Will Ken Holland's deal with Edmonton raise all ships for GM salaries or is he the outlier?

The Edmonton Oilers ponied up big money to land Ken Holland, and with the cap changing how much big budget organizations can spend on players, could it mean more money starts to get spent on the architects behind the on-ice product?

I’ve never quite understood why GMs and coaches are so hesitant about sharing their salary figures. After all, look what salary disclosure has done for the players over the years. But if the figures were out there for all to see for executives the way they are for the players, Ken Holland would be sitting at the top of the heap with his new five-year, $25 million deal with the Edmonton Oilers. The guy who replaced him in Detroit, Steve Yzerman, wouldn’t be far behind, if at all.

This should be good news for GMs who are either being hired or having their contracts renewed. There are currently 185 players who have an annual average value of $5 million or more. Some of them are third- and fourth-line performers. Now the economies of scale are much different, but it stands to reason that the person running your hockey department is at least as valuable as a second- or third-line player. Of course, I’ve never quite understood why minor league coaches don’t get paid a lot more, since they’re the ones who have such a pivotal role in how an organization’s players get developed and prepared for the NHL.

“The rule of thumb used to be that GMs got paid about the same as the average player,” one GM said. “Then those salaries increased because of $11-million players, but at the end of the day it’s still supply and demand.”

So the question remains, is the Holland contract an outlier to a man with unparalleled career success paid by a revenue-rich organization that badly needed someone with experience or will it be a bell weather for future GMs, one that will raise the tide of all ships? Probably a little bit of both. Much of this was a function of Holland being available and the Oilers desperate to turn their fortunes around. Would the Arizona Coyotes or Carolina Hurricanes been able to offer this kind of money to Holland? Not on your life. (One conditioning coach recently told me that a small-market team reached out to him inquiring about candidates for a strength coach. He said the conversation ended pretty quickly when he suggested he could find a half-dozen qualified people for a salary of about $200,000. It turned out the team was only willing to spend about $40,000.)

Speculation among GMs is that when Holland was given a three-year contract extension to be the Red Wings’ senior vice-president, his salary was between $3 million and $3.5 million, so it was going to take a significantly better offer for him to leave the only team for which he has ever worked.

“Not many guys are going to be able to walk into that situation with four Stanley Cups, seven Presidents’ Trophies and 16 division titles,” another GM said. “We can all say what we’ve done over the past couple of years, but he was available when Edmonton really needed him. When you’re as good as Ken Holland, you either work for the Red Wings or go somewhere else. Once you’re good, the high-paying jobs seem to find you.”

Most GMs coming into the job can expect salaries ranging between $1 million and $1.5 million, with the more experienced GMs earning $3 million or more. But the same teams that used to spend their extra revenues on players under the old system are the same ones that are well equipped to throw money into their hockey operations departments. That means not only better-paid executives, but also more of them in all areas, including scouting, analytics and minor league staffs. And those teams that have historically been budget teams with players are the same with the front office. That’s why an experienced coach such as Rick Tocchet, who has done quite a good job under the circumstances in Arizona, makes just $1.5 million, while the New York Rangers had no problem giving David Quinn $2.4 million a year on a five-year deal to lure him away from Boston University.

The best comparison is probably the Mike Babcock contract with the Toronto Maple Leafs, which he signed four years ago. (Has it really been that long already?) With one Stanley Cup, a ton of regular-season success and an extensive international resume, Babcock signed an eight-year deal worth $50 million, which comes to $6.25 million a year. It would stand to reason that Joel Quenneville, with three Stanley Cups to his credit, would be worth at least a much. But he got $1 million less a season on only five years with the Florida Panthers.

“I think it will raise the bar a little bit,” one GM said of Holland’s deal, “but I think it’s more situational.”

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