Formidable Opponent: Incentives-Based Contracts

Still blue about the Kessel trade? Think about Ricky Williams. In 1999 the New Orleans Saints traded their entire draft for the right to pick a guy who couldn't hack it in the CFL. Williams got in on the Bad Idea Jeans party when he decided to hire a rapper's nascent sports agency represent him out of millions of dollars by signing him to a ludicrous incentives-based contract. Apparently, marijuana leads to bad decisions. Huh. How bad was the deal? Opposing agents couldn't stop laughing:

I recently spoke with a number of well-established agents about this deal and the reviews weren’t good. One guy said, Williams’ agent, Leland Hardy, "will never get another high-profile football client again and if I'm competing against Hardy [for a player] next year, this contract is coming out." Another agent kiddingly said, "Ricky should sue for negligence."What can only be termed as negligible research seems to have gone into determining what statistics were to be used to determine the bonuses, as they were set at ridiculously high levels. What does this have to do with hockey? Well, Godd Till and I usually spend our time on gchat using British football play-by-play cliches to narrate our insults and teasing each other about being tools for imperialist capitalist pigs/the worldwide communist party but this comment by Steve:

For instance I think a player’s salary should be tied to production using contract thresholds. i.e. if a guy breaks a certain point plateau, he earns another million, etc. Players would work a hell of a lot harder in that sort of situation.helped us focus our discussion on hockey. After the jump, we'll discuss whether incentives-based contracts have a place in hockey.

Godd Till

Did you see my comment? SMACK BOOM POW

PPP

Not yet, going now [10 minutes later] nice comment comrade Till. You don't like the idea of moving the NHL towards a base salary + bonuses system rather than 100% guaranteed contracts?

Godd Till

No, I like the idea of guaranteed salaries and no cap. Funny, sports is full of capitalists who want to run leagues like socialist collectives. I'm a socialist who likes my sports fairly laissez-faire. Or put another way, I don't like arbitrary systems that take money from the people I pay to see and into the pockets of the Eugene Melnyks of the world.

PPP

Well, soccer's your utopia buddy. Look at the insanity. Teams are going bankrupt because of excessive debt, they pay out wages that are wildly out of whack with revenues, owners are buying teams with nothing more than debt...wait, that might be a bad example.

Anyway, that is what you are advocating for. Seriously though. I like guaranteed contracts and these guys aren't going hungry but, and I'm loathe to bring it up, in the real world if you sign a massive deal like those guys and then shit the bed you'll get canned and get only a fraction of what's coming to you unless you are a Wall Street banker in which case you will end up billions better off than you deserve.

Godd Till

Unless you have a union to protect your rights on the job... Or if you didn't... you get a system like the NFL that breaks bodies and minds and then tosses people to the curb. No thanks. Plus it decreases competition if anyone can just write off a bad deal.

PPP

No, I'm not advocating that but, if you are constantly screwing up then why should unions protect jobs? I mean, these guys aren't teachers [note: I am joking...mostly]. To a certain extent buyouts allow teams to write off bad deals as does the ability to stash players in the minors. You know, if any team actually had the financial werewithal to do something like that glances at Brian Burke they can get around the millstone of bad deal.

However, I never said that they should move to the NFL model of non-guaranteed contracts. I agree that that part of the NFL is terrible but if a guy has a $2M base and he doesn't meet the targets that would bump his salary up beyond that level then he gets no more than he deserves.

Godd Till

Where's the point in restraining your spending if contracts are non guaranteed? Buyouts are not necessary. What about a guy who exceeds targets that weren't set for him? What about players who get traded? Shouldn't their targets change as their roles do? Couldn't coaches fuck guys over buy burying them? This plan has more holes than the Liverpool squad.

Editor's Note:

It's a unworkable system

PPP

I disagree. How many instances in leagues with bonuses have there been grievances filed by players over coaches preventing them from reaching them? I obviously haven't given this too much thought beyond "Yeah, those assholes shouldn't get paid when they suck" but I would assume that along the lines of rookie bonuses that the league could set what things can be part of the bonuses. And, again, if coaches bury guys then they can file a grievance. If they get traded they still get their base pay.

Godd Till

'If people get injured they can file a lawsuit' is not exactly a best practice. So if they go from first line to third they get screwed out of a bunch of cash, which instead goes to awesome owners like Karmanos, Melnyk, and the cast of thousands in Atlanta. Solid idea.

PPP

Well, It's just like Healy and the NHLPA were threatening to do with McCabe if the Leafs buried him in the minors. That would have cost him money on future contracts if he had spent multiple years in the AHL. And the guy that gets traded doesn't get screwed. His bonus structures are still in place and it's still up to him to perform. If he was traded it's probably either because he is going to a better team (easier to earn bonuses) or he played like shit and he doesn't get rewarded more than he should be.

Godd Till

What? OK, Player A plays top line minutes for the Leafs. He gets powerplay time, is putting up good numbers. Guy gets $5M base pay and is on track for $5M in bonuses. He gets traded to a good team where he gets third line minutes, no powerplay time and thus, no bonuses. Through no fault of his own he gets a pay cut. That system blows.

PPP

And if he gets traded he still gets his base salary of $5M. Where is the injury? He gets the same pay just no bonuses. Is that not enough to feed his family?

Godd Till

HAHAHAHA Explain that to the player!

PPP

I know hockey players are notoriously slow but the idea behind bonuses is that they are extra.

Godd Till

Not under your system! They are set up to reduce base pay! Jesus!

PPP

I thought that you guys didn't believe in organised religion? Anyway, players are already losing money through escrow under the current system because base pay is wildly out of whack with league revenues. I'm not trying to depress nurses' salaries here. These guys are entertainers and if they aren't entertaining why should they get paid beyond what they contribute?

Godd Till

And do you know whose fault base salaries are? OWNERS And yes, I should have said, WENDEL!

PPP

Sometimes idiots need to be protected from themselves. Everyone knows coffee is hot but because of a few litigious Americans that fact has to be plastered all over coffee cups.

Godd Till

I'm sick of people trying to construct a system to protect the owners and general managers from themselves. FUCK THAT! In business if you make a bunch of spending mistakes you should suffer not your employees. Who wants to bail out the BearStearns of the NHL? All this does is subsidize shitty owners and shitty GMs and shitty markets.

PPP

"In business"? First off, beyond 'party business', which I assume is why you were e-mailing me from Cyprus, what would you know about who suffers because of spending mistakes? When CEOs blow it they get a golden handshake and regular folks get laid off glares at Carly Fiorina.

Who suffers when owners and GMs give out terrible contracts? Fans do. I am trying to make a system that protects fans but I guess you hate the working man and would rather protect millionaires in order to punish billionaires.

Godd Till

At the expense of players! This doesn't protect fans, it protects teams that have been poorly run. If the owners can't make money under this current system they are fucking idiots.

PPP

Yeah, yeah, yeah. Meanwhile, thousandaires sit and wonder when the salary cap problems that couldn't be resolved by either side's paid legal monkeys are going to wipe out another season. Boom! And that's how populists win arguments.

Godd Till

The players already gave back a tonne. And by populist you mean 'affecting concern for the common man to justify giving more money to billionaires' you should move South and join the teabaggers, son.

PPP

My signs are too grammatically correct for that shower. The players got younger free agency, no more second contracts, the players gave up essentially nothing of value.

Godd Till

The Leafs would be spending 50% more right now in an uncapped world, so yes, the players did give up something pretty important. You're trying to Rush it up cause you know your plan is illogical. Stop trying to socialize risk to protect billionaire morons who already locked Joe Fan out of one season. See, I can demagogue too. Oh, and they WANT TO KEEP TEAMS OUT OF CANADA OHHHHHH YAHTZEE!!

PPP

Oh shit, the tables have been turned. That's some good demagoguery. I've been hoist by my own petard.

Godd Till

DIG IT!!!!