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 Inside the NHL
Posted: Tuesday June 29, 1999 04:18 PM Predraft Questionnaire | First but Not Best In the Crease Teams are taking out insurance to lower the cost of bonus clauses By Kostya Kennedy
Shortly after the Bruins' regular season ended, Boston's parsimonious general manager, Harry Sinden, engaged in an unusual conversation with center Jason Allison. Sinden joined Allison in lamenting that the player had finished the season with 76 points, four points shy of the 80 he needed to earn a $1 million bonus. "Too bad," Sinden said. "I guess I wasted my insurance premium." Sinden isn't the only team executive who has started taking out insurance to cover players' performance bonuses. American Specialty Underwriters, a company that began insuring against the payout of such bonuses in 1992, held about a dozen policies with seven teams, including the Bruins, last season. "It saved us a chunk of change," says Sharks general manager Dean Lombardi, who insured bonuses in the three-year, incentive-clause-laden deal signed by center Patrick Marleau before the 1997-98 season. When Marleau, who had a base salary of $925,000, finished the '98-99 season with 21 goals, 24 assists and a +10 rating, he earned an additional $2.4 million in bonus payments. San Jose spent only $230,000 to insure his deal. "We paid out more than we took in this year," admits Bill Hubbard, the president of American Speciality Underwriters. "Overall, though, we expect to get a 20 percent return from these policies in the long term." That means that big payouts such as the one to Marleau are likely to jack up the cost of premiums, which are set on a player-by-player basis. Still, some teams will continue to find insurance appealing because premiums can be a fixed part of a club's budget, while large bonus payments are a significant X factor in a team's finances. The insurance policies offer another benefit as well. Traditionally, when a player approaches a lucrative milestone late in a season, a conflict can arise over whether his team is giving him sufficient ice time to gain the bonus. "If a bonus is insured, we can root for a player more than if we're paying it ourselves," says Bruins assistant general manager Mike O'Connell. "Insurance helps create goodwill."
Draftees Adrift: For many of the 272 players drafted last Saturday, being selected will end up as the highlight of their careers. Most will never get an NHL contract. "Ten years ago you would sign all your picks," says Capitals general manager George McPhee. "Now if you draft nine guys, you'll sign maybe two or three." The reason, not surprisingly, is money. Because NHL payrolls are skyrocketing, many teams are unable, or unwilling, to invest in most of their draft picks. Under league rules, teams can hold the signing rights to a player for two years, watch him play in college or juniors and then decide if he's worth a contract. In most cases the answer ends up being no. Some nonsignees are top prospects, such as defenseman Nick Boynton, whom the Caps selected ninth in 1997. Boynton refused Washington's contract offer, which included a $1 million signing bonus, and elected to reenter this year's draft, an option available to all draftees who aren't signed within two years. On Saturday, Boynton was selected 21st by the Bruins. While he slipped from his original position, he fared better than most players who reenter the draft: Of the 109 players who did so in '97 and '98, only 15 were redrafted and only three moved up. Unlike Boynton, most draftees never even get the chance to turn down a contract offer. "It's sad," says Mighty Ducks general manager Pierre Gauthier. "Kids are there with their parents, their name gets called, and it's the biggest day of their lives. A year or two later it's just a business."
Predraft Questionnaire: Each year before the draft, the Central Scouting Service provides NHL teams with the responses from hundreds of potential draft picks to a set of non-hockey-related questions. The responses give teams a small measure of insight into the prospects, at least in theory. SI obtained copies of this year's completed questionnaires, which revealed -- don't be shocked now -- that many of the draftees are single-minded about hockey. For instance, when asked what ambitions he had outside the game, defenseman Jeff Finger, who was drafted in the eighth round by the Avalanche last Saturday, wrote, "None, really." Other players aimed a little higher. Undrafted defenseman Josh Legge said that he aspires to "own a Dodge/Chrysler dealership," and forward Kyle Anderson, who also was not selected, wrote that the person he would most like to meet is "Wayne Gretzky or God, because there are a lot of questions to ask them both." Then there was undrafted forward Andrew Bogle, who wants to be introduced to "the inventor of the Porsche 959," and defenseman Eric Braff, also not picked, who would like to talk with Nostradamus so he could "see what the future held." That's a sentiment many teams might share, particularly before draft day. The Thrashers, who selected 6' 1 1/2", 205-pound center Patrik Stefan with the No. 1 pick in last Saturday's entry draft, hope to reverse a 1990s trend that has seen the top pick fail to emerge as the best NHL player of his draft class. Here are the No. 1 selections from '90 through '95 and the player chosen later in that draft who became the better NHL player. (It's too soon to assess players selected in the past three years.)
Issue date: July 5, 1999
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