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Up-to-the minute updates and insights from the Red Wings locker room at home and on the road. By Chuck Pleiness of The Macomb Daily.

Wednesday, July 1, 2009

Hossa's pricetag

The one-year deal between the Red Wings and Marian Hossa cost the player much more than it did the franchise.

I thought Hossa did a great job in his one season -- regular season and playoffs -- in Detroit and well worth his $7.45 million salary. I really wish there was a way to fit him into the Red Wings' lineup in the years to come, but with the salary cap coming in just $100,000 more than last season and the salaries of Zetterberg and Franzen ballooning, there was no possible way.

But what about Hossa's perspective? He didn't get the Stanley Cup, but that's a tough thing to accomplish for even the best of franchises. Hossa's salary of $7.45 million seems to be good compensation for a year's work ... but it turned out to be a big financial loss for the Slovak.

Hossa signed with Chicago today ... 12 years at $5.23 million per for a cap hit. If there is no buyout or change in Hossa's salary during this contract, we can put a number on how much money it cost Hossa to come to Detroit last season.

There was one report, which I believe, that a team like Edmonton had offered Hossa $9 million per season for 9 seasons. Hossa's agent, Ritch Winter, said that he left $85 million on the table in taking Detroit's one-year contract. I'm not sure who had offered $85 million or if it's true, but it's in line with the $81 million Edmonton deal.

So, let's use the $81 million over 9 years as what Hossa could have had instead of the $85 million.

Hossa got $7.45 million from the Red Wings last season. Using his cap hit of $5.23 million (I'm using the cap hit because we don't know how the $81 million deal was structured for per season income nor how the Chicago deal is structured), Hossa will get $42.04 over the next 8 seasons.

That gives Hossa a total of $49.49 million over the 9 seasons after signing with Detroit. Passing up $81 million over those 9 seasons means that it cost Hossa about $31.51 million because he signed that one-year deal with the Red Wings.

Now if Hossa's contract is structured so that he earns $40 million this season and is bought out and then earns $9 million per season after going to another team ... then scratch this math. But if Hossa finishes as a Blackhawk, then we know he cost himself a little more than $30 million to play in Detroit.

I'd say the Red Wings made out much better than Hossa in their one-year deal.

11 Comments:

Anonymous Anonymous said...

You can't use the cap hit to see how much he'd have gotten over the 9 years. His first 8 years with Chicago he will be making 59.3, plus the 7.5 last season leaves you with 66.8... The cap hit is how much it counts against the team... not how much he gets paid out.

July 1, 2009 at 6:50 PM 
Anonymous perfection said...

while i know what you're getting at... these numbers are just simply insulting to 99% of the worlds population.

oh no!!! he only gets $50MILLION DOLLARS!!!! wow... he really lost out.

again, i get it, it's sports, but to act like Hossa has made this HUGE sacrifice... it's sure not a sacrifice that will effect his lifestyle for the rest of his life.

July 1, 2009 at 6:59 PM 
Blogger Bruce MacLeod said...

Perfection, I hear you, but I disagree. That's the same old line of bull that's been used to discount athletes' salaries for decades.

If you think that he's a rich man with $50 million, then why act as though $30 million is easy to walk away from. If $50 is a king's ransom, what's $30 million.

The limit of tolerance can always be moved. In other words, many, many people could say to you, "You're upset because your salary was cut from $60,000 to $40,000 ... stop whining. I only make $25,000."

It is a sacrifice and at the same time, Hossa is a rich man. You can have both at the same time.

July 1, 2009 at 9:39 PM 
Blogger Bruce MacLeod said...

Anonymous, even using the actual totals, Hossa has missed out on more than $16 million. My point still stands.

But Hossa's deal is one 12-year contract. I know that it's front-loaded, but if you say he's going to make a lot up front, then he's tied in to a few $1 million salaries after his first seven seasons in Chicago. He'd make more than that (likely) on the open market.

The cap hit is a fair way of distributing the money over the life of a 12-year deal, so that if you just focus on 7 years, you don't ignore the lower salaries on the back end.

July 1, 2009 at 9:42 PM 
Anonymous perfection said...

yeah, but Bruce... if my lifestyle and that of my loved ones were 100% comfortably supported by $25k and my salary got cut from $50k to $25k, but other than that nothing else changed... it wouldn't be a "sacrifice". while that's somewhat unrealistic, it is an actual analogy to Hossa's situation. I realize you can be rich and sacrifice. If you are making a couple of million dollars a year and living a certain way and you suddenly start making $100,000, it may effect your lifestyle. Hossa is filthy rich. He could flush a million dollars down the toilet and hardly notice.

and you say it's the "same old line of bull"... well, it should be. I LOVE Wings hockey more than anything, but the salary standards are absurdly inflated in professional sports (and acting and singing). you call it "bull", i call it insulting. yes, i realize they put their bodies on the line (to play a game) and they should be rewarded. I don't even mind the opportunity for them to get rich. i'm not a communist or anything, i just thing the gap between the starving in the world and the richest of the rich is far too big. in my opinion, and i'm sure many disagree - but i feel that the VERY BEST athletes in all leagues should be making no more than a million dollars or two per year TOPS. That IS rich. The rookies make $80-100k to start just like a hotshot lawyer or businessman right out of school. professional athletes would still be upper class, but not to the absurdity that people end up talking about the financial sacrifice of someone who just signed a contract for $62 million dollars.

July 1, 2009 at 10:05 PM 
Blogger Bruce MacLeod said...

Perfection, I get what you're saying. Please re-read what I wrote. I didn't not say that Hossa is in bad financial shape or that he is going without necessities.

Sacrifice is used simply to mean a financial sacrifice to select which team he played for. Don't screw that to mean that he's sacrificing food on his table. My meaning was quite clear ... a mathematical look on the difference between what Hossa earned and what he could have earned. No where do I say that he's in the poor house.

So please don't get all upset and read things into this that I did not write. I know that Hossa is rich and I don't cry for him. But I also know that he could have been a lot richer. That's all I'm saying.

Perfection, here's the problem that I have with your anger towards major-league athletes ... you go off about their salaries being "absurdly inflated". But why don't you go off about the owners' money?

Hey, I'd be the first to sign if capping athletes' salaries to $1 million would lower ticket prices. But it won't lower the prices one cent. Supply and demand.

So if you're offended by athletes' salaries, guess what happens if your $1 million cap goes into effect ... the owners keep the money.

Will you go off then on owners being absurdly rich? Better yet, why aren't you going off right now on owners being absurdly rich and the great divide between the rich (owners) and the poor?

You are selective in your anger.

And incidentally, NHL players' salaries are capped. You just don't like the upper limit. Your salary and my salary are not capped.

And NHL players earn millions not because they put their bodies on the line, but because they has a skill that only a handful of people in the world possess.

I covered the minors for years and they put their bodies on the line for $500 per week.

Their salaries are not out of line with the rest of society. Show me a professional who is one of three dozen people who can do what he/she does and that skill brings in multi-millions in revenues per year and I'll show you someone making what Marian Hossa makes.

There are hundreds of hockey players in the minors and many more in the NHL who don't make nearly what Hossa do.

July 1, 2009 at 11:37 PM 
Anonymous Hannibal said...

The salary cap appears to be hitting free agents really hard this year. 2009 is a bad year for free agents. For the first time in a long time, it's a buyer's market.

IIRC Pittsburgh offered Hossa a long-term deal also for more than $7 Million per year. Even if you take the Edmonton offer off the table, Hossa lost a lot of money by signing with Detroit.

July 2, 2009 at 8:54 AM 
Anonymous Anonymous said...

Athlete's salaries are not "inflated." If the semi-free market (hamstrung by the salary cap) is willing to pay big money for athletes' highly specialized and extremely rare services than they are worth exactly what they get. It's simple economics (you know, supply and demand and all that) and it's the same for any profession. Notice that burger flippers don't make millions. Why? Because it takes very little skill and there are millions of people who could do it. Why do lawyers make so much? Because it takes brains and many years of school to become one. Not everyone has the abilities or desire to do so. Why do rock stars, actors, and athletes make the kind of money they do? Because there are few people on the planet who have the special skills to do what they do and other people are willing to buy what they're selling. It has nothing to do with fairness. If you don't like the athletes' wages, stop supporting the games and the players. Vote with your wallet and give your money to the starving instead. If no one went to games or bought gear, the athletes would not get millions of dollars. I, for one, enjoy hockey and appreciate the product. And I am willing to pay for it. Personally, I don't care if Marian Hossa makes $8 million or $8 billion per year (as long as he doesn't beat the Wings). It's not the athletes' faults they make big money, it's our fault because we help pay their salaries and determine their worth to their respective clubs and leagues.

July 2, 2009 at 9:27 PM 
Anonymous Anonymous said...

Hossa missed out on about $15M by signing with Detroit. He's getting roughly $66M over the 9 years that he would have got $81M from the Oilers.

At the end of the 9 years, he'll be 38 years old (39 at the end of the season). We'll have to wait and see, but players like Hossa don't usually produce much at that age and beyond. I don't believe he'd play more than 2 more seasons at that point, and probably no more than 1. He's slated to make $1M in each of those two potential years. Had he been a free agent at that point (after the Oilers contract), he wouldn't have gotten much more. Maybe 2 or 2.5 in each year. So, imo, the most he'd lose in those two years is 2 or 3 million, TOPS. So, add that to the 15 and you get 17 or 18 that he forfeited, at most. That's a lot of dough, but if he's smart with the $100M he makes over his career, the sacrifice should really have no impact on his or his family's lives.

July 4, 2009 at 4:35 PM 
Blogger Bruce MacLeod said...

Well put. He missed out on millions, but we're talking about investment money, not money for clothes or food.

July 4, 2009 at 6:53 PM 
OpenID kaesocorvinus said...

Guys, come down, lol. It's just analysis, not like Martin LaPointe saying the reason he took 5.5 million instead of 3 was because he has kids to look out for. =D

July 6, 2009 at 8:50 PM 

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