Dadonov's Modest Contract Tells us the Flat-Cap Salary Squeeze is Real

Evgenii Dadonov has performed as a true frontline NHLer for three seasons. He should've been worth much more than a three-year, $15-million contract, but the flat salary cap of $81.5 million is painting middle-tier UFAs into a corner.
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It was only a matter of time before the flat NHL salary cap, held to $81.5 million after COVID-19 killed gate revenues, started to visibly dent player contracts in 2020 free agency.

Even the top members of the UFA class only got their money with some caveats, Alex Pietrangelo still scored proper value for his services on a seven-year, $61-million pact with the Vegas Golden Knights, but Vegas had to shed bodies left and right just to make room for him, and it’s debatable whether they’ve actually improved their roster since they lost so many core players. Taylor Hall got an $8-million AAV from the Buffalo Sabres, but you can remove the first ‘A’ from AAV. It’s not an average. It’s a one-year contract. He’s betting on himself to score a bigger, better deal a year from now when, hopefully, the cap goes up.

Where the squeeze really starts to become noticeable is in the upper-middle tier, especially now that we’re almost a week into free agency and plenty of teams have run out of cap space to chase moderately large fish. Take right winger Evgenii Dadonov, 31, who signed with the Ottawa Senators Thursday.

He entered the 2020 off-season as one of the top UFAs on the market. I had him ranked as the No. 5 overall UFA the day before free agency opened Oct. 9, third among all forwards. Dadonov had delivered three strong seasons as a top-liner with the Florida Panthers since returning to the NHL in 2017-18. His 182 points over that span placed him 48th among all NHLers in scoring and 11th among right wingers. Among 393 forwards to log 500-plus minutes at 5-on-5 in the past three seasons, Dadonov ranked 47th in primary assists per 60, between Claude Giroux and Phil Kessel, putting Dadonov in the 88th percentile. He was 27th in points per 60, between Patrice Bergeron and Taylor Hall, putting Dadonov in the 93rd percentile. Dadonov was a 71st-percentile shot generator, so his profile skewed toward that of a playmaker, but he’s unquestionably been a true first-line forward for three seasons. It certainly helped that Dadonov played primarily with Aleksander Barkov and Jonathan Huberdeau, but their possession numbers actually dropped more without him than his did without them. And besides, “thrives with other great players” is hardly a bad thing. It means he can keep up.

It was thus fair to project Dadonov for lucrative contract. Since he was on the wrong side of 30, he might’ve been hard pressed to land anything close a to a max-term deal, but he’d easily earned four or five years at an AAV of $6 million or more. Radulov, for instance, signed a five-year contract with a $6.25-million AAV with Dallas in 2017, two days before his 31st birthday.

So it was a bit of a double-take moment to see Dadonov get just three years at a $5-million cap hit from the Senators. They had enough cap space to pay him more, but the market likely dried up enough that, competitively, they simply didn't have to. It’s very exciting news from Ottawa’s perspective. Dadonov adds a true scoring threat to play on the top line with Brady Tkachuk. Considering the Sens also have a new starting goaltender in Matt Murray and will break in AHL rookie of the year Josh Norris, not to mention top blueline prospect Erik Brannstrom, in the coming season, there’s reason to expect a much more competitive team in 2020-21, and that’s before factoring in whether Tim No. 3 overall pick Tim Stutzle gets a shot in camp if his broken arm heals sufficiently.

So the Dadonov deal should have Sens Nation celebrating. But he’s very clearly worth more than what he got, and the contract suggests the flat-cap squeeze is fully on.

Is it just in my head? Not according to multiple high-profile agents I polled today. When I asked if the flap-cap squeeze was a real thing, I got answers like “YES!” and “Without a doubt.” Some players accept that this is the reality of the world today, while others have a harder time with it, one agent suggested. That’s why we’re seeing deals like Dadonov’s or even Hall’s one-year pact.

"When you see free agents hitting the open market and signing short-term deals and in some cases taking paycuts, the cap squeeze is on full display," said a prominent agent. "The pandemic and resulting flat cap understandably took NHL teams by surprise. The fact is, there are less dollars available in the system than anticipated for planning purposes one year ago."

While there’s no guarantee we have fans in stands and thus no guarantee the NHL gets actual gate revenues in 2020-21, one agent explained that Seattle expansion will be a boon. We know the Kraken must spend to at least 60 percent of the cap, and it’s a virtual certainty they shoot for the upper limit, as they’ll be taking on other teams’ bad contracts in exchange for draft picks and/or prospects. The creation of jobs and the vacating of contracts from 31 other teams during the expansion draft should theoretically add some financial wiggle room for 2021 free agency, the agent said.

But right now? Expect more deals like Dadonov’s. Upper-middle-class UFAs will continue to walk away with much more modest contracts than what they’re actually worth.  

"We know the elite players are always going to capture elite money," said another agent. "The downward pressure is taking place on the so-called middle class. The players earning between $2 million and $4.5 million. We are seeing many situations where these players on renewal are being pushed down to $1 million annually or lower. I would go so far as to describe it as carnage."

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