Donald W. Reynolds National Center For Business Journalism

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The risks of big contracts

July 21, 2015

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Multi-million dollar sports deals often make headlines. But you rarely hear what kind of pressure those contracts put on the players that sign them.

Two members of the Chicago Blackhawks lifted the lid on that last week, according to ESPN, when the NHL Stanley Cup champions held their annual fan convention.

Blackhawks forwards Patrick Kane and Jonathan Toews each agreed in summer 2014 to eight-year contract extensions worth $84 million to each player.

Their annual compensation, $10.5 million, will be the highest salary cap for NHL players in the coming season. Between the two of them, Kane and Towes make up nearly 30 percent of Blackhawks’ salaries for the coming season.

Towes, the team’s captain, told the Blackhawks convention,

“I think front and center is the contracts with Kane and I that are kicking in, and that’s where everybody’s kind of looking. I understand that. The two of us have worked hard to own up to that, and I think the pressure will be on us maybe more than it has in past years because of that fact. I think we’ve been up for challenges like that before, and we’re ready for this one, too.”

Kane said he’s also thought about what the money means. “You want to make sure, especially with a short summer, you’re coming back in shape and ready as possible, ready as anyone else in the league because you know you’re going to have that expectation and that accountability to step up, that you live up to that contract.”

The Blackhawks forward added, “I don’t think it’s something we think about too much throughout the season or when we’re on the ice or anything like that, but maybe a little bit during the summer it makes you train a little bit harder and make sure you’re ready coming into the season.”

In the baseball world, big contracts can often be risky, given the spate of injuries to high-profile players. SpotTrac keeps a running tally of teams and the salaries that are being paid for players on the Disabled List.

According to SpotTrac, there are currently 166 major league players on the DL whose salaries total $590.4 million.

The highest-paid injured player is the Phillies’ Cliff Lee, whose 2015 salary is $25 million, followed by Miguel Cabrera of the Detroit Tigers, at $22 million, and Washington’s Jayson Werth, at $21.5 million.

Interestingly, the top-10 highest-paid players on the DL are all in their 30s, which shows how expensive extensions and contracts can be as athletes get older.

For story ideas, look at your local teams’ highest-paid players. Have they spent any time on the injury list? Conversely, who on your team is the lowest-paid? What’s their injury situation like? Talk to sports agents who represent your players for insights on how deals are crafted.

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