Back-of-the-napkin analysis of Tim Stützle’s fascinating big new contract

The Ottawa Senators have signed 20-year-old center Tim Stützle to an eye-popping eight-year contract worth $66.8 million that will pay him $8.35 million per year and keep him with the Senators for the foreseeable future. Stützle, the number three overall pick in 2020, is coming off a 22-goal, 58-point season in which he scored at an impressive pace of over a point per game in his final 30 games of the year.

It’s still relatively uncommon but increasingly popular for young forwards with high draft pedigrees to get maximum-length deals at high price points after completing their entry-level contracts. Just last year, we saw 2019 first overall pick Jack Hughes of the New Jersey Devils sign a comparable eight-year contract worth $64 million that pays him just a shade less than Stützle at $8 million per year. 

At a generalized high level, the logic is sensibly simple. For the team that heavily believes in its player, Hughes or Stützle could easily cost $10 million a year or more on a future deal with less team control or set their sights on other destinations and leave their current team entirely if they become superstars. Meanwhile, for the player who has yet to sign a big contract, how do you say no to guaranteed generational wealth when the direction of your career is still uncertain?

With that as context, let’s take a deep dive into Stützle’s new contract: the directions the new deal could go for the Senators and considerations that might have influenced their decision.

The first and most desirable outcome for Ottawa is that Stützle becomes a superstar… a 90-to-100 point-per-year juggernaut center that drives success for the franchise. Judging by the cost and length of the deal, the Senators appear to consider this as a reasonable projection. No one knows Stützle better than Ottawa management, and he has been a top prospect with superstar potential ever since his draft year, so let’s embrace this projection.

In the event that Stützle becomes a superstar, locking him up for eight years at $8.35 million per year has important benefits. It saves the Senators from upcoming negotiations where Stützle’s leverage will only have increased due to elite play and greater proximity to unrestricted free agency as he enters his best years. There’s always the threat of Stützle deciding to wait to become an unrestricted free agent and sign a long-term deal with another team. Ottawa could find itself dealing with its own version of the undesirable Johnny Gaudreau and Matthew Tkachuk exodus that Calgary experienced this summer.

Moreover, even if Stützle re-signs after establishing himself as a star, it likely occurs at a higher price point than $8.35 million per year. A franchise center scoring around 100 points per year is easily cracking $10 million per year on the open market with the potential to go even higher. The Senators, by paying up early and assuming the risk that he might not develop into this superstar, buy themselves savings each year in the future on his yearly salary.

Let’s assume the best case where Stützle becomes one of the best players in the league after putting up multiple around 100-point seasons but is not signed long-term and is due a new contract while closer to unrestricted free agency. Salary cap increases aside, it seems generous to Stützle to treat Nathan MacKinnon’s recent $12.6 million average annual value contract that made MacKinnon the highest-paid player in the league as a ceiling for Stützle’s next hypothetical deal. 

Accordingly, the ceiling of the team’s yearly savings from his current contract extension would be about $4.25 million per year, the typical cost of a middle-six forward or second-pair defenseman. That’s definitely not insignificant. After all, championship-caliber teams do put the icing on the cake by squeezing one more solid middle-six forward or second-pairing defenseman onto the roster. However, garnering one more middle-of-the-lineup player per year in exchange for the risk of having an albatross, franchise-hindering contract for 8 years (if Stützle doesn’t become a star) is a debatable tradeoff.

Fortunately for Ottawa, evaluating contract value strictly in terms of yearly salary would miss another key consideration. As silly as it might sound given the gigantic dollar value involved, there’s huge value in being the team with the right to highly compensate the superstar version of Stützle. When it comes to elite franchise centers, much of the fight from an assets perspective is to obtain the ability to be the team that pays them long-term. 

Players like the hypothetical superstar version of Stützle don’t generally hit the open market as unrestricted free agents when they are young and moving into their prime years. Moreover, they are also likely the most important ingredient in a strong cup contender. Their rare appearance on the open market and immense value to a team makes team control of a player who could conceivably develop into a franchise center extremely valuable. Think about what the Vegas Golden Knights did last year: they traded away a top prospect, solid NHL forward, and protected first-round pick to become the team that would employ high-end center Jack Eichel at a rate of $10 million per year for the next four years. Having Stützle under team control for eight years is of great value to Ottawa given his superstar potential.

So far, we’ve gone through scenarios where Stützle becomes a superstar. On the other end of the distribution of outcomes, it is possible Stützle plateaus and settles in as a serviceable hockey player who is good but not great. This would make this deal hard to swallow for Ottawa. In this case, he’s likely overpaid and hard to trade. In addition, teams can only pay so many players high salaries due to the salary cap and the need to field a complete team of around 22 players. If Stützle doesn’t grow as the Senators imagine, he occupies one of those precious few slots of players who can be paid around 10% of the salary cap without delivering the results consummate with such a salary. It would hamstring Ottawa for years on what is probably as a result a middle-of-the-road contender at best.

Ottawa’s gamble on Stützle is fascinating and calculated with a wide range of possible outcomes. It seems reasonable to cast the contract as Ottawa betting that Stützle’s chance of developing into a franchise superstar and the associated upside of team control for eight years outweighs the potential costs of overpaying a good-not-great Stützle, having to pay even more for superstar Stützle, or watching a homegrown superstar Stützle leave the team as a free agent. Moreover, the likely impending increases in the salary cap in the coming years can only make this more favorable for the Senators. 

How will this turn out? Only time will tell. The good news for Ottawa is that, regardless of whether this contract ends up being great or terrible, Stützle is set to have significantly better linemates and likely greater output this year with the arrivals of Alex DeBrincat and Claude Giroux. It will be exciting to watch for additional insight into the player Stützle is becoming over the upcoming season.