Ovechkin makes NHL history…without an agent

Posted on January 12th, 2008. Written by Emmett Jones.

Alexander Ovechkin made history yesterday with the NHL’s first $100+ million dollar contract ($124 million to be exact). The other interesting point of note? He’ll be wearing a Washington Capitals jersey until he’s 35 (he’s 22 right now).

Ovechkin’s 13 year, $124 million dollar deal is the first contract in NHL history to guarantee at least nine figures of income, and apparently the decision to make the deal wasn’t even that big a deal to Caps owner Ted Leonsis (even though he had been burned by the Jaromir Jagr deal in the past). From ESPN,

“I’m a risk-taker,” said owner Ted Leonsis, who has made Ovechkin the cornerstone of a rebuilding plan to restore the Capitals as a perennial playoff team. “And if you’re going to make a long-term investment, who else would you do it with? This takes away any of the issues of how committed we are to winning a Cup, how committed we are to keeping a team together.”

Ovechkin’s contract pays out to $9 million a year for years 1-6 and $10 million per year for years 7-13. He also will have a limited-movement clause that will be activated later in the contract that basically allows Ovechkin to pick a number of teams to whom he cannot be traded each year. Ovechkin is making $3.83 million this season.

Not bad for not even using an agent, right?

And he won’t have to pay an agent a dime. Ovechkin worked out the details himself in negotiations with Leonsis and general manager George McPhee. His parents, Tatiana and Mikhail, were also in town for the final round of talks for a deal that runs through the 2020-21 season.

I guess this goes to show that it is possible to negotiate a good deal, or at least a history making deal, on your own behalf (Daunte Culpepper?) as long as you have a decent ideas as to what you want to do. Although the fact that the deal is for 13 years…maybe a bit long? I mean, I’m guessing that 6 years from now a 7 year $70 million dollar contract in hockey isn’t going to be at the top of the contract lists in the NHL, but that Ovechkin will more than likely be one of the games top players. But I guess thoughts such as these are for 7 years from now (although it is likely that this would be an agent’s mindset going into the deal).

When you think about it, this Ovechkin contract situation is very telling about the current state of hockey. Hockey contract scale has only reached the 9 figure mark in 2008. Meanwhile baseball surpassed the $250 million dollar mark (ala A-Rod) 8 years ago. $100 million plus contracts are also common place in basketball and football as well. Last year (2007) the NHL did see an increase in revenues to in between $2 and $2.25 billion (up from $2.1 billion) but this 5% increase was mainly due to an almost 6% increase in ticket prices. Baseball and football, in comparison were each over $6 billion in revenue in 2007. So, while its good that the NHL has now moved into larger scale contracts, it really has to be a veiled optimism because they obviously have more than a little ground to make up before they’re back with the “upper echelon” sports.

ESPN: Ovechkin, Capitals agree to 13 year, $124 million dollar contract extension

Washington Post: Sports Business Journal: NHL Revenue Up

CNN Money: Baseball’s revenue close to catching NFL as top $ sport

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