Three key contracts helped kill the CBA

Canadian Press

9/20/2004 4:00:58 PM

On paper, the recently expired collective bargaining agreement should have done a better job keeping NHL salaries under control for players in their 20s, but three contracts signed in 1997-98 blew that out the window.

Joe Sakic, Paul Kariya and Eric Lindros signed deals that season that sent salaries into a spiral that in no small part led to the current NHL lockout.

All three deals did irreparable damage to a CBA that should have worked better. And don't blame the players, it's not their fault.

The hope 10 years ago, from the owners' side, was that the CBA would effectively control the rise of salaries because teams controlled players until they were 31, when unrestricted free agency finally kicked in.

The owners hoped to limit some, if not most, Group 2 restricted free agents to no more than a 10 per cent raise on their salary from the season before - as written out in the CBA - especially those without salary arbitration rights.

Yeah right.

Sakic, 28 at the time, was the first shocker. The Colorado Avalanche felt obliged to match a three-year, $21-million US offer sheet made by the New York Rangers in August '97. It was one of the rare times during the CBA's 10-year run from January 1995 to September 2004 where a restricted free agent received an offer sheet.

The Avs preferred to match the offer rather than receive draft picks as compensation.

"The Group 2 system, with the team having the right to match, works extremely effectively," says Sakic's agent Don Baizley. "That right to match just chills the market place, as it does in most business settings. But Joe's situation was exceptional, the Rangers were looking for someone to replace Mark Messier (who went to Vancouver).

"So they came along and made an offer sheet to him, which rarely happened. And Colorado went ahead and matched it."

It more than doubled his salary from the $3.1 million he earned in 1996-97 (the deal was actually broken down as a $15-million signing bonus and $2 million a season in base salary -  giving him an average of $7 million a year).

Suddenly, the benchmark for a top player under the age of 31 went from $3 million to $7 million.

And then there was Kariya, 23 at the time. He was coming off his third NHL season, a 99-point campaign when he earned $2.075 million. He was looking for a big raise, but as a Group 2 restricted free agent with not enough NHL experience to qualify for salary arbitration, he had very little recourse.

Under the terms of the collective bargaining agreement, all the Ducks had to do is offer him no more than a 10 per cent raise.

Kariya rejected his qualifying offer and did the only thing he could do: he skipped training camp and missed Anaheim's first 32 games. He wanted Sakic money.

Disney, its Ducks team struggling without its top star, caved in and gave Kariya a two-year, $14-million deal in December 1997, a monstrous raise which changed the Group 2 market forever. What made it worse is that the two-year deal was broken down as $5.5 million the first year and $8.5 million the second season, meaning the Ducks could never qualify him for less than $8.5 million.

In April '98, Ducks teammate and linemate Teemu Selanne received a two-year extension for 2000-01 and 2001-02 which also hit the jackpot. After earning $3.4 million in 1997-98, $4.75 million in 1998-99 and $5.45 million in 1999-2000, the new extension raised him to $8 million for 2000-01 and $9.5 million for 2001-02.

Those deals would not have happened without the Sakic signing in '97.

"The Sakic offer from the Rangers, which Colorado matched, was the first one that saw salaries go up (for Groups 2s)," said one NHL general manager who requested anonymity. "And then shortly after that, Kariya and Selanne, as Group 2s, with no other rights, not even arbitration rights (in Kariya's case), they signed enormous contracts.

"They were good players, but they hadn't won anything and their new deals took them right up to where Sakic was. So those signings affected the entire Group 2 market and became comparable in salary arbitration. And they really hurt, because Kariya was making $7 million and a guy with numbers almost as good is only making $2 million but he now thinks he's worth $5 million."

And then there was Lindros, 24 at the time, who signed a two-year contract extension with the Philadelphia Flyers in January 1998 worth $16 million. The agreement raised his 1997-98 salary of $3.74 million to $7.5 million for that season, and gave Lindros $8.5 million for 1998-99.

And it went on and on for the game's biggest Group 2 stars, Jaromir Jagr and Peter Forsberg later eclipsing the $10-million barrier.

Baizley, based in Winnipeg, represents Sakic, Kariya, Selanne and Forsberg among others. One of the game's top agents who tries to keep a low profile, he admits Kariya's deal had a huge impact on the market for Group 2 players.

"I don't think we can deny it was a pivotal signing," he said. "But it was a signing that took place in a market-place where revenues for all teams were going up. There was a very optimistic view in terms of economic outlook. So this was paid by a company, Disney, that obviously had some projections that they were satisfied they could handle with this salary."

What made the Sakic, Lindros and Kariya deals even more difficult to swallow for the NHL in retrospect is that all three deals came about only after the league agreed with the NHLPA in June 1997 to the four-year extension of the CBA for 2000-2004.

The damage had already been done. And now the NHL wants a salary cap to fix it.