What's holding up Stamkos and Kopitar extensions? The 'R' word

If you’re Steve Yzerman, you should have had Steven Stamkos signed to an eight-year contract extension more than a month ago. Same goes for Dean Lombardi and his dealings with Anze Kopitar. It’s simple really. These guys are franchise players. Sign them at the going rate for the maximum number of years and get rid of the distraction.

After all, that’s what Stan Bowman did last summer and he killed two potential headaches with one Aspirin. Faced with a similar situation with Jonathan Toews and Patrick Kane, the Chicago Blackhawks GM needed exactly eight days to get his two stars signed to identical eight-year deals worth $84 million. Cap hits of $10.5 million per times two represented a bold move, but in reality, the Blackhawks got themselves a deal. Had Toews and Kane played out the final seasons of their contracts and gone on the open market separately, they would have cashed in even more.

So what’s stopping Yzerman and Lombardi from doing the same? Well, it’s likely the same thing that would have hindered Bowman if it had happened a year ago. It’s the word that Canadian prime minister Stephen Harper refuses to use on the campaign trail. The ‘R’ word, as in recession.

When Bowman signed Toews and Kane to their contract extensions last July 9, the Canadian dollar was trading at 94 cents compared to the U.S. dollar and there was no reason to believe things would change drastically. But the Canadian dollar has lost a mind-blowing 20 percent of its value since then, trading at 76 cents today.

Would Bowman have signed those deals with Kane and Toews if he had owned the crystal ball that almost every economist on either side of the border did not have at the time? We’ll never know, but we do now know that it will be much, much more difficult to fit those two deals under the salary cap if the Canadian economy continues its decline.

And that’s the biggest worry facing the likes of Yzerman and Lombardi. Until recently, you could sign players to long-term deals secure in the knowledge that the cap was going to go up significantly each year. And Bowman had plenty of reason to think that would be the case. The new Canadian television deal was about to kick in and there was little to believe that revenues were going to go anywhere but up. From 2013-14 to last season, the cap went up $4.7 million. But this summer it went up only roughly half that amount, by $2.4 million to $71.4 million.

That’s not to say that the cap will tumble because of the problems in Canada, but the biggest problem is that nobody seems certain what the landscape is going to look like when the dust clears. I recently spoke to Randall Bartlett, a senior economist with TD Bank, and he said projections are calling for a the dollar to sink as low as 73 cents by the middle of 2016, then settle before eventually rebounding back to somewhere between 80 and 85 cents. But he also pointed out that this time last year, nobody was predicting the Canadian dollar would tank to the extent it has.

And it’s creating as much uncertainty for GMs as it is for economists. You have no idea where the Canadian dollar is going and, therefore, what’s going to happen to revenues. The league expects revenues to continue to grow from a standpoint of dollars spent, but that growth could be severely curtailed, or even perhaps wiped out, by a less valuable Canadian dollar. So let’s say Yzerman signs Stamkos to a deal similar to the one inked by Toews and Kane. He also has to sign Alex Killorn, J.T. Brown, Nikita Kucherov and Cedric Paquette as restricted free agents in the summer of 2016 and then faces a murderers’ row of signings the next summer with Victor Hedman, Ondrej Palat and Tyler Johnson all coming up for contract renewals.

With players of that ilk on the docket, Yzerman needs the cap to go up and to have a salary cap that’s up over $80 million in the next couple of years or he’s got some very difficult decisions to make. And the fact that he has to make them in a climate of so much uncertainty has made things a lot more complicated.

That’s why all you’ve heard so far is crickets on the Stamkos front and not a whole lot more when it comes to Kopitar. The next breaking point will come when training camps open in less than three weeks and that’s likely when we’ll begin to see some real movement. But regardless of what happens, GMs will proceed with caution.