Thinking At the Margin

11 09 2010

As of today Tom Brady doesn’t have to worry about how much it will cost to get his car fixed. With his new 72 million dollar four-year extension, $48.5 million of which is guaranteed, Brady can buy himself a replacement 100 times over.

It is safe to assume that he will never have to worry about carefully examining the costs and benefits of a decision for the rest of his career.

That’s not the case for many other teams in Boston in this “year of the contract”. From the gridiron to the rink, major questions are starting to circulate around the front offices of the Hub’s beloved sports teams and as the leaves begin to fall and the students begin to repopulate the streets, it’s perhaps appropriate then to have a little refresher course in Economics 101.

Economics is the study of how to efficiently allocate the limited resources of the world; this is done by trying to make sure that the benefit of a decision outweighs the cost of it.

Robert Kraft made that decision today, securing the quarterback that built the Patriots into what they are today with his 225 career touchdown passes and three Super Bowl titles. For Bill Belichick and Co. assuring that Brady stayed in New England for the rest of his career far outweighed the $72 million it took to keep him.

The front office in Foxboro did their homework, but what about the guys over on Causeway Street? With informal skates and rookie camps starting up, the Bruins head into the upcoming season knowing that team captain Zdeno Chara and assistant captain Patrice Bergeron are in the last year of their respective contracts.

Both have already stated that they want to stay in Boston for the long haul but talks have not advanced beyond initial meetings on both fronts. Both players can be considered cornerstones of the franchise and can expect a decent payday, but some things stand in the way of that.

First, the Bruins’ very tight cap space (which currently sits at an uncomfortable $-3,087,771 according to capgeek.com) and second, the conclusion of the Ilya Kovalchuck contract saga that many believe will put an end to cap-circumventing “career contracts.”

So, like any good economist it’s time to measure the costs and benefits.

Chara long ago established himself as one of the elite defensemen in the NHL. He led the team in +/-  and has not averaged below 25 minutes of total ice time in his four seasons in Boston. Under his leadership, the Bruins were second in the NHL in goals against with 191 last year despite dealing with an injured hand for a large portion of the season. Not to mention that Chara is only two seasons removed from winning the Norris Trophy.

Bergeron, surprisingly enough, is the longest tenured Bruin despite only being 25-years-old. He broke on to the scene in 2003 (after being drafted 45th overall in that year) with a 39 point season his point totals skyrocketed until a grade three concussion limited him to only 10 games in the 2007-08 season and almost brought a quick end to his career. His team-leading 52 points last season (including his 11 points in the playoffs) show that his concussion is quickly disappearing in his rear-view mirror and at 25 his best years are ahead of him.

With a Harvard degree under his belt it’s doubtful Bruins general manager Peter Chiarelli needs a refresher course in economics but the on ice product has quickly proven to be worth the price.

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