Establishing Evander Kane’s market value Part 2

Posted by Richard Pollock in Columns,Jets Columns,Roster Analysis,Winnipeg Jets on January 26, 2012 — 11 Comments

We take a look at the remaining factors for analyzing Kane’s worth to this team.

(b)        Leverage

Before delving deeper into the contracts of the aforementioned players, it is important to note that Kane is limited in his leverage.  Over the next four seasons, notwithstanding a possible long-term extension, Kane’s contract status will be the following:

You will notice that Kane is not eligible for salary arbitration this summer.  That is because he has not yet accrued four NHL seasons; as a result, he will be eligible for arbitration after next season.

With salary arbitration not an option for Kane he has limited options in the summer of 2012:

  1. Sit out;
  2. Demand a trade; and
  3. Sign a contract.

This limited leverage does factor into his negotiating power and is one of the portions of the CBA intended to benefit the team over the player (something that many NHL GMs have not taken advantage of).

(c)        Contracts

We analyzed comparable players and their statistical output over the same period as Kane, so let’s now delve into their post-entry level contracts:

One point that has not yet been made is the fact that both Couture and Neal experienced one season in the AHL prior to playing full-time with the Sharks and Stars respectively.  This, of course, impacts their numbers (in a positive direction) and would play a factor in any negotiation.  Conversely, both Kessel and Tavares jumped right to the NHL from the NCAA and OHL respectively.

You will notice that Kessel’s contract does not rise significantly over the course of the deal (which is also the case with Tavares); with the final two years seeing his salary drop by just under one million dollars.  The reason for this is that Kessel’s contract extends into UFA status, meaning the numbers within the contract have no bearing on his arbitration case because Kessel will not have to head to arbitration (which requires a qualifying offer of at least 100% of the previous season’s contract) as a UFA.

It is interesting to note that Couture and Neal signed for the identical cap hit; however, Neal earns $500,000 more than Couture in the final year of his contract which will result in a higher qualifying offer.  We touched on the arbitration protocol in further length this past summer as it related to Anthony Stewart.  Click here and here for further clarification as to the process.

Now, of course, we must direct the analysis to Evander Kane.  As you can see above, the term Kane’s agent will be seeking will immediately allow both parties to narrow down their possible salary figures.

(d)        Available Contract Options

Let’s now examine Evander Kane’s approximate worth on one-year, two-year, three-year and four-year deals.  We will limit the evaluation to a four year maximum duration because Kane entered the NHL as an eighteen year-old, thus making him eligible for unrestricted free agency after seven NHL seasons, or four seasons after the 2011-12 season with Winnipeg.

Kane’s numbers are very similar to James Neal’s through their first three (or two and a half) NHL seasons.  Couture’s numbers compare more favourably to Kane’s than do Neal’s.  What is interesting about Couture is that he signed his two-year post entry-level extension prior to the expiration of his entry-level contract.  This contract was somewhat akin to the dealing of the Tampa Bay Rays in baseball.  The team signed a player prior to his contract expiring (albeit a short-term contract) providing him with the security of a second NHL contract and providing the team with possible value—which it appears will be quite significant.

Looking at how Neal and Couture compare to Kane, a contract offer of two-years, $5.75 million from the Jets seems entirely reasonable.  On one hand though, the average annual salary will likely increase (last season it was $2.3 million), something Evander Kane’s agent is surely aware of.  On the other hand, the argument can be made that Couture and Neal’s numbers have been better than Kane’s.  However, as noted above, both of those players entered the NHL after a year of seasoning in the AHL.

With the average annual salary rising and the fact Kane entered the NHL as an eighteen year old, Kane’s agent will likely seek a two-year, $5.75 million contract as a floor rather than a midway point, never mind a ceiling.

This is where Kessel and Tavares come into play—with both having entered the years at 18 years of age.  Tavares is a superior player to Kane; one could argue Kessel is as well, but Kessel is more comparable in terms of style (to a point) and production.

Here are their contracts:

(e)        Projected contract(s)

There are a variety of options for Kane’s contract, but as stated earlier, we are going to cap a projection at four years (when Kane reaches UFA status).

Overall, James Neal appears to be a very applicable comparison to Evander Kane.  As a base, we used Neal’s second NHL contract in shaping Kane’s projected deal over two years ($3.05 million).  Over the last two seasons, we calculated a figure slightly below the average cap hit of Tavares and Kessel ($5.1 million) over the final two years taking Kane into unrestricted free agency.

A total contract of four-years, $16.3 million deal seems like appropriate market value for the young and upcoming Kane.  The question now is, will Kane serve those years in a Jets jersey?

**Thank you to capgeek.com for the listed salary figures and behindthenet.ca for the listed advanced statistics.**

  • http://www.facebook.com/garret.wilkinson Garret Wilkinson

    Cant see him staying. His “too good to be here” attitude and constant complaining on the ice is getting bothersome to Winnipeg jets fans, plus it is CLEAR that Kane dislikes Winnipeg. I believe a player with similar skill but better attitude would be far more valuable. Kane is a selfish player, and lacks offensive creativity, which is why he is in a scoring slump. Defensemen know if you push him to the outside he is useless. Kane needs to get his attitude in check and work on his puck control and then he might be worth that 16 million dollar deal.

  • http://profile.yahoo.com/QF7MBPP5DHQRKIVG6JMIJONVMU james i

    tyret

  • ericklee

    What’s really becoming bothersome is the constant complaining about Kane’s supposed ‘bad attitude’.  All of this is presumptuous rumor-mongering.   Unless you have heard it coming directly from his mouth regarding how he feels about Winnipeg, you should not assume anything.  All of this ‘I heard from a friend, who heard from a friend of a friend’ nonsense is just…nonsense.   Ignorant and juvenile, akin to grade or high-school gossiping.

  • http://profile.yahoo.com/QF7MBPP5DHQRKIVG6JMIJONVMU james i

    I couldn’t agree more.

  • http://profile.yahoo.com/TDJQFJCMIFAQ7UNYMKHN6Q7FLU Falcon19

    I agree with not jumping to conclusions but the reality is “elite” thinking players can suffer from the big fish small pond mentality. I believe it’s immaturity that hurts him more than anything and he definitely would have benefitted from some guidance rather than being thrust into the show 2 years ago. That’s all in the past. True North has been handling him with care because they realize the potential and gifts that Kane has and his value going forward. Until they can clear up all the “rumours” and bad press surrounding him I’d find it tough to truly get what’s he’s worth in return if a trade situation is the final end game for him. I think they’ll take the wait and see approach with him, see if he turns a corner professionaly regarding attitude and try to extend him. If they find it hard to do so and he isistant that he wants out they’ll do the best thing possible for both parties the Jets and Kane. Just my two cents.

  • http://twitter.com/TBonnar Timothy Bonnar

    $4 and a bit mill is kinda what I figured. I got there a different way though.

    Comparables aside, his agent will say he is due for a raise. His current contract carries a cap hit of $3,100,000. That will likely be his agent’s starting point. Given his lack of leverage I think the deal will land around $4 year and I don’t think he will be making more than Ladd.

  • http://twitter.com/TBonnar Timothy Bonnar

    I 100% agree.

    Winnipeg wants to be known as a big league city, but this gossip stuff makes us look minor league and IMO it is flat out embarassing.

  • http://twitter.com/ICrichyp Richard Pollock

    Kane’s cap hit is $3.1 million this season but his base salary is $0.9 million.  A scan of the available bonuses (I am unsure which bonuses are within his contract) suggest Kane will not reach $3.1 million.  So, I think his first year contract would likely be lower.  However, as you know, that will depend on term.

  • Anonymous

    Great article. I appreciate all the work that went into this article; this is proof that the top hockey writers in Winnipeg are from the Illegal Curve.

    I thought the overall analysis was done extremely well. But what about the immeasurable factors like the recent rumour mill? If the vocal minority of Winnipeg fans aren’t careful they could potentially cause RFA and FA salaries to increase. If Kane is unhappy playing here, it may cost TNSE a few extra million to keep him here, IMO.

  • Anonymous

    Goal scorers need to be selfish. Kane needs to believe that every shot or rush can end up as a goal for the Jets. He has, generally, played like this. He is very young and his development is right on track (remembering how young he is), although there is significant room for improvement. He forechecks, backchecks, and plays the body and will drop the gloves to defend his teammates. He has little leverage in the next negotiation so look for him to sign a deal similar to what Ladd signed. I think Jets fans need to embrace what these guys ARE, as opposed to focusing on what they ARE NOT. If we don`t, we will continue to be disappointed for many years to come.

  • Anonymous

    Goal scorers need to be selfish. Kane needs to believe that every shot or rush can end up as a goal for the Jets. He has, generally, played like this. He is very young and his development is right on track (remembering how young he is), although there is significant room for improvement. He forechecks, backchecks, and plays the body and will drop the gloves to defend his teammates. He has little leverage in the next negotiation so look for him to sign a deal similar to what Ladd signed. I think Jets fans need to embrace what these guys ARE, as opposed to focusing on what they ARE NOT. If we don`t, we will continue to be disappointed for many years to come.