Overpaying for Smyth.
Given that this might all be moot in the next 24 hours, I may as well write something down now.
I think a differentiation has to be made between what Ryan Smyth is worth to the Edmonton Oilers Hockey Club and what he's worth to the Edmonton Investors Group.
Ryan Smyth and the Oilers have been negotiating a new contract for him for the last few months. Given Smyth's status as an Oiler (in fitting with the topic, use all the cliches you want, "heart 'n soul", "bleeds oil" "face of the franchise" etc) it's obviously a big deal in Oil Country (which I think is an attempt to ape the Red Sox Nation branding move). Apparently they're not far apart, Smyth is asking for somewhat over $25MM over 5 seasons and the Oilers offering $20MM over four. Roughly.
With the Oilers, salaries have to be balanced twice, both against the cap and against the pocketbook of the EIG. A look around the Oilogosphere will tell you that there's some suspicion over just how much the EIG has to spend on players salaries, that they cry poor while pocketing alot more than they let on. I'm no business student, so I don't really get into that myself. But from the basic looks of it, the critics are right, the oilers have a pretty high per-game gate revenue and just came off a huge moneymaker of a playoff run, all while aided by a large growth in the value of the CDN dollar over the last few years.
In any case, with the salary cap going up again next and the probability that the Oilers won't be spending that high no matter how much they're actually making, I'm not sure that an argument against overpaying Smyth because of salary cap concerns makes sense.
The argument for overpaying him (for an example, lets say paying him anywhere over 5.5 per) because of the restrictions on the EIG pocketbook is a little stronger. This is all assuming that the EIG does indeed make money, and will again this year.
It's safe to say that Smyth is indeed the face of the Oilers franchise. He's a (mostly) local boy, one of the few (or the only) draft picks from the 90's to actually make on the team and succeed. He's played his whole career in Edmonton, which is rare enough these days. What is that kind of story and myth worth to the EIG? What does he mean to the fans? I don't have any stats, but I'd be quite willing to bet that Smyth sweaters are the biggest sellers in Edmonton, by far.
The Oilers have been milking the glory years for a while now, what with the number retirements and banner replacements and whatnot, but eventually that'll run out. As an example, they're retiring Messier's number tomorrow night, and I'd bet they're gonna retire Lowe's number someday as well. And after that? From the last 17 years, who is there they could possibly retire? If they wanna follow the Flames lead (Vernon?) and do some reaching, they could do Bill Ranford's number 30 maybe...
But if Smyth plays his entire career in Edmonton, regardless of whether he wins a Cup or not, I don't see why he wouldn't get his 94 retired somewhere down the line.
Being able to give your franchise a face must be worth something in the long haul, even if it's not quantifiable. Being able to say "look, our players are loyal to you, so you can be loyal to them" to the fans must count for something, no? If some fans long for the days when a player spent his entire career with one team and was identified as such (Yzerman in Detroit, Beliveau in MTL, Bossy on the Island, Neely in Boston) what does it mean to them to have a player on their team do that?
So if Ryan Smyth the hockey player is worth say $4.5 - 5.0MM as a productive player to the Edmonton Oilers Hockey Club, what is Ryan Smyth the "face of the franchise" worth to the Edmonton Investors Group? Another $1MM per year? .5MM? It's gotta be something, no? And if it doesn't affect the Oilers salary cap concerns, what's the EIG so concerned about?
I think a differentiation has to be made between what Ryan Smyth is worth to the Edmonton Oilers Hockey Club and what he's worth to the Edmonton Investors Group.
Ryan Smyth and the Oilers have been negotiating a new contract for him for the last few months. Given Smyth's status as an Oiler (in fitting with the topic, use all the cliches you want, "heart 'n soul", "bleeds oil" "face of the franchise" etc) it's obviously a big deal in Oil Country (which I think is an attempt to ape the Red Sox Nation branding move). Apparently they're not far apart, Smyth is asking for somewhat over $25MM over 5 seasons and the Oilers offering $20MM over four. Roughly.
With the Oilers, salaries have to be balanced twice, both against the cap and against the pocketbook of the EIG. A look around the Oilogosphere will tell you that there's some suspicion over just how much the EIG has to spend on players salaries, that they cry poor while pocketing alot more than they let on. I'm no business student, so I don't really get into that myself. But from the basic looks of it, the critics are right, the oilers have a pretty high per-game gate revenue and just came off a huge moneymaker of a playoff run, all while aided by a large growth in the value of the CDN dollar over the last few years.
In any case, with the salary cap going up again next and the probability that the Oilers won't be spending that high no matter how much they're actually making, I'm not sure that an argument against overpaying Smyth because of salary cap concerns makes sense.
The argument for overpaying him (for an example, lets say paying him anywhere over 5.5 per) because of the restrictions on the EIG pocketbook is a little stronger. This is all assuming that the EIG does indeed make money, and will again this year.
It's safe to say that Smyth is indeed the face of the Oilers franchise. He's a (mostly) local boy, one of the few (or the only) draft picks from the 90's to actually make on the team and succeed. He's played his whole career in Edmonton, which is rare enough these days. What is that kind of story and myth worth to the EIG? What does he mean to the fans? I don't have any stats, but I'd be quite willing to bet that Smyth sweaters are the biggest sellers in Edmonton, by far.
The Oilers have been milking the glory years for a while now, what with the number retirements and banner replacements and whatnot, but eventually that'll run out. As an example, they're retiring Messier's number tomorrow night, and I'd bet they're gonna retire Lowe's number someday as well. And after that? From the last 17 years, who is there they could possibly retire? If they wanna follow the Flames lead (Vernon?) and do some reaching, they could do Bill Ranford's number 30 maybe...
But if Smyth plays his entire career in Edmonton, regardless of whether he wins a Cup or not, I don't see why he wouldn't get his 94 retired somewhere down the line.
Being able to give your franchise a face must be worth something in the long haul, even if it's not quantifiable. Being able to say "look, our players are loyal to you, so you can be loyal to them" to the fans must count for something, no? If some fans long for the days when a player spent his entire career with one team and was identified as such (Yzerman in Detroit, Beliveau in MTL, Bossy on the Island, Neely in Boston) what does it mean to them to have a player on their team do that?
So if Ryan Smyth the hockey player is worth say $4.5 - 5.0MM as a productive player to the Edmonton Oilers Hockey Club, what is Ryan Smyth the "face of the franchise" worth to the Edmonton Investors Group? Another $1MM per year? .5MM? It's gotta be something, no? And if it doesn't affect the Oilers salary cap concerns, what's the EIG so concerned about?
posted by Julian at 1:08 a.m.
2 Comments:
Well, I was saddened by the fact that he was traded, I have to say. And I would agree about him being the face of the Oilers and being worth what he was asking, although apparently it was more than the organization could afford.
All I can say is I would hate to be on that team right now, for numerous reasons. Sort of feels like the management has given up on you ...
So, who's going to step up? The opportunity is there.
I think most rational people had given up on the season already.
The sucess of this trade will be determined by what Lowe does in the offseason with the cap space and assets he has.
The rational side of me says that this was probably a smart trade. But for the other reasons I already wrote about, I till wish it weren't so.
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