Tristan Luneau and the Anaheim Ducks are the latest example of the NHL salary bubble.
The rising salary cap ended up becoming propitious for some players getting hefty raises. And all it took was one GM with an itchy trigger finger to set off a full-scale run-up.
Of course, there’s an explanation for the Ducks’ penchant for issuing large contracts to up-and-coming players. As Elliotte Friedman noted, Anaheim GM Verbeek wasn’t about to let anyone else take care of his business for him.
“What we’re seeing is that the Ducks have learned the hard way, and other teams are looking at this now too, you better take care of your business before somebody else takes care of it for you.”
That’s the rationale behind the move. But the bottom line is that the sudden increment in NHL salaries is a common economic phenomenon that occurs when money suddenly enters a market.
No, this is not teams rewarding players. The Tristan Luneau situation is an example of teams trying to lock in a certain commodity at a more favorable price point since they know that salary inflation will invariably make these players more expensive down the line.
Think about it this way: Consumers who know that prices will skyrocket soon, generally tend to make purchases before the price rises again. They’re already paying high prices to begin with. But they’ll bit the bullet before they have to bite down on an even bigger one.
Tristan Luneau Contract Based on Projections
The Ducks were willing to give Tristan Luneau a six-year, $43.2 million deal based on just 14 games of NHL experience. As implausible as that may seem, a recent article by Marco D’Amico of RG pointed towards Luneau’s valuation based on projections, and not recent history. One of Luneau’s agents, Scott Lachance, made that clear to D’Amico.
“It’s interesting, because there was no contract comparable really for a player having played so few games and based solely on projections,” Lachance said. “Anaheim wanted to get some term in the deal, which we were willing to discuss, and then we got to the AAV and the deal was done.”
Anyone thinking this is off the wall, they’ll be surprised to find it’s standard procedure in the business world. Investors often shell out millions of dollars for companies based on what they think the companies will become, not what they actually are.
In this case, the Ducks could profit from Tristan Luneau in more ways than one.
All It Takes Is One Bad Contract to Burst the Bubble
So far, all of megadeals this season have worked out all right. Leo Carlsson looks good. Meanwhile, both Connor Bedard and Macklin Celebrini are dealing with injuries.
But one has to think that a player like Tristan Luneau, who has become such a massive bet, could be the reason the bubble bursts.
All it will take is for one of these massive contracts on young, unproven players to blow up, before GMs around the league begin questioning the value.
In fact, GMs would almost wish that one of these deals fails spectacularly. That way, organizations can point towards that player as a cautionary tale, and try to drive a harder bargain.
Whether that player is Tristan Luneau, or anyone else, will take some time to unfold. In the meantime, the NHL salary bubble should soon enter hyperbubble territory, now that Cale Makar has broken a crucial psychological barrier.
Tristan Luneau and the NHL Salary Bubble