The Detroit Red Wings’ Cap Problem

Detroit Red Wings
The Detroit Red Wings are in trouble and it doesn’t look like there’s an easy solution.

The Detroit Red Wings were once a legendary organization. Riding an unfathomable playoff streak and a few Stanley Cup victories, teams idolized Detroit and looked to replicate their success. But while they still hold their playoff streak, slowly the team started to decline and now it’s in the worst shape it’s been in years. General Manager Ken Holland has given huge contract after contract to his players, in some cases vastly overpaying to retain their services. Even though they just barely made the playoffs this year, they have the second most total salaries and are actually over the salary cap ceiling. Things aren’t as bright in Motor City as they used to be as the Red Wings face a troubling cap problem.

It’s tough to say exactly when the problem began happening but the foundation was laid many years ago, back when Henrik Zetterberg and Niklas Kronwall needed new deals. In early 2009, Zetterberg signed a massive 12-year contract extension that carried a cap hit slightly above $6 million. Combine that with Niklas Kronwall’s seven-year deal two years later and suddenly you have two very expensive players around for a very long time. Looking at them now, these two deals limit the team’s flexibility since both players are now declining in their old age. Both Zetterberg and Kronwall are 35 years old and don’t justify their big cap hits anymore, leaving Detroit not much they can do.

However, that was just the beginning of Detroit’s problem. The term on those contracts were long but at least Detroit was giving a lot of money to their star players. In their prime, Henrik Zetterberg and Niklas Kronwall were some of the best players in the league and earned the money they were given. The Red Wings’ cap problem started compounding when Holland started giving out those types of contracts to more of his Red Wing players. During the middle of the 2012 season, Jimmy Howard received a six-year contract worth $31.8 million while at the beginning of the 2013 season the Red Wings announced that they had resigned defenseman Jonathan Ericsson to a six-year contract. Suddenly Detroit had a lot of money tied up to a small group of players, players that would go on to provide little value for the 2016 Red Wings team.

But still by then, the Red Wings weren’t in the same kind of trouble that they’re in now. The panic of an impending cap crunch only really started to set in as Justin Abdelkader was nearing the end of his contract. Abdelkader was able to get a seven-year, $29.75 million extension and almost immediately everyone recognized it as a terrible contract (like here, here, and here). I don’t think I need to go into why the deal was so bad but the point is, Holland grossly overpaid to keep one of his not-so-good guys around and continues to pay for that mistake. But sadly (and almost unbelievably), it wouldn’t stop there.

The climax of the Red Wing’s journey into their cap problem seems to be this year’s free agency. We gave an in-depth coverage of the Red Wing’s free agency so I’ll just summarize it: Frans Nielsen is now making $5.5 million for six years and Detroit committed $3.4 million to Thomas Vanek and Steve Ott. I actually liked the Vanek signing and while Nielsen’s contract isn’t as bad as Abdelkader’s, it’s still not good. On an average team, Nielsen’s deal wouldn’t even be too big of a problem. Every team has some bad contracts and Nielsen’s not a terrible player. But then Holland goes and extends Darren Helm and Danny Dekeyser for a ridiculous amount of money and now Detroit is in one of the worst situations imaginable.

To be honest, I think what’s most surprising (and worrying) about this whole thing is the fact that Holland isn’t showing any sort of signs that he can stop and learn from his mistakes. Or does he not think some of these moves were mistakes? Either way, it’s a problem. If Ken Holland can do this and potentially firing him isn’t even being talked about, what would he have to do to get fired? You can argue that it would be hard for anyone to maintain success for over 20 years while not missing the playoffs but Holland has just plain not done a good job lately. Here’s what the Red Wings are spending about $34 million on.

Zetterberg ($6.083) – Nielsen $(5.25) – Abdelkader ($4.25)

Kronwall ($4.75) – Dekeyser ($5)

Ericsson ($4.25)

Howard ($5.29)

Now compare that to what the Nashville Predators are getting for around $32 million.

Neal ($5) – Johansen ($4) – Forsberg ($6)

Josi ($4) – Ellis ($2.5)

Ekholm ($3.75)

Rinne ($7)

The example isn’t perfect but you get the idea; the Red Wings are spending a lot of money on players that aren’t too good. It’s almost difficult to understate the problem that Detroit finds itself in considering they’re going to be stuck with these contracts for a really long time. The Red Wings constant willingness to hand out long-term deals now leaves them with a huge cap problem with no easy solution. My only suggestion is to sign Brendan Smith to a long-term deal at the end of the year when his contract is up. Preferably one with a very large cap hit.

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