When the Hurricanes inked Tuomo Ruutu to a four-year, $19 mil. contract, the general consensus among the hockey blogosphere is that the team severely overpaid to retain him. There is no doubt that the contract is an overpayment but what I, and other Carolina fans, want to know is what can we expect from Ruutu over the next four years and what does he have to do to justify his contract value?
To figure out if a player is producing relative to how much money he is making, we can use an equation called "Goals Versus Salary." Invented by Rob Vollman of Hockey Prospectus, Goals Versus Salary (or GVS) measures how many goals a player is contributing towards his team compared to a player making the same amount of money. After the jump, we are going to see how much Ruutu needs to produce to justify his contract and whether or not we can expect that from him.
Figuring out GVS is pretty simple. What you do is take the player's salary, subtract $500,000 from it, which is the cost of a replacement level player in the NHL, and then multiply it by three to figure out his expected GVT (Goals Versus Threshold)*. We use three because the average GVT for a team is 120 and if we were to fill a team with 20 replacement level players, it would cost about $10 mil. in salary and leave behind around $40 mil. in cap space. Take the 120 team GVT and divide by the $40 mil. in excess cap space and it shows that each player should contribute three goals for every $1 mil. they make. Keep in mind, this formula was made BEFORE the cap floor was increased to $64 mil. so that will likely have an impact on how many goals a player "should" produce relative to his salary. I will touch on that later.
*Goals Versus Threshold shows how many goals a player contributes compared to a replacement level player. More on that here.
Knowing that Ruutu is going to make $4 milllion next season and then $5 million in each of the seasons after that, Ruutu's expected GVT for the next four years is going to need to be 10.5 next year and then 13.5 in each of the next three. Can he do that? When looking at Ruutu's history, it is a longshot. One of the negative things about GVS is that players who make a lot of money get punished for under-performing and sometimes it's a by a large amount. That will likely be the case with Ruutu as the expected GVT for a player making $4-5 million is bewteen 10.5-13.5, meaning Ruutu will have to contribute 10-13 more goals than a replacement level player to justify his contract. That sounds doable but the only time Ruutu has been above 10 in GVT was the 2008-09 season when he scored 26 goals.
When calculating GVT, goals and points are the main things looked at for a player's offensive contribution. Most of the forwards who are 10-13 in GVT right now are guys who are producing at least 20 goals and 50 points. Some examples of players in this class are Joe Pavelski, PA Parenteau, Jason Pominville, Jamie Benn, Johan Franzen and Adam Henrique. Defensive and shootout production is also factored into GVT, so there are some other players who have strong GVT ratings because they shine in other areas besides goals. Ruutu isn't exactly known for his defensive play, so we don't really care about that right now. What we are more concerned with is how much he will produce over the next four years and if he has a chance of getting to the target GVT level.
To get an idea of what to expect from Ruutu, we are going to re-visit a post from the off-season where I projected Ruutu's production for this season by using comparable players. Comparable players would be ones that had similar scoring patterns to Ruutu over their careers and going by the names selected, it doesn't look like Ruutu's production will improve much from what it is now. At 29 years old, Ruutu is good for about 15-25 goals and 35-55 points per season and he's probably going to end up in the middle of that mark this season. Next year, things could go either way when looking at the comparables.
29 Year Olds:
If Ruutu were to play a full season (which is not a sure bet given his style of play), then he will likely have something around 16-25 goals next season when going by comparables. The worst kind of season he could have would be something similar to Shawn Burr's or Martin Lapointe's. He's only making $4 mil this year, so to justify his contract, he will probably need to have at least 20 goals and 50 points. That is doable, but it is far from a sure thing.
30 Year Olds:
Here is where we begin to see some player's production tail off a bit and just in time for Ruutu to make $5 mil instead of $4 mil, which means his "expected" GVT is now 13.5. Most players in this category score at least 60 points and if they don't, it's because they have at least 23 goals or add a lot of defensive value to their team. Going by the comparables, it looks like that the Hurricanes have a good chance of getting a solid season out of Ruutu but not one that's worth $5 mil.
31 Year Olds:
None of these players scored over 50 points when they were 31 years old. Part of the reason is due to injuries (only one played a full season) but you can see a drop in just about every player's point-per-game total. Using comparable player never produces completely accurate results but the general trend among forwards in the NHL is that their production decreases after they turn 30. That's not true for every player, but it is the case for a lot, especially ones who enter the league at an early age.
32 Year Olds:
None of these players scored more than 20 goals and 45 points, so things look bleak for Ruutu when it comes to producing enough to justify how much money he is making. He can still be a solid top-six player who is good for 15-25 goals and 35-50 points per year, but that is obviously not worth $4-5 mil in salary. There are a couple issues I have with this method, though. The biggest of which is determining how much
The salary cap increasing led to a lot of teams overpaying for top-six players (see Tomas Fleischmann, Brooks Laich, RJ Umberger, Ville Leino, etc.) so $3 mil. per goal is debatable in today's market. Rob Vollman addresses that in his article on GVS and states that he went by what makes sense rather than what teams are actually doing, which is completely fair given the decisions that some front office's have been making the last few years. Still, I think the salary cap raising (along with the cap floor) had an effect on what the market value is for players and should be taken into consideration when measuring how many goals a player should produce.
The cap now is at $64 million, which would leave a team with about $54 mil in excess space if they signed a team full of replacement level players. Take the team average of 120 GVT and divide by $54 mil. and a player should produce 2.2 goals for every $1 mil. he earns per year. Going by that formula, Ruutu will need to score about 8 goals above replacement level next season and 10 the three following years. That makes his expectations for next year much more reasonable when factoring in his contract, but it gets dicey after that, especially if his production tails off. No matter what way you look at it, it is tough to say that the Canes are going to get much "value" out of Ruutu the next four year, but I still maintain that this contract is not as bad some are making it out to be.