A $61.5 million dollar contract for Caufield? New data could make all the difference in comparing contracts

Jeff Drouin
September 28, 2022  (11:59 PM)

With every NHL contract signing, it is inevitable that there will be comparisons. The best example was the recent signing of Nathan MacKinnon, which caused a huge reaction in the traditional media and on blogs.

Many wondered why, as good as he is, MacKinnon would become the highest paid player in the NHL. It is important to note that this status will only be achieved next season, if no one signs for more money by then.
Most of the comparisons are based on the average salary of $12.5M that the forward will earn next season. Many feel uneasy that MacKinnon will be paid more than Connor McDavid, but is he really? Is the future salary of the Avalanche's number 29 really worth more than the Oilers' 97?
There seems to be a misunderstanding of salaries in the NHL and the final amount should not be the basis for comparisons. Instead, the impact (%) of the contract on the team's payroll at the time of the signing should be compared.
You don't have to be an expert in economics to know that the value of money increases from year to year. A $10M salary signed in 2022 is not worth the same as a contract of the same amount signed in 2018. Knowing this, why continue to insist on comparing salaries? The only thing that will not change from year to year is the weight of that salary on the payroll at the time of signing.
The excellent site CapFriendly, in addition to doing a great job of mapping contract data across the NHL, offers the option to see how much a contract is worth on his team's payroll. So we can actually compare the different contracts in the league notwithstanding the dollar value.
Let's get back to MacKinnon's contract. At the time of his signing, not activation, the deal was worth 15.27% of the club's payroll. This may seem like a lot, but it's in line with the contracts signed by other stars in the league in recent years. Let's look at it at the time of signing their respective deals:

If we analyze the table, we can see that Connor McDavid is, in absolute terms, still the highest paid player in the NHL. MacKinnon would rank as the 2nd highest paid player based on his impact on the payroll at the time of signing his deal.
With this basis of comparison, agents (and the player) can more easily play the comparison game. It is easy to say that a player deserves a salary comparable to another one, and to transpose his impact on the mass in equivalent salary for the current year.
Let's take the analysis a step further and look at the CH. Excluding Carey Price, the player with the biggest impact on the club's payroll is Nick Suzuki. His contract signed in 2021 puts him at 66th in this ranking with an impact of 9.66%. He ranks ahead of Kevin Fiala (9.55%), Brent Seabrook (9.63%), Quinn Hughes (9.63%) and Josh Norris (9.64%). Removing Seabrook from the comparison, Suzuki's value is highly comparable to the other three when they signed.
It will be interesting to see who will be the comparison used to transpose Cole Caufield's future contract. In this regard, Jordan Kyrou and Clayton Keller are good comparisons. They each signed for $65M and $57.2M over 8 years, which equates to 9.85% and 8.77% of the mass at signing respectively. So out of $82.5M, which is the current NHL payroll, Caufield could get a salary between $7.24M and $8.13M over 8 years when doing the math... That would give a contract of $58-65M, in total, for the CH's young scorer.
A $61.5 million dollar contract for Caufield? New data could make all the difference in comparing contracts

Do you think signing Cole Caufield at $7.9 million a year for eight years would be a good deal?

Yes10145.1 %
No5725.4 %
We have to wait6629.5 %
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