Covid-19 is running rampant throughout the world, but especially in the United States where cases, hospitalizations and deaths are reaching unprecedented levels.
That statement isn't political, it's simply fact.
In addition to this pandemic taking nearly 250,000 American lives (about 1.3 million world wide) as of this writing, which is brutal in and of itself, as well as placing an immense strain on front-line workers, especially in the health care field (among many other things,) the economic engine that has driven the U.S. is beginning to sputter. Although it's unlikely that the U.S. will see a shutdown like we had last spring, the economy is set to slow to a crawl as we try and deal with a pandemic that's getting worse by the day.
That said, there is good news on the horizon as at least one vaccine with a high efficacy rate looks poised to be available within the next two months with more to follow as they finish their trials.
Those are also facts.
Every aspect of the economy has been effected including the sporting world as major professional leagues have either not allowed fans to attend games (hockey and basketball,) have allowed fans for games late in the playoffs (baseball) or have allowed fans based upon state regulations (football.) And Even the behemoth that is the National Football League, which has more television revenue ($9.5 billion) than over 50 countries (according to worldometer.com,) is feeling the pinch. The 2020 NFL salary cap was $198 million for 2020 and was expected to reach $210 million for 2021, pre-pandemic. Revenue projections for next year, however, plummeted which could have preceded a drop in the 2021 cap to $130 million until the league and the NFL Players Association got together to reach an agreement in July where they would spread out losses over the next three seasons with minimal cap-reduction consequences.
Unlike the NFL, the gold standard of the North American big-four professional sports, the National Hockey League is a gate-driven league and without fans in the seats, they've been getting hit particularly hard by the pandemic. To keep it simple, the 2019-20 NHL salary cap of $81.5 million will be the same this year and will remain the same in 2021-22 before inching upward the following season (if possible.)
Relatively speaking, that's a big win, especially when you consider that approximately 37% of the NHL's revenue come from the gate (as opposed to 16% for the NFL.)
Many NHL teams will be struggling under the weight of these financial pressures but the Buffalo Sabres may not struggle as much. Were this the mid-latter 2000's we might be singing a different tune as ownership then had a dictate of "just break even," which in the present environment would be impossible. Terry and Kim Pegula, owners of the Sabres since 2011, have stated time and again that they will pump resources into the team and they backed it up with a projected salary expenditure for this season of over $77 million with a team cap-hit that stands at just over $78 million right now, according to CapFriendly. That could change but right now the Pegulas are projecting an image of wanting any dollars to be spent wisely, which includes cutting back certain areas while backing the roster with financial resources.
The assumption here, simply based on the NHL's salary cap projections for the next two seasons, is that there will be a 2020-21 season and that over the course of the next two seasons the NHL will slowly be getting back to a sense of normalcy. They and the NHLPA will need to do some financial juggling and individual teams will need to figure out for themselves how they want to approach these extremely difficult times, but overall there's an optimism here that beginning with the 2022-23 season sports in general, and the NHL in particular, will have begun to regain their financial footing.
Until then, it's not that far-fetched to believe that player's salaries will remain relatively in check and this is particularly good for the Sabres as they have a franchise defenseman in Rasmus Dahlin that will be coming off of his entry-level deal at the end of this season.
Dahlin is still on course to hit his franchise-defenseman designation. Despite some flaws, his impressive display of skating and offensive skills have already been on display as a teenager for the last two seasons and he still has a high ceiling. He's still filling out his 6'3" frame and continuing to gain experience playing against the best players in the world while continuing to show growth and Dahlin has already proven that he's the type of player that any team wouldn't hesitate to sign to a long-term deal.
Prior to the pandemic, there were thoughts being expressed in Sabreland about Dahlin's next deal and whether the team should pursue a short-term deal or dive right into an eight-year, max contract. The opinion here at the time was that of the latter but the pandemic has changed things and it's possible that the Sabres could stretch two deals into a decade-long association.
Dependent upon what kind of season Dahlin has, he and the team might simply come to the conclusion that an eight-year deal is the best way to go with a projected price-tag of anywhere from $6-8 million. Using the high figure, Dahlin's new contract would take him to unrestricted free agency at age 29 at a total of $64 million. Barring anything weird happening while assuming that he continues on his trajectory and NHL revenue will continue to climb post-pandemic, it's not that far-fetched to think that his following contract will see at least a 50-75% increase which would take him to a cap-hit in the $12-14 million range, a figure that might be a little conservative. It's also not that far-fetched to think that his term will be 7-8 years dependent upon who he signs with with that final year coming in his mid-latter 30's.
That's a long way into the future and a lot can happen between now and then. In saying that, Buffalo could very well think (relatively) shorter term now and end up locking Dahlin up for the next decade.
Because of the financial ramifications wrought by the pandemic, the trend right now has been for smaller salaries and generally shorter terms. St. Louis Blues Stanley Cup captain Alex Pietrangelo, was the prime free agent on the market this off season. The defenseman was coming off of a seven-year deal with an average annual value of $6.5 million. Most projected the UFA to sign a long-term deal for at least $9 million in the off season. He signed for just under that at $8.8 million/season. Winger Taylor Hall was the unequivocal best forward on the market and most believed the 2018 league MVP would be signing a long-term deal in the $8-9 million range. He signed a one-year deal with Buffalo for $8 million.
There's little reason to believe something similar won't happen next season as the league still doesn't know when it can start the 2020-21 season, how long it might be or whether there will be at least some paying customers in the stands.
As we look at Dahlin, the Sabres could go for the short-term deal in the one or two-year range and worry about the long-term deal later. Once again, if everything goes as projected, the team might be able to sign Dahlin to a two-year deal somewhere in the $6 million range while still retaining the rights of the then 23 yr. old defenseman at the end of the 2022-23 season. Circling back to projections made by the NHL, the salary cap at that time may be around $82.5 million, or only $1 million more than the prior three seasons because of the pandemic.
Following that season, Buffalo and Dahlin could be looking at an eight-year deal, which would probably fall in the $10 million range. At the end of that deal Dahlin would still be in his prime at 31 years of age.
It's a pay me now or pay me later situation leaving the Sabres with this: do they pursue go a max deal now and pay a premium later and hope that he'll re-sign as a UFA? Or is a two-year bridge followed by a max deal in order?
Both scenarios would have been bantered around regardless of the pandemic, but the financial ramifications of Covid-19 make the latter presumably much more team-friendly and they could have their franchise defenseman locked up for 10 years.
Not a bad deal for the team and the defenseman.
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