September 13, 2008

Eric Staal Contract and Economics

On September 11th Eric Staal signed a 7 year, $57 million dollar contract with the Carolina Hurricanes. That's great for the Canes, as they have their franchise player locked up for the next while. (Note to all teams, on year 2 of the contract you should have an idea as to who will be your next franchise player, drafting wise)

Maybe not so great when you look at it economically. Sure, after this season Stall will count towards $8 million on the cap, and with it consistently going up, by year 7 that could be a steal. But lets look at the current economic situation in the U.S.

Now I'm not an economist, so I don't know details, but I do know cost of living is rising faster than the average fans' salary. I would suggest the tough times are upon us now and will continue to be here for at least another three years or so (just a guess). So, if a Canes ticket is too expensive now for 50% of the public, how many people are going to be able to afford a ticket in three years, possibly when money is even tighter?

All I'm saying is maybe Carolina was thinking about their future signing Staal to a long contract> Or maybe they weren't, because in 3 to 5 years will people be able to afford a luxury like a Carlolina Hurricanes hockey game? Especially seeing as Carolina is not a top hockey market. They do have a group of loyal fans, but it's not nearly enough to support the team during trying times.

Also, Staal's contract is somewhat backloaded. When you mark it against the cap it is a simple formula;

(Total salary / length of contract) = amount against the cap

But Eric will be paid more and more as each year passes. By the last year of the contract he will be making $9.5 million. How can you pay that when your building may only be a 1/3 full?

Just a thought, as I may end up completely wrong. This is also another reason why it is not a good idea to sign players to a long term contract, as you can not predict how wealthy your team will be.

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