The Montreal Canadiens hedged, but eventually gave in to the contract demands of P.K. Subban, and signed their star defenceman to an eight year extension yesterday for a total of 72 million dollars. The 9 million dollar cap hit is the highest of all NHL defenders, which leads to the question, is Subban deserving of being the highest paid blue liner in the league?
Well, first of all, Subban does carry the biggest cap hit, but is not the highest paid defenceman in the NHL next season. In fact, he is not even close to being the highest paid defender in the league.
The way that Subban’s contract is structured, the Habs defenceman will earn 7 million dollars for the next two seasons, followed by two years of a 10 million dollar salary, then two years at 11 million, and finished up with a pair of years at 8 million dollars.
So next season, Subban will pocket 7 million dollars, but count as a 9 million dollar cap hit, since the average annual value of his new deal is 9 million per year.
If you look around the league, you will find plenty of defencemen making more than 7 million next season, and one guy who makes twice as much as Subban will in 2014-15.
Subban’s 7 million dollar salary is the same number that Zdeno Chara, Drew Doughty, Dan Girardi and teammate Andrei Markov will earn next season. All of these defenders trail Brian Campbell, Kris Letang, Dion Phaneuf, Ryan Suter and Shea Weber in earnings. Weber, thanks to an incredibly front loaded structure to his contract, which was originally an offer sheet that was tabled from the Philadelphia Flyers, will make 14 million dollars this season.
So this puts Subban in a tie for seventh highest paid defender next season. In 2015-16, Doughty gets a slight raise, which knocks Subban down to eighth highest paid defender, though he still has the highest cap hit. When Subban’s salary jumps to 11 million in the 2016-17 and 2017-18 seasons, he will still trail Shea Weber in take-home pay, as Weber will earn 12 million each of those years.
The reason that defencemen such as Weber, Suter and Duncan Keith can have such high salaries, but lowered cap hits, is they were signed before the 2013 lockout when there was no limit on contract length. Subban got the new maximum term from the Montreal Canadiens on an eight year deal, but Weber, Suter and Keith all signed more longer than a decade.
Teams would sign their top young defenceman to extremely long contracts, and tack on a couple of years of minimal earnings at the end to lower the overall cap hit. Weber makes 14 million each of the first four years of his deal, but will only make 1 million for each of the last three. In the first eight years of his contract, the Nashville Predators defender will earn 92 million dollars, 20 million more than Subban will take home in his eight year deal.
The same goes for Minnesota Wild blue liner Suter, who makes 12 million in the first year of his deal, and 1 million in the 13th year. His earnings in the first eight years is 80 million, which would be a 10 million dollar cap hit based on his salary over what would now be a max length contract.
These contracts are now illegal in the new NHL, and the teams that took advantage of the loophole now face potential cap recapture penalties down the line.
So, though Subban is now the highest cap hit among NHL defenders, it is really only because the Canadiens couldn’t use the same loopholes that were available before the 2013 lockout. If they could, they could add on two more years at 1 million dollars, which would drop the cap hit over a ten year deal to 7.4 million dollars, which is below Suter and Weber.
Subban is not in line to be the highest paid defenceman in a season until 2018-19, when Suter’s salary drops to 9 million and Weber’s drops off significantly to 6 million. The Habs defender may take home more money than any blue liner in that season, but with Erik Karlsson, Drew Doughty, Ryan McDonagh and Oliver Ekman Larsson all due new contracts in the 2019-20 season, you can bet Subban’s 9 million dollar cap hit will be far from the top of the list at that point.
Also, young defenseman such as Seth Jones, Hampus Lindholm, Ryan Murray, Morgan Rielly, Aaron Ekblad, Doug Hamilton and Griffin Reinhart will be earning big paydays by then in a league with an ever increasing salary cap.
This is just the new reality of salaries in a cap world with fixed term contracts. Players were willing to sign 13 year contracts with a few seasons of minimal pay at the end of the deal, but players are not going to do the same over an eight year deal. Without a loophole that can lower annual cap hits, you are going to see players making much more money on a per year basis, which drives the cap hits through the roof.
Jonathan Toews and Patrick Kane of the Chicago Blackhawks both signed identical eight year, 84 million dollar deals, and will be the first two players to earn a cap hit higher than ten million per season when the new deals come into effect in 2015-16. The Hawks were able to significantly lower the cap hits of Marian Hossa and Duncan Keith by giving them 13 year deals with a tiny fraction of their earnings coming in the final three seasons. You can imagine they would have liked to do the same with Toews and Kane, but with the new maximum length rules in effect, they are unable to lower the cap hits, and therefore have to live with a 10.5 million dollar cap hit per season for each of their superstars.
The salary cap is currently 69 million dollars, and Subban is going to take up 13 percent of the Habs cap this season. Since the cap was introduced in the 2005-06 season, it has grown each year except when there was another lockout in 2013. The cap has gone up an average of 4.3 million per season, and if this continues, it would surpass 90 million by the 2019-2020 season.
This means that in year six of his new contract, Subban would be earning less than ten percent of the Habs cap, while Doughty, Karlsson, McDonagh and a few other young defenders will almost definitely be earning a higher cap hit by that time.
Once the new reality of young star defenders signing deals of eight years or less begins to settle in, Subban’s contract will fit right in, or even trail many of the bigger tickets. He just happens to be the first star defender to sign since the new regulation was introduced in 2013, which makes his contract look like an outlier at the moment.
Though he is the highest cap hit right now, Subban is not the highest paid defenceman in the league, and only will be in the 2018-19 season. By that time, a player signing a contract with a cap hit over ten million per season will be a regular occurrence, and with the salary cap continuing to climb, Subban’s deal will look better and better with each passing season.