Dissecting The Deal: The Dollars and Sense

The long, tortuous Ryan Johansen saga finally reached its climax on Monday. Here's a look at what the deal does for each side.

The thunderstorm that blew through Columbus on Monday evening had some stiff winds, lightning, hail and some torrential rain. However, even that turmoil paled in comparison to the uproar created earlier in the day when the Blue Jackets announced that the long impasse with their young center, Ryan Johansen, had come to an end. The wind you felt earlier in the day was the collective exhales of relief from the central Ohio hockey community.

In announcing the 3-year, $12 million deal, both John Davidson and Jarmo Kekalainen sounded fatigued, and perhaps a little irritated. Kurt Overhardt denied any contentiousness or ill-willl in the course of the negotiations. OK, sure. But, as Jarmo reminded the assembled media, "It's time to look forward." So, with that in mind, what precisely does this deal mean for each side going forward?

The new contract is structured with $3 million payable for each of the first two years, and $6 million in the final year of the deal. When the contract expires, Johansen will still be a Restricted Free Agent, having one more year to serve before UFA status kicks in. The three year term came as a surprise to many, as virtually all of the focus had been on a two year bridge contract, and the remaining speculation went to the other extreme -- a long term deal. That the ultimate deal came somewhere in between is predictable, given both the progress of the talks and the timing involved.

The Blue Jackets brass -- Davidson, Kekalainen and RIchards -- were unanimous in their view that a deal had to be done on Monday, as simple logistics would otherwise mitigate against Johansen being able to join the club by opening night. Richards has been particularly direct and matter of fact in insisting that he was concerned only with the players on his squad, and yesterday noted that he would have to do some re-tooling to fit Johansen in. Maybe a bit of hyperbole on his part, but the message is clear. The brass came up with the offer that resulted in the deal, and perhaps much of the apparent frustration that emerged yesterday was due to a feeling that a contract along these lines could have been done long ago.

Let's start with the player's perspective, and see what the deal does for Ryan Johansen. Keep in mind that we had no eavesdropping devices available to us during the negotiations, so we are left to surmise such things as intentions, gleaning information from what was done, what was said and how it was said. We also have to be careful to differentiate what might have been the player's goals from those that the agent had. While they might (and should) have the same ultimate goal in mind, their motivations also might differ significantly.

I don't think Johansen's motivations are particulary complex or esoteric. He had a great year, and wanted to be treated financially as an elite player. I'm not sure he fully grasped the concept that a single superb season does not entitle a player to the pot of gold. We forget that he's a youngster, and he's shown some tendencies toward immaturity in the past, so adopting a somehat unrealistic view toward these contract expectations would not be a shocker. Kurt Overhardt obviously shared his clients desire to maximize revenue, but also apparently wanted to challenge the inherent structure afforded by the CBA, attempting to disrupt the leverage that the clubs hold in the early years of player contracts. (See my earlier discussion of this phenomenon.) So, how did they do?

Given that Johansen's camp started at $6.8 million per year on a bridge deal, the larger gambit clearly failed. Overhardt was unable to elicit a large offer sheet from another club, which would have supplied the leverage he lacked, and the Blue Jackets front office did not bite on the "fear factor" -- i.e. the prospect of starting the season without their star center. So, Overhardt's attempt to alter the leverage structure of the CBA did not work.

So, turning to pure dollars, you need to really look at the contract in two parts. The first two years represent a "bridge" deal at precisely what the club offered from Day 1, so nothing at all accomplished there. It is the year 3 jump to $6 million per year that makes the deal unique, and somewhat more problematic to evaluate. From Johansen's perspective, however, the jump means that a qualifying offer for his final year of free agency has to be $6 million, and if he pushes for a one year arbitration award, the number could go significantly higher. On the down side, they surrendered a full year of RFA status with arbitration rights, and another year of almost certain salary cap increase for $3 million bucks. What addition of the third year did do was get the entire deal to an AAV value of $4.0 million, which appeared to be the battle line all along. In the end, Johansen got a bridge deal that is right in the middle of bridge deals given to comparable players, and better than most, with a third year that provides a decent platform for negotiating a long term deal.

From the club's perspective, they got precisely the bridge deal they wanted, plus an extra year to be sure that Johansen is the "real deal". While the odds seem strongly in favor of that result, anything can happen -- and frequently does. Columbus need look no farther than the Nathan Horton situation for validation of that fact. Through no fault of his own, Horton has been unable to come close to living up to the long term deal that lured him from Boston. That's the world of professional sports, but the Blue Jackets would be remiss if they didn't do everything within their power to obtain protection against that eventuality -- which this deal provides.

Some argue that the $6 million in Year 3 represents a major capitulation by the club. That's not how I see it. First, with an AAV of only $4.0 million for the three years, the club is clearly getting value from Johansen's services. That cap hit ranks seventh on the club. Ask yourself the question " Johansen at $4.0 or Umberger at $4.6?" and the point crystallizes quickly. Additionally -- and as absurd as it may sound -- $6 million is just not that much money in the scheme of things -- and certainly won't be in three years. On a salary basis (not AAV), there are 77 NHL players making $6 million or more today. Given the fact that the CBA artificially created a "re-set" reduction in the salary cap, and if past history is any guide, the cap will grow significantly over the following three years, and with it, the salary expectations of players. So, while a $6 million salary might put you in the top 12% of NHL players today, that's likely to be only a top 25% number in three years. As many others have noted, if Johansen lives up to expecations, the $6 million number is irrelevant -- he'll be making far more than that, which the club will gladly pay. If he fails to live up to expectations, the club has still paid only $4 million for him over the three years, and has the time to trade him, take him to arbitration, whatever.

Besides time, and preservation of the integrity of the CBA structure, the Blue Jackets gain necessary predictability of their salary structure over what promises to be a tumultuous few years for salary cap management. Bobrovsky, Foligno, Atkinson, Calvert, Anisimov, Jenner, Murray, Prout, Erixon, Savard, Goloubef, Tropp and Gibbons all have contracts coming due over the next two years, so some big decisions need to be made . . . and some significant raises handed out. So, while Columbus appears to have a big cap surplus now, that will disappear quickly. Such is the downside of having a young team. On the positive side, the club has set some clear precedent for the players coming off of their entry level deals.

In the finaly analysis, the Blue Jackets seem to have clearly accomplished more of what they wanted to acheive in this deal than the Johansen camp did. While there was certainly some acrimony generated during the process, there is really little reason to think that it will have a long term impact on the squad. Johansen will be measured by his performance on the ice over the next three years, and will be rewarded in keeping with his contributions. Time to play hockey.

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