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Summer Signing Series – Ladd

As the summer free agency period comes to a close MPS is taking this opportunity to review the biggest signings of the summer from a purely financial perspective. To be fair to all the teams and players we’ll be looking at we’ll be using the same set of base assumptions throughout the series. Principally these assumptions are:

– The performance metrics we want to pay for are:

o Goals (40%) and Assists (60%) when the players are out at Even Strength or on the Power Play.
o Team Goals Against (100%) when the player is on the ice killing penalties.

– The salary cap starts this season at $73 million and increases 5%/year for future years (obviously this is up for debate but it basically reflects flat revenue growth and the assumption the NHLPA uses its escalator clause).

Signing #3 – Andrew Ladd

Next in our series is the New York Islanders trying to fill the hole that Kyle Okposo left when he moved across the state to Buffalo.

The Details

Also on July 1st Andrew Ladd signed a 7 year, $38.5 million contract with the New York Islanders which works out to an AAV of $5.5 million/season. Last season Ladd had 25 goals and 21 assists.

Breaking it Down

As explained in our earlier blog, point totals are fine but valuation needs to be done using rates (if this doesn’t make sense to you please check out that other post because the rest of this article/series takes it for granted) so let’s take a look at Ladd’s rates:

EVEN STRENGTH Last 3 Years Last Season
Goals/60 Min 0.72 0.62
Assists/60 Min 1.04 0.78
POWER PLAY Last 3 Years Last Season
Goals/60 Min 1.97 2.61
Assists/60 Min 1.87 1.05
PENALTY KILL Last 3 Years Last Season
Team Goals Against/60 Min 7.34 6.69

Looking at the rates above you’ll notice something a little different from our earlier pieces on Okposo and Lucic, penalty kill statistics! Unlike our first two players Andrew Ladd plays in all situations which will definitely help a little later with his total value. That said, he will need a little help because his even strength scoring over the last 3 years is just barely above average and his power play rates are below the average of 4.4 Pts/60 for a winger.

Ice Time

The other key factor to determining a player’s worth is how much ice time they get (again if you haven’t read this article yet you may want to do that so you can see the logic behind this). In Ladd’s case he has played the following:

ICE TIME Last 3 Years Last Season
Even Strength 13.78 13.66
Power Play 2.88 2.73
Penalty Kill 1.82 1.69

Similar to our other articles Ladd has had pretty consistent ice time over the last 3 years. What is a little different for Ladd is that he doesn’t play top line minutes at even strength, probably plays on the second power play unit and ends up killing penalties. All told though he comes in at about the same range for ice time at 18 or 19 minutes a night.

The Forecast

Combining Ladd’s performance and ice time and making the basic assumption that he continues to play the way he has over the last 3 years for the duration of his contract you get the following result.

Ladd11

I think this is a really interesting result. Basically, if Ladd can continue to play like he has for the duration of his contract he will be worth exactly what he is getting paid. The reason I find this so interesting is that about a year ago I had a conversation with a player agent (who will remain unnamed) and he told me, “you get paid for what you’ve done not what you’re going to do.”. Now I’m not suggesting this was the Islanders’ approach to this contract but it did end up working out almost exactly that way.

Beyond my fascination with the result though we do have the reality that Andrew Ladd is currently 30 years old and will turn 31 this December. While there are examples of players continuing to perform at or beyond the age of 38 (I’m looking at you Jagr) I’m not sure I’m comfortable forecasting that. Given Ladd’s skillset and style of game I’m willing to push back the decline a little but I’d still forecast a performance decline starting in year 4 to get a more realistic sense of his value.

Ladd22

What we can see with this scenario is that Ladd ends up being pretty overpaid in the first year but then gradually grows into the contract as the cap increases and ultimately stays just a little overpaid for most of the contract. On the whole, the average value for Ladd comes in at $5.1 million/season which is obviously a little lower than the contract’s $5.5 million/season cap hit. That said, I’ll make the same comments here that I did on the Lucic post – this forecast and calculation only values goals and assist at even strength and on the power play and goals against on the penalty kill. It’s entirely possible to add in some additional statistics or even try to incorporate the value associated with Ladd’s leadership skills but we are not doing that for this series and for that reason I will concede that there is room to justify the extra $400K/season.

Verdict

LaddVerdict

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Summer Signing Series – Ladd

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