Stop the Panic! Ovechkin Isn't Going Anywhere

As many Capitals fans know, Alexander Ovechkin's contract expires after this season, at which point he will become a restricted free agent. Hearing phrases like "contract expires" and "free agent" has created a tizzy amongst both Capitals fans and at least a couple members of the press too stupid to do any research (here and here) who are either fearful (Caps fans) or hopeful (fans of any rich team in the NHL) that Ovechkin will leave Washington. The reality of the situation is this: Ovechkin is not going anywhere this offseason.

Here's why: After the first three years a player who signed a contract between the ages of 18 and 21 will see their entry-level contract expire. At this point, if he has not signed an extension, he will become a restricted free agent provided his team has offered him a pay raise of at least ten percent if he makes less than $660,000, a five percent raise if he makes $660,001-$1,000,000 and no raise (at least the same amount as the previous season) if he makes more than $1,000,000. If the team does not offer a high enough contract, the player becomes an unrestricted free agent.

The differences between restricted free agents and unrestricted free agents is twofold. Unrestricted free agents can sign potential contracts (referred to as "offer sheets") from other teams. Once they sign an offer sheet one of two things will happen - either the team the player was originally contracted to will match the offer sheet and the player will remain under contract to his original team or the original team will let him walk and received compensation in the form of draft picks from the team that has signed the player in question away. How many picks, and what rounds they are, depends on the value of the contract. The maximum compensation is four first round draft picks. How much of this information comes form reading articles about the C.B.A. and the C.B.A. itself and how much comes from too much time spent playing Eastside Hockey Manager, I'll decline to say.

COMPENSATION CHART

$660,000 or below = No compensation due.
$660,001 to $1 million = One 3rd Round draft pick.
$1 million to $2.0 million = One 2nd Round draft pick.
$2.0 million to $3.0 million = One 1st Round and One 3rd Round draft pick.
$3.0 million to $4.0 million = One 1st Round, One 2nd Round, and One 3rd Round pick.
$4.0 million to $5.0 million = Two 1st Round, One 2nd Round, and One 3rd Round draft pick.
$5 million = Four 1st Round draft picks are.

By contrast unrestricted free agents can sign any contract they want to (their original team does not have the option to match) and the team they are being signed away from is not due any compensation.

Now, as for Ovechkin. If he makes it to the summer (still seven months away, by the way) without a new contract from the Capitals he will probably get offer sheets from other teams. But Ted Leonsis isn't stupid. He knows what it would mean for the on-ice product and what a massive P.R. blow it would be to the team to let Ovechkin walk and he isn't going to allow it to happen. The fact that the Capitals are allowed to keep Ovechkin just by matching whatever other contract offers he may receive means that he's not going to be simply signed away.

There is one scenario in which Ovechkin could leave Washington this summer, and that's if he refuses to resign with the Capitals and demands his rights be traded to another team (similar to what happened with Mike Comrie and Alexi Yashin). While such a situation is possible, I think it's unlikely. Ovechkin just doesn't seem like that kind of player and while he's frustrated by the losing there's nothing to indicate that he wants out at this point.

So what kind of contract does Ovechkin deserve? It makes sense for discussions to start with Sidney Crosby's five year, $43.5 million contract (8.7 million per year - the same as Crosby's number 87 jersey). It would also make sense for the Capitals to offer Ovechkin the same deal as Crosby, were it not for the uniqueness of the per-year dollar amount. Given this, and the fact that it would be an unwise move to offer anything Ovechkin could perceive as an insult, it would make sense tho offer Ovechkin a contract in the $8.8-9 million per year range. Reports are that Ovechkin wants more money than that though, and is looking for a contract in the $9-10 million dollar range. If Ovechkin think he's worth more per year that Crosby, he's wrong.

You can certainly make the case that the two players are of equal value on the ice: Crosby has better playmaking skills and plays a more difficult position; Ovechkin is a better pure goal scorer and athlete, and does very well in the physical game. But Ovechkin hasn't been as marketable as Crosby so far in his NHL career and thus probably does not make as much money for his franchise. The result is that, even if each player were making the same salary, Crosby's team is going to be out less money at the end of the season for having him on their roster since his immense marketability helps to defray the cost of his salary.

But that's really incidental. The important thing is that Alexander Ovechkin will indeed be wearing a Capitals uniform next season.