing players like a pylon drill before closing in on the net and making one too many moves allowing the goalie to pull off a successful, though desperate, poke-check? That’s Mike Green. Except he’s doing it against NHL players. He combines ridiculous skating ability, I like to call him “crazy legs,” with some high-end puck-handling skills. He has an impressive toe-drag that he isn’t afraid to use on his side of the red line. All of this resulted in an 18-goal, 56-point campaign, several highlight end-to-end rushes (many of which resulted in nothing but open mouths), and the attention of the entire league. With the expiration of his entry-level deal and the ensuing threat of a massive restricted offer sheet this summer (how many teams can hope to draft and develop another Mike Green in the next 10 years?), Green was in line for a huge payday. He got it, to the tune of 4-years and $21-million. Let’s look at how Green compares to some of the other top defensemen in the NHL who have just completed their entry-level deals.

Phaneuf is the gold-standard among a pretty special group here. He has now produced three stellar NHL seasons, was recently nominated for the Norris Trophy, and was only a short while ago discussed in the same breath as Ovechkin and Crosby. Phaneuf had a pretty great season last year, playing a ton of minutes at evens and on both specialty teams. He put up a decent .95 ESP/60 but more than made up for it with an impressive power play scoring rate, 4.45 PPP/60. To put that in perspective, Nick Lidstrom recorded 4.47 PPP/60. Phaneuf also played significant minutes on the PK, and the Flames were better for it when he was on the ice. Phaneuf’s ES Relative Rating is .42, which is good but not great. He played decently tough minutes but with very good teammates (often Iginla and Langkow). Robyn Regehr, on the other hand, also had a Relative Rating of .42, but did so playing tougher comptetion (usually got more of the minutes against the other team’s top line) and with much weaker teammates. Regehr’s 5-year, $20M contract is an absolute steal.

Green’s offensive numbers, driven by his skating rather than a booming shot, are nevertheless pretty comparable to Phaneuf’s. He beat him with a fairly impressive 1.11 ESP/60, but came up well short with 3.28 PPP/60, which is only good for third among this group. This actually makes sense given that Green’s greatest asset, his wheels, is somewhat neutralized on the PP as it is more or less a half-court game. Green got very little PK time, a wise move with the way he clears the front of the net. Green paired with Morrison behind Ovechkin and Co., which explains his high Quality of Competition, higher Quality of Teammates, and ridiculously high CORSI number. Of the remaining four defenseman, none came close to touching Green’s ESP/60. Both Gilbert and Burns put up nice Relative Ratings (.50 and .93, respectively) and, not coincidentally, both of them saw significant time on the PK. Those two can both defend quite well (1.42 and .84). Burns also put up good scoring numbers: .90 at evens (good considering he’s playing for Jacques Lemaire) and 4.15 on the PP. Despite not scoring 18 goals like Green, he does have high-end offensive ability that he has matched with demonstrable defensive acumen. Had he not signed his extension at the beginning of the season and instead waited for July 1 like Green, it’s hard to imagine he wouldn’t have received a contract in the 5M range.

One thing that appears clear from this set of numbers is that teams pay a premium for offense. Tom Gilbert, though facing tougher competition and with worse teammates, still put up respectable ES points (.98). Though he only got 2nd pairing PP time, he still nearly matched Green in output (3.01 to 3.28). Instead, Gilbert played significant PK minutes and played them well (.84 Relative PK rating). He signed his contract only a few months before Green, but got much less money for a longer term ($4M for 6-years) and gave up three years of unrestricted free agency whereas Green gave up none.

I think Green’s contract is more or less appropriate given the market. The Caps clearly weren’t going to get an insane hometown discount like Regehr gave up (it can’t be that nice to live in Calgary, can it?), and so they did well to avoid a $6+M offer sheet, which I can only assume would have, and certainly should have, been coming. My only complaint is the term, four years is pretty short for a defenseman who’s just coming in to his own and who’s going to be a UFA now at the age of 26. Can you imagine what Mike Green is going to be worth on the open market then? What are teams that haven’t had anything resembling a dynamic blue line presence in years (Atlanta, Toronto, the Islanders) going to be willing to pay to sign a player like Green who can single-handedly get the puck going in the right direction?