Wednesday, July 31, 2013

Brodie Signing is a Win-Win for Everyone

Wow, did the TJ Brodie discussion ever take off like wildfire Wednesday when it was announced late in the afternoon that the Flames and the 23-year-old restricted free agent had finally come to terms on a new 2-year, $4.25-million contract.

It took a while and there's been a lot of debate about how the Flames should approach the situation. Should they lock Brodie up long term in hopes of getting him at a discounted rate in the latter years of the contract? Or, do they do what they did and go with a bridge contract that gives Brodie a nice pay bump from his entry-level deal (a cap hit of just under $750,000) and gives him another couple years to establish or prove the calibre of NHL defenceman he truly is before signing that longer term contract that will take him through his prime.

Calgary fans witnessed a breakout season from Brodie in 2013, one that was topped off by a spectacular month of April in which he established himself as arguably the team's top defenceman, logging an average of more than 23 minutes of ice time every night. 

My guess is what we saw in April is an indication of the player he will continue to become but it came as no surprise that the Flames, given their history of being hamstrung by long-term, bad-value contracts, chose to take a more cautious approach, saying we think we know what you are and we'd love you to become that guy that will anchor our blue-line for years to come but before we pay you as that guy, we want you to prove it over a couple more full seasons.

I see this deal as a fair one for Brodie and an excellent one for Calgary General Manager Jay Feaster and the Flames and is one where it's highly unlikely that not locking up Brodie long term will turn out to be something the team regrets.

Here are the five factors I took into consideration in concluding that this is a smart contract that is a win-win for everyone involved:
  • Where Brodie will be in seven years
  • Where he is today
  • Where he was three months ago
  • Where he was six months ago
  • Where he was five years ago


1. Where TJ Brodie Will be in Seven Years

We'll likely never know what it would have taken to sign Brodie to a seven year contract today but for the sake of argument, let's say Brodie does view himself as being a comparable player to Roman Josi and asked for the same 7-year, $28-million deal the Nashville defenceman agreed to in June. We'll call that scenario No. 1.

Next, let's look at today's deal combined with what could happen next. Let's assume that the next two seasons he plays even better than he did last April and in two years time, he snubs his nose at Josi's thrifty $4-million/year pact and demands a contract in the vicinity of what similar-aged Zach Bogosian (7-year, $36-million), Oliver Ekman-Larsson (6-year, $33-million) and Tyler Myers (7-year, $38.5-million) have -- let's make it a 7-year, $37.25 million deal. We'll call this scenario No. 2. 

Scenario 1: Paid today like Roman Josi
  • Net Cost to the Flames: $28 million over 7 years
  • Brodie Becomes a UFA at: Age 30

Scenario 2: Two-year bridge deal, then $37.25-million over 7 years
  • Net Cost to the Flames: $41.5 million over 9 years
  • Brodie Becomes a UFA at: Age 32 

In this comparison, the Flames pay out an extra $13.5 million in scenario 2 but they're also getting Brodie for two additional seasons. In very simple math (excluding the money Calgary is saving up front with the relatively low salary hit the next two years and how the interest on those savings will compound), scenario 2 sees Brodie essentially being paid $6.5-million and $7-million respectively for those two additional years in a Flames uniform.

In scenario 1, if Calgary wanted to resign Brodie as a UFA for two additional seasons to take him to that same age of 32, you would expect the asking price to be in the $6-$7-million/year range considering that five years earlier we hypothesized that Brodie had commanded nearly $5.5-million/year. Add in inflation and even if he's slightly south of his prime now, there's little doubt that $12 or $13-million for two years would be the asking price to re-sign the 30-year-old unrestricted free agent.

If you'd call the end result of this case study a wash for the club and player, in order for this 'bridge followed by a long-term contract' approach to ultimately come back and "bite the Flames" as some say it might, it would require Brodie to elevate his value even more so in two years, he will command upwards of $6-million/year over a long term deal. I like Brodie a lot but the odds of him turning into Erik Karlsson in the next two seasons and warranting that type of money is extremely unlikely.

What if Brodie Asked for Same Term, but Less Dollars Than Josi?

Yes, it's possible that the Flames may have been able to get Brodie to agree today to seven years and closer to $24-million but I wouldn't just assume that would be an offer the Brodie camp would smile and happily accept. And he certainly wouldn't have been interested in going any cheaper than that over seven years given how much money, potentially, he could be leaving on the table.

What it comes down to if you're Brodie is this. If you're confident you're on your way to becoming one of the league's premier defencemen in 4, 5, 6, 7 years time, you're not going to accept a long-term deal right now unless it is close to or at Josi's in value.

Even if Brodie did accept a 7-year, $24-million pact, the net difference is still negligible. Even if it costs the organization an extra $6 or $8-million over that longer haul, there will be no regrets from the Flames looking back on this day. They would be at peace knowing that they made a smart business decision, one in which Brodie only gets paid if he proves his worth -- unlike so many other deals we've seen in recent years that have crippled teams financially and have often ended in expensive buyouts.
 
2. Where TJ Brodie is Today

If you look at the NHL's impressive class of 1990-born defencemen, the deal Brodie signed today is very fair and slots right into the appropriate rung on the salary ladder when you compare where his game is at today, what his responsibilities have been, and how his resume looks compared to others in that same age group, who are also on bridge deals:

TJ Brodie - 114th overall pick in 2008 has played 104 gm (4-24-28)

That slots him behind:
  • NYR Michael Del Zotto - 20th overall pick in 2008 has played 250 gm (24-86-110). He's entering second year of a 2-year, $5.1-million contract.
  • FLA Dmitry Kulikov - 14th overall pick in 2009 has played 232 gm (16-64-80). He's entering second year of a 2-year, $5-million contract.
That slots him ahead of:
  • OTT Patrick Wiercioch - 42nd overall pick in 2008 has played 50 gm (5-16-21). He just signed a 3-year, $6-million contract)
  • MIN Marco Scandella - 55th overall pick in 2008 has played 89 gm (4-11-15). He just signed a 2-year, $2.05-million contract)
  • PHX Michael Stone - 69th overall pick in 2008 has played 53 gm (6-6-12). He just signed a 3-year, $3.45-million contract) 

3. Where TJ Brodie was Three Months Ago

There's no question that we saw a different Brodie last April. A whole new confidence emerged as he noticeably elevated his game over that final month averaging 23-plus minutes of ice time and playing in all situations. Over the final 10 games he was tied for second on the team in scoring behind Sven Baertschi.

The caveat, however, is Brodie stood out on a team that was not very good overall. The Flames were merely playing out the string at that point and were often playing against teams that had also been eliminated from playoff contention. It's only prudent to asterisk what you saw over that final month -- which in terms of stage is the polar opposite to the level of intensity and competitiveness that followed when the NHL playoffs began, and want to see Brodie exhibit all those same strengths over an extended period this season when at least for the first few months, the games will once again be meaningful.

Think of the Bad News Bears. Until Tatum O'Neal came along to demonstrate what a good player really looked like, even Tanner Boyle, Timmy Lupus and Ogilvie looked pretty good within the context of a bad baseball team. Well... OK, maybe that's a bad example. But, you get my point.

The other relevant development that happened at the end of last season was Brodie went overseas to join Team Canada at the World Hockey Championships. Although a small sampling once again, that was a useful barometer in the sense that it removed Brodie from his Flames setting and introduced a neutral evaluator in Canadian head coach Lindy Ruff. If you recall, Brodie played a little, but not a lot as the 6th or 7th defenceman and was a scratch for Canada's final game when PK Subban arrived.

On that team, Brodie expectedly slotted behind veterans Dan Hamhuis, Stephane Robidas and Brian Campbell, yet he was also used far less than guys like 30-year-old journeyman Jay Harrison (just signed a 3-year, $4.5-million deal with Carolina) and undrafted Stars prospect Brenden Dillon (still on his entry level contract). Meanwhile, going back to the Josi comparable again, Josi was dominating the tournament and would eventually be named the MVP.

4. Where TJ Brodie was Six Months Ago

On Jan. 20, Calgary opened the 2013 season at the Saddledome versus the San Jose Sharks. Brodie -- seventh on the defencemen depth chart, wore a suit that night and not his jersey. As he was munching on press box popcorn, the Flames trotted out a defence comprised of Jay Bouwmeester, Mark Giordano, Dennis Wideman, Cory Sarich, Chris Butler and Derek Smith.

If you look at it in that context, signing a contract for $2.1-million/season just over a half-year after being deemed not good enough to play in Calgary's top six, is not a bad outcome for Brodie.

5. Where TJ Brodie was Five Years Ago

It's not necessarily fair but there seems to be a period of time -- and I can't tell you exactly how long that period is, where your draft slot travels with you and that can help prop you up if you're a first or second round guy or work against you if you were a fourth round guy like Brodie.

The 2008 NHL draft class was stacked. The quality of defencemen that came out of the first two rounds that year was ridiculous -- Drew Doughty, Zach Bogosian, Alex Pietrangelo, Tyler Myers, Erk Karlsson, Jake Gardiner, Luca Sbisa, Michael Del Zotto, John Carlson, Slava Voynov, Roman Josi, Travis Hamonic.

When you're a first or second rounder, that's a badge of honour that carries cachet for quite a while and often gets that player the benefit of the doubt over someone picked in the third or fourth round like Brodie was that year.

There is a statute of limitations for how long your draft position remains relevant before it no longer matters but I'm not convinced we're at that point yet so for Brodie, that's another perception thing that he's going to have to combat in terms of establishing himself as a top player in the league and more than anything, that will take time and a consistent high level of play over not just a lockout-shortened 48-game season but over a couple full-length 82-game grinds as well.

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