When should a player go to arbitration, and when should a player accept what appears to be a very good deal, but could be less than market value?
When should a team take a player to arbitration?
The Florida Panthers decided they needed to take their goaltender, Roberto Luongo, to arbitration. They felt his asking price of five years at $28 million ($5.6 million/year) was too high.
The thing is, arbitration can be tricky. The arbitrator only looks at the numbers, and the numbers don't tell the whole story. However, they often tell a large part of it.
Roberto Luongo was confident that his numbers would give him a contract closer to Khabibulin's $6.75 million/year. Looking at the numbers, he might have had a very good case. In the 2003-2004 season, Khabibulin played in 55 games, with a 28-19-7 record, and backstopped the Tampa Bay Lightning as they became Stanley Cup Champions. Roberto Luongo played in 72 games, with a 25-33-4 record on a very bad team.
Games played and winning records are only part of the story, though. Khabibulin had a 2.33 GAA (goals against average) and a .910 save percentage. Luongo had a 2.43 GAA and a .931 save percentage. At first glance, people see a 2.33 GAA and think that's a lot better than a 2.43 GAA. It is, but GAA has a lot to do with the team that plays in front of the goalie. To see how good a goalie is, it's better to look at save percentage, that is, the number of saves made divided by the number of shots agains. Khabibulin faced 1,414 shots. Luongo faced the most shots in the league at 2,475. That's 1,064 more shots than the highest paid goalie in the league. What's remarkable about Luongo is that he ranked 2nd in the league in save percentage while facing at least 505 more shots than any other goaltender. Not only that, Luongo was fourth in the league with 7 shutouts to Khabibulin's 3.
It looked to Luongo like he couldn't lose, but he did. He was awarded $3.2 million, $3.55 million less than Khabibulin, and $2.4 million less than what he was asking. His net gain, however, is a -$1.8 million, because he turned down a five year, $25 million offer from the Panthers. There is a good chance the cap will go down next summer, and five million is the most Luongo might be offered. But that's not the only reason he should have taken that deal.
The NHL has changed the way it does arbitration. Instead of allowing the arbitrator to set his own price, he must now choose one of the two numbers being presented to him. In Luongo's case, he chose a fair number, offered by the Florida Panthers. For some reason, he felt Luongo's price of $5.6 million was too high.
While I am of the opinion that Luongo is the better gaolie, he has yet to prove himself in the playoffs. Khabibulin has done just that. In the playoffs, Khabibulin posted a meager 1.71 GAA, a .933 save percentage, and 5 shutouts. Without playoff numbers to compare, the arbitrator had no choice but to go with the lower number.
Hopefully, this is a good sign for the future, where arbitrators won't be able to upset the pay scale by awarding larger salaries than what the players are asking for.
The thing is, there is a good chance this move is going to hurt the Panthers in the long run. Had they offered something between 4 and 5 million, perhaps Luongo wouldn't be so upset over a one year deal. He will again be a restricted free agent next season, and maybe he would have looked forward to proving his worth this year to get a long term deal more to his liking. However, the Panthers stiffed him, asking for less at arbitration than anything they had offered him before. There was another offer for 5 years at $21 million ($4.2 million/year). Luongo is not happy, and just might bolt as soon as he can.
