This morning the official numbers came out for Braden Holtby's impending arbitration hearing, set to take place on Thursday. The Caps' offer came in at $5.1 million, or just a shade under the $5.5 million offer that's reportedly been on the table during contract negotiations. Holtby's camp, however, came up with an ask that seemed to send shockwaves through the hockey world: $8 million.
That's a lot of money. A lot of money. To put that into context, only one other goalie in the NHL makes that much money, and his name is Henrik Lundqvist. As good as Holtby has been, he doesn't have the resume or the body of work to support such a figure - nor is this a UFA deal, which Lundqvist's contract was. So what on earth makes Holtby and his agent think that he'll get $8 million?
Nothing. They probably don't.
What people often forget during arbitration hearings is that these aren't contract negotiations, where you're trying to find a compromise that makes sense for both teams over a longer term. This is a one-shot deal, a bridge deal determined by a third party that just gets you to the next set of negotiations. So the object here is not to compromise but to win - both for the short-term and as a means of establishing more favorable ground when this contract expires (in this case, next summer, as the team elected a one-year deal rather than two so that Holtby will still be an RFA... and we can perhaps do a similar dance at this time next year). The team is going to lowball the player, and the player is going to ask for much more than they expect to get - that's how it goes.
Why? Because the arbitrator will generally (although not always) find the middle ground between the two sides. So if the Caps and Holtby do end up going through with the arbitration process, the likelihood is that the ruling will fall somewhere in between the Caps' $5.1 million and Holtby's $8 million, or roughly $6.5 million... which is what Holtby has apparently been asking for all along.
It's a negotiation tactic of sorts, a way to stack the deck in his favor a bit. Sure, it's a bit out there considering that only four goalies in the NHL even have a cap hit that cracks $7 million; part of the arbitration process is having to prove that the guy is worth that much using, among other things, comparables from around the League, and that's not going to be an easy task. It's a risk, but it could pay off.
And the fact is that there's an element of risk here for both sides if they go through with the hearing. For one thing, arbitration hearings are unpleasant (particularly for the player). While the player has to defend why he's worth more, the team has to justify giving him less - in essence, they have to badmouth him and list reasons why he's not as good as he thinks he is. That can get ugly.
For another, whatever ruling is handed down basically establishes the ground floor when the process begins again next summer. If it's on the lower end of the spectrum, Holtby will need to far exceed what he did this past season in order to justify any sort of substantial raise. If it's higher, the team has to deal with an RFA whose qualifying offer alone next year would be one of the higher cap hits on the roster (and run the risk of having him playing out his RFA years here and then departing via free agency). Add in the fact that a higher amount means an already tight cap situation gets even tighter, and the Caps may not be afraid of arbitration... but they probably don't want to do it if they can avoid it.
It's this element of risk which has led to so many teams and players opting to get a deal done before the arbitration process is even complete. Earlier this week, Nashville's Craig Smith and the Predators went through the entire hearing before hammering out a five-year deal. And a few years ago, P.K. Subban's $8.5 million arbitration request went up against the Canadiens' $5.25 million counter until they, too, opted for a long-term deal before a ruling could be handed down. It's become the norm in the NHL - sometimes both sides just need the threat of arbitration to get things done.
Given that the Caps and Holtby remain pretty close in the actual contract negotiation, with the latest reports putting the Caps' offer at $5.5 million to Holtby's request of $6-6.5 million, there's plenty of reason to be optimistic that they follow that Subban/Smith path and work something out in the next few days. Both sides want a multi-year deal, both sides want the relationship to continue, and getting something done before the hearing (or at least before the ruling) is the best way to achieve all of those goals.
After all, the alternative is that Holtby's camp has to go into the hearing and try and justify that $8 million with comparables... and do so with a straight face.