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Summer Signing Series – Stamkos

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 #4 – Steven Stamkos

Admittedly, this should have been the first signing in our series but we kind of forgot about it because it happened before July 1st…at any rate here is the biggest deal done (by total dollars) this summer.

The Details

On June 29th, Steven Stamkos broke the hearts of Leaf fans everywhere when he signed an 8 year, $68 million contract with the Tampa Bay Lightning (AAV of $8.5 million/season). In 2015-2016 Stamkos had 36 goals and 28 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 Stamkos’s rates:

EVEN STRENGTH Last 3 Years Last Season
Goals/60 Min 1.16 0.92
Assists/60 Min 0.83 0.76
POWER PLAY Last 3 Years Last Season
Goals/60 Min 2.67 2.77
Assists/60 Min 2.53 2.08
PENALTY KILL Last 3 Years Last Season
Team Goals Against/60 Min 3.66 0.98

If you’ve been following along in the series you’ll notice that these are tremendous scoring rates. In particular, Stamkos’ 3 year average for even strength Goals/60 is incredible. Very few players will get close to 1 Goals/60 and Stamkos was at 1.16! For context, this is even better than Alexander Ovechkin, who scored at 1.13 Goals/60 over the same time period. On the power play, Stamkos is also very impressive putting up around 5 Pts/60 which is consistent with being one of the best players in the league.

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 Stamkos’s case he has played the following:

ICE TIME Last 3 Years Last Season
Even Strength 15.34 15.27
Power Play 3.91 3.70
Penalty Kill 0.38 0.33

Obviously, Tampa Bay likes their chances when Stamkos is on the ice because over the last 3 season he has consistently played above 19 minutes/night. Relative to the other players in our series so far this is definitely on the high end.

The Forecast

Combining Stamkos’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.

Stamkos0

So obviously these are some really big numbers and we can see right away where the basis for this contract came from. Assuming Stamkos plays the way he has over the last 3 seasons he would be worth around $7.6 million this season and would eventually be worth well over $10 million in the last year of his deal when the cap increases. Of course we like to play a little with these forecasts in this series so let’s consider some alternate scenarios.

In the first scenario we assume that Stamkos’s best scoring years are behind him and the way he scored last year (36 goals) is the new normal. To do this in the tool we simply change his even strength Goals/60 to 0.92 (what he had last year) and push that through all 8 years of the contract. When you do this you obviously see that his value drops relative to the first contract but it’s remarkably close to the actual contract ($8.3 million versus $8.5 million)…

Stamkos1

In a scenario similar to the ones we ran for Okposo, Lucic and Ladd, we can also assume that Stamkos starts at his 3 year rates but then declines as he ages near the end of his contract. In Stamkos’s case he is a little younger than the other players in our series but let’s still pretend he starts to decline in performance by 5%/year during the 6th year of his deal.

Stamkos2

Again what this scenario shows is that Stamkos is worth very close to the deal he actually signed with Tampa Bay and in this particular instance he’s actually a little underpaid. Of course, if we really wanted to we could create a scenario where Stamkos’s scoring starts at last year’s level and he starts to decline at some point which would probably show this deal as a slight overpay but in general it seems pretty fair and considering how teams have a strong tendency to overpay star players this deal feels like a pretty big win for Steve Yzerman and the Tampa Bay Lightning.

Verdict

Verdict bar stamkos

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Summer Signing Series – Stamkos

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