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A Salary Cap Consultant’s Thoughts on Labanc’s Next Contract

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Kevin Labanc, San Jose Sharks
Credit: Douglas Stringer/Icon Sportswire

What will Kevin Labanc make next year?

Professional salary cap consultant Idriss Bouhmouch is thinking lower than some projections for the impending RFA.

Bouhmouch’s The Hockey Code supports NHLPA agents and NHL teams — he shared a peek at his 360-degree NHL contract consultation process and a Labanc projection with San Jose Hockey Now.

Sheng Peng: When consulting teams and agents on contract negotiations, can you talk a little bit about your approach? You really have to have an understanding of both sides.

Idriss Bouhmouch: I aim to bring a really comprehensive approach as there’s multiple factors that would influence a negotiation. Things like how much money is left on the cap, things like where does the player fit in the internal pecking order, age of the player, what’s his perceived ceiling, etc. It’s a long list that requires plenty of research.

Also, you have to look at the player’s side and what’s coming from there. A great example of where personal life influences a decision was seen with Jacob Trouba. His wife is a talented doctor and the couple decided Winnipeg was not where they wanted to be long term. Hence, a trade to NYR.

There’s a number of variables that speak to the people side of the business. Generally, there is not enough appreciation for the subtleties of personal situations, and how those affect the final agreement between both parties.

SP: What were your thoughts when Kevin Labanc agreed to a one-year, $1 million dollar contract with the San Jose Sharks last summer?

IB: This was a great example of an experienced GM in Doug Wilson really taking advantage of all the leverage granted to Managers and Clubs via the CBA. 

He’s a hockey executive who’s experienced but who will approach things less conventionally — he won’t leave any stone unturned. He uses leverage as much as he can, and this is what’s expected from decision-makers at the highest level in pro sports.

Labanc was coming out of his entry-level contract and he didn’t have any arbitration rights. When you’re an elite potential type of player coming out of his ELC like a Matthew Tkachuk or Brayden Point, there’s no question asked whether you’re part of the group or the core. The question comes down to how much you want, how do you want it paid out, and for how long.

In this particular negotiation, there’s the perception of how the team perceives Labanc and how the player and his representatives perceive the player’s projected development. Sometimes, when the team’s projections and the player’s aren’t aligned, that’s when we see stalemates and misalignment around proposed vs. expected term and AAV.

There was certainly some financial motivation behind the one-year term where the Sharks front office saw an opportunity to save money. Or, the coaching and player development staff wanted to see more of what they had in hand. 

Or maybe it was the player’s decision? Sometimes, taking a step backward to take a huge leap forward is a great play. You take less money to pump up your value. We’ve also seen players strategically “slow play” their careers by “betting on themselves on a very short-term deal, hoping it increases his value and leverage ahead of the next round of negotiation. Patrik Laine’s two-year deal [last year] comes to mind as an example of a player who used this tactic as part of their career management. 

Other times, a team is not comfortable to invest long-term without access to more of a sample size.

That’s exactly what happened in San Jose. They didn’t “have to” offer him anything longer than a year because he didn’t have any arbitration rights.

If you’re a team, you could tell a fresh-out-of-his-ELC player: “I’m only offering you a one-year deal. All the other terms are not on the table.” Term options may be offered at what may be perceived to be grossly deflated AAV amounts, forcing the hand of the player to have to wait until he earns arbitration rights before returning to the table.

Labanc’s is eligible to arbitration rights this year, so really it’s a different hand altogether.

There’s probably a lot more to the story here than has been reported. There’s always more than meets the eye, and that’s why negotiations are complex and dynamic in nature. 

SP: Labanc didn’t have the best year this season though.

IB: It was a show-me-what-you-can-do deal. Today’s NHL is fast-paced, the ability to play consistent two-way hockey and showcase defensive responsibility is valued by teams and coaching staffs across the league.

It’s not all on Labanc, but he ended up with a -33 which alludes to areas of improvements to his game. The reality is that the whole team performance was under expectations.

Still, this gives ammunition to the club ahead of arbitration to say, yeah, you can put up points, but you’re inconsistent defensively.

I can see from a team’s perspective, how they’d be risk-averse when the player is not offering consistent performances.

SP: So what kind of contract do you think Labanc and the San Jose Sharks will end up with?

IB: That -33 is going to hurt him. Plus-minus isn’t a defensive catch-all stat, but it’s going to be hard to refute that number in arbitration.

That said, it’s hard to score 40, 56, then 33 points in the league. Secondary scoring is important, and Managers will tell you that having access to affordable depth is a luxury.

I’ve prepared NHL contract projections with Sam Forstner for the 2020 class of free agents at The Hockey Code. We can see Labanc getting a one-year or two-year, with an AAV range $3.1 to $3.4 million each year. A good comparable to me is Conor Sheary who signed a three-year, $9 million dollar deal as an RFA [in July 2017].

Keep in mind that teams will typically prioritize their own historical signings, while agents will aim to expand the scope of comparables to the entire league. 

SP: Doesn’t Kevin have more leverage though, considering the San Jose Sharks have just a handful of top-nine caliber forwards? 

IB: The way I look at leverage, you have to look at opportunity cost. If you have somebody in house already, you know their history and weaknesses. Knowledge is power. 

Can your coaching staff live with his strengths and weaknesses? Do you have the right players that can complement his skill set and shortcomings? Is he fitting well in the culture of the organization? Is the player investing in his success and making the sacrifices necessary to grow as a person and leader?

Labanc is not a top two-line player that you can use in any situation, but he has shown at times in his career that he can be a third piece to a good line.

Back to opportunity cost, you have to look at the free agency market. Who else can I buy for that money, and do they even want to come here? You have to look at all that to see if the team has alternatives for a serviceable top-nine player. Buyer beware, as the open market is ripe for bidding wars, and overpaying can quickly cripple a club’s carefully structured cap table.

SP: What other factors do you think might affect Kevin’s contracts and other contracts this off-season?

IB: I want to look at analytics from a business intelligence lens. How are decisions being made and why? Are there ways to increase the decision-making confidence, reduce the risk or maximize long-term flexibility? There is a reason I include advanced stats analysis, CBA leverage and comparables in my process to generate a contract negotiation analysis. 

Since the new CBA extension has been ratified, I wouldn’t be surprised if there’s a squeeze on the middle-class player. With the overall economic uncertainty, we may see Managers across the league adopt a cautious fiscal strategy.

On the other hand, maybe some front office will take advantage of everyone else’s caution? This is a league where winning counts above all else!

As Warren Buffet once said “Be fearful when others are greedy and greedy when others are fearful.” 

Follow Idriss Bouhmouch on Twitter and check out his complete 2020 UFA and RFA contract projections at The Hockey Code.

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