FanPost

Roman Cervenka's Contract Structure and Why He's Worth Every Penny

(ed. note: this was originally posted at SBN's Winnipeg Jets site, Arctic Ice Hockey.)

On Wednesday, the Calgary Flames announced that they signed Roman Cervenka, formerly of the KHL's Omsk Avangard, to a one year, $3.775M contract. Cervenka led his team in scoring in both 2010-2011 and 2011-2012 and led the KHL in goals in 2010-2011, but this deal has been met with a fair amount of skepticism. The biggest (and only major) reason, as far as I can tell, is the cap hit.

Critics of the deal are quick to point out that $3.775M is a lot of money for a guy who has a grand total of 0 NHL games under his belt. I think we all need to take a step back and settle down though. The contract is well worth it and after the jump I'll explain why.

First things first, I want to make it abundantly clear that the $3.775M figure being quoted (and criticized) is the cap hit and maximum value of the contract. It is the combination of Cervenka's salary and bonuses; it is not Cervenka's 2011-2012 salary. With that in mind, let's delve into how much Cervenka can actually expect to make. We don't know the exact bonuses of his deal, but the CBA gives us a pretty good idea. The $3.775M figure will break down more or less like this:

1. (Almost) Guaranteed Money

  • $925,000 base salary
  • 10% signing bonus - $92,500 (included in the amount above)

Basically, Cervenka will make $925,000 just for staying in the NHL all season. The rest of the $3.775M figure being quoted comes in the form of performance bonuses. These bonuses are separated into two categories, "A" bonuses and "B" bonuses.

2. "A" Bonuses

As per Exhibit 5 in the CBA, on performance bonuses:

"Individual "A" Bonuses Paid By Clubs

The maximum amount payable for any single category of Individual "A" Bonuses identified below is $212,500 per season. (For example, an Entry Level SPC may not contain bonuses of $212,500 for 20 goals and an additional $212,500 for 30 goals, provided, however, it may contain a bonus of $100,000 for 20 goals and $112,500 or 30 goals). An Entry Level SPC may contain any number of Individual "A" Bonuses; however, a Player may not receive more than $850,000 in total aggregate Individual "A" Bonuses per season. Individual "A" Bonuses are payable by the Clubs (as opposed to the League)."

The following are the minimum thresholds to reach Individual "A" Bonuses. It's possible that Cervenka and the Flames negotiated higher ones, but I consider it unlikely.

  • Ice time (aggregate and/or per game): must be among top 6 forwards on the Club (minimum 42 GP)
  • Goals: 20 goal minimum
  • Assists: 35 assist minimum
  • Points: 60 point minimum
  • Points per game: .73 minimum (note: minimum 42 GP)
  • Plus/Minus rating: Among top 3 forwards on the Club (minimum 42 GP)
  • End-of-Season NHL All-Rookie Team
  • NHL All-Star Game
  • NHL All-Star Game MVP

Translating CBA-speak into layman's terms, Cervenka can earn up to $850,000 for reaching bonuses in the above areas and he cannot earn more than $212,500 in any one area. It usually takes 45-55 points to make the All-Rookie team as a forward and the lowest scoring forward on the All-Rookie team has averaged 48 points over the last five seasons. He'd probably do best to have the maximum in bonuses tied to as many of these as possible: making the All-Rookie team, goals, ice time, points per game/points, assists and plus/minus. The All-Star Game is a crapshoot, but might as well throw it in too.

3. "B" Bonuses.

"B" bonuses are further separated into two types of bonuses, league-wide awards/trophies and league performance bonuses. Combined, the maximum Cervenka can make in "B" bonuses is $2 million.

a. "League-wide Awards/Trophies"

The following are the relevant "League-wide Awards/Trophies" that Cervenka can receive a bonus for. The Calder is only eligible for a league bonus and can't be tied to his "B" bonuses (as an interesting side note, the Art Ross trophy is also not bonus-eligible and this makes no sense to me). In addition, I've listed the corresponding bonuses that the NHL pays. The bonus amounts are open to negotiation between the individual players and teams, and Cervenka has likely negotiated the full $2 million (or close to it) into any one of these bonuses, but I have included the amounts that the league pays just for reference.

Hart Trophy, Selke Trophy, Richard Trophy:

  • Winner = $250,000
  • 2nd = $200,000
  • 3rd = $150,000
  • 4th - $100,000
  • 5th - $50,000

Lady Byng Trophy:

  • Winner = $150,000
  • 2nd = $100,000
  • 3rd - $50,000

Calder Trophy:

  • Winner = $212,500
  • 2nd = $150,000
  • 3rd = $100,000

Conn Smythe Winner = $250,000

Year-end NHL All-Star Teams:

  • 1st Team All-Star = $100,000
  • 2nd Team All-Star = $50,000

Realistically, Cervenka has very little shot at most of the league-wide awards and trophies. He's an okay enough two-way forward, but hardly a shutdown guy. A Selke nomination seems unlikely, particularly with that award being largely based on reputation, so for the purposes of this article, let's assume that he's not a defensive liability but the Selke is out of reach. Judging by his PIM totals in the KHL, the Lady Byng also seems almost out of the question. Conn Smythe? Not unless the Flames win the Stanley Cup. The Hart and/or Richard? This year's top five goal scorers were Steven Stamkos, Evgeni Malkin, Marian Gaborik, James Neal, and Alex Ovechkin. Guys like Ilya Kovalchuk, Corey Perry and Phil Kessel were just one goal outside the top five. Good luck beating that crowd. It's possible, but it's one hell of a tall order. As for making the year-end NHL All-Star teams, the lowest totals from the last few years are Marian Hossa's 71 points (in 74 games) in 2008-2009, Patrick Kane's 73 points (in 73 games) in 2009-2010 and Alexander Ovechkin's 85 points in 2010-2011. Again, Cervenka can do it, but it'll be tough.

The only award Cervenka seems to have a realistic chance at is the Calder trophy, but unfortunately, the Calder is not eligible to be tied to Cervenka's "B" bonuses. In order to get nominated for the Calder and earn any bonus whatsoever, Cervenka needs to top 50 points at minimum (but should be closer to 60 to ensure a nomination). Why? Because every forward nominated for the Calder trophy over the past 5 seasons topped 50 points. Note that winners are in bold:

Player

GP

Goals

Assists

Points

Points/Game

Year

Nugent-Hopkins

62

18

34

52

.84

11-12

Landeskog

82

22

30

52

.63

11-12

Henrique

74

16

35

51

.69

11-12

Skinner

82

31

32

63

.77

10-11

Couture

72

32

24

56

.78

10-11

Grabner

76

34

18

52

.68

10-11

Duchene

81

24

31

55

.68

09-10

Ryan

64

31

26

57

.89

08-09

Versteeg

78

22

31

53

.68

08-09

P. Kane

82

21

51

72

.88

07-08

Backstrom

82

14

55

69

.84

07-08

Toews

64

24

30

54

.84

07-08

Average

76

24.6

33

57.6

.76

Keeping in mind that the Calder is Cervenka's only real shot at season-ending hardware, his "B" bonuses seem unlikely. He'll need at least 50 points to get nominated for the Calder, but to win it, he'll likely need to score 60+ points. Just for reference, the last time a forward won the Calder with fewer than 60 points (before this season, since this year's winner won't have 60) was Chris Drury in 1998-1999. And if he gets the Calder, the Flames won't even be the ones paying him. If Cervenka and his agent negotiated well, all or most of the $2 million in bonus money will probably come just for being nominated for any of these awards. The year-end All-Star team will be his best bet, but that'll still take 70 points or more.

b. "League Performance Bonuses"

Borrowing from Exhibit 5 of the CBA again, these are performance bonuses given to:

"A forward who finishes among the top ten (10) forwards in the League in goals, assists, points or points per Game (Minimum 42 Regular Season Games played by Player and comparison group)."

The amounts for "League Performance Bonuses" are free to be negotiated between individual players and teams, and again I'd expect Cervenka to reach the full $2 million or close to it for hitting any of these thresholds. However, he still needs to finish in the top 10 in the league in one or more of these statistical categories to receive his bonuses. The average of the 10th highest total for each category over the past three seasons was:

Goals: 35 goals

Assists: 52.0 assists

Points: 80.3 points

Points/game: 1.06 points per game

Summarizing, the Calder is by far Cervenka's best shot to make bonus money, but the most he can make is $212,500 and that gets paid by the league. For "B" bonuses, his best bet is probably finishing in the top 10 forwards in a statistical category. If he can do that, or if he gets nominated and/or wins any other awards, he'll probably get the full $2 million or close to it. Hypothetically, let's be generous to Cervenka and err on the side of caution. Let's say he did pretty damn well for himself in the negotiations and got $2 million tied to any and all "B" bonuses, and let's say he doesn't even have to win any awards, just get nominated. I figure that's pretty cautious since the Flames couldn't have been that much more generous, could they? I will use these assumptions going forward.

So what does all this mean in the end? Well, let's break it down by production level.

If Cervenka scores fewer than 20 goals or fewer than 40-ish points, there is very little chance that he'll make any of his bonuses and he will earn his $925,000 base salary and signing bonus. For anything over 20-25 points (i.e. Cervenka is not a total dud) that's decent value or potentially great value if he ends up in the high 30s/low 40s.

Moving up a rank in production, let's say Cervenka scores 50 points. This is where some bonuses will kick in. Cervenka will probably make an additional $212,500 for making the All-Rookie team and a Calder nomination seems like a decent bet but that'll get paid by the league. He might have hit his 20+ goal bonus too for up to $212,500 more. 50 points means the Flames are now on the hook for something in the 1,137,500 - $1,350,000 range, give or take a bit depending on how much money he managed to negotiate for. Still, that's great value for a guy that topped 50 points.

How about 60 points? Cervenka will almost certainly make the All-Rookie team, score 20+ goals, play top 6 minutes, and we know he'll hit the 60 point mark and .73ppg pace. 60 points means he's probably maxing out his "A" bonuses or close to it so let's assume he'll earn $750,000 - $850,000 in "A" bonuses. Moving on to other bonuses, "B" bonuses seem unlikely and the Calder is once again the only bonus he has a real shot at. 60 points all but guarantees a nomination and at least a runner-up spot, but could be enough to win it. Again though, that one is capped at $212,500 and the Flames won't be paying it. The Flames are now on the hook to pay Cervenka, at most, $1,775,000. Still great value for a guy that scored 60 points.

70 points? Now he's definitely maxed out his "A" bonuses for the full $850,000 and is all but guaranteed the Calder money from the league.. Still though, 70 points isn't enough to finish top 10 in any statistical category or win any trophies, so he won't earn any of the other bonuses. The Flames still pay $1,775,000 at most, although the actual amount will again depend on how well he actually did at negotiating. Once again, great value for the Flames.

As demonstrated above, Cervenka's best best for "B" bonus money is tied to "League Performance Bonuses" and Cervenka needs to finish in the top 10 to earn them. It'll probably take an 80 point season to reach these bonuses. At 80 points Cervenka would be a steal for anything south of $6 million, but instead he'll make $3.775 million at most.

In the end, depending on exactly how much Cervenka scores next season, his contract will either be pretty good value or potentially great value. And that's with what I'd consider a pretty generous bonus structure, putting all of the "A" bonuses at the minimum thresholds and tying $2 million to a ton of the "B" bonuses. If Feaster was even remotely stingy then Cervenka will be even better value. Hell, I gave him $2 million just for getting nominated for...anything, really. Despite that, as you can see, Cervenka's contract is good value at every single level of offensive production.

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