Photo: Bruce Bennett

Braden Holtby is a restricted free agent (RFA) at the end of the season. With two seasons of RFA status remaining, Holtby won’t be eligible for unrestricted free agency (UFA) until the end of the 2016-17 season.

The Caps are not yet talking to Holtby’s camp about an extension. Meanwhile, Holtby is establishing himself as a top goalie in the league and not getting any cheaper. With that in mind, here’s a look at how much Holtby is worth.

Holtby is twenty-five years old. Twenty-five year old goalies don’t typically improve as they grow older, but their performance isn’t likely to decline soon, either. Goalies generally start to decline once they hit age 30, with a drastic drop-off around age 35. If the Caps want to mitigate the risk of Holtby’s production declining drastically over the course of a deal, they’ll avoid a 10-year mega deal a la Jonathan Quick.

To determine Holtby’s worth, I’m going to heavily borrow from a system that Eric T. (formerly of Broad Street Hockey, now working for an unknown NHL team doing analytics) previously developed to determine Henrik Lundqvist’s worth. I recommend checking out Eric’s work, which I’m going to link to throughout this article. Here are the basics, in his words:

Project Lundqvist’s (Holtby’s, in this case) save percentage and workload for the immediate future

Work out how many goals he would save relative to a replacement-level goalie

Convert that to an estimate of how many wins he is worth

Convert that to a salary estimate

Projecting Holtby’s save percentage and workload

Entering Thursday’s game against Philadelphia, Braden Holtby had faced 3088 5v5 shots in his career, posting a 92.6 save percentage (here’s an explanation of why 5v5 save percentage is thought to be the best measurement). Thanks to Brian MacDonald, now Director of Analytics for the Florida Panthers, we can estimate that Holtby’s true talent level is 92.4 percent.

Projecting Holtby’s workload is a little tricky since he’s played under a few coaches who handle goalies in different ways. Projecting Barry Trotz’s usage of goalies is also tricky, because Pekka Rinne, his starter in Nashville, had been hurt in recent seasons.

But during 2010-11 and 2011-12, Rinne was mostly healthy, playing in 84 percent of the Predators’ games, amounting to 69 games over an NHL season. So far in 2014-15, Holtby has started 82.5 percent of the Caps’ games, which puts him on pace to start 68 games. Projecting that Trotz would start Holtby 68 games per season seems like a fair estimate. At the rate the Caps allow shots under Trotz, Holtby would face about 1,911 shots per season over 68 starts.

Holtby compared to a replacement-level goalie

Again referencing Eric’s work, the save percentage of a replacement level goalie is 91.3. This means a replacement level goalie would give up 166 goals over the course of 68 games when facing 1,911 shots. Holtby, given his 92.4 save percentage, would give up 145 goals, a 21 goal improvement over a replacement-level goalie.

How many wins is Holtby worth?

Thanks to even more great work by Eric, we can estimate that six goals equals a win (if you think that number seems high, check this out). Therefore, Holtby’s above mentioned 21-goal improvement over a replacement-level goalie means that he is worth 3.5 wins above a replacement level goalie.

How much money is Holtby worth?

Gary Bettman has said that the salary cap next season will be about $73 million. Borrowing from Gabe Desjardins and Eric, we can estimate that the the average UFA costs a team about 4.5 percent of their cap space per win. If the cap is indeed $73 million next season, each UFA win will cost a team an average of $3.29 million. A 3.5 win player who is a UFA is therefore worth $11.5 million.

However, the first two years of any deal Holtby signs will be RFA years, which generally come about a 40-percent discount relative to a contract signed by a UFA. Anything beyond two years goes into Holtby’s UFA years. A team signing a player they currently have under contract gets about a 20-percent discount on the player’s UFA years compared to if that player had hit the open market and signed a deal.

Given Holtby’s 40 percent discount as a RFA, he is therefore worth $6.9 million per season for the next two seasons. For UFA seasons the Caps want to sign Holtby for before he is over 30, when his skill likely starts to decline, he is worth $9.2 million per season.

Holtby has four more season until he hits 30, the age when goalies start to decline noticeably, so a four-year deal makes a lot sense for the Caps. Holtby’s current estimated worth to the team over these four seasons would total $32.2 million, which would be a cap hit of $8.05 million.

This may sound unreasonably high, as it would put Holtby’s cap hit below only Lundqvist’s among all NHL goalies. Eric addressed this type of reaction when he estimated Lundqvist’s worth to be $14 million over a single season. Here’s his quote.

“That might sound crazy to readers who are used to cap hits topping out in the $8 million range. But remember, those cap hits are average salaries over the course of a period where a player’s skills are declining sharply. We’ll get to that shortly, but right now we’re just talking about what Lundqvist would be worth currently. If it’s reasonable to give Shea Weber, Ryan Suter and Zach Parise contracts that average more than $7.5 million per year from now until they are 40 years old — and pay salaries of $12-14 million in the first year of the deal, it should be noted — a $14 million figure for a one-year deal for an elite player might not be as crazy as it sounds.”

In other words, teams can opt to choose to place more risk of a contract in the term (Quick at 10 years, Corey Crawford at six years, Pekka Rinne at seven years) or the annual investment of the contract. A perfect example of the latter is Sergei Bobrovsky’s 4-year, $29.7-million contract extension he just signed with the Blue Jackets (using Eric’s method to project Bobrovsky’s current worth on a 4-year deal, he’ll be worth over $32 million).

Craig Custance of ESPN explained this distinction well

I would much rather trade money for term when doing a deal with a goalie. Bobrovsky making a lot but love the length of that deal. — Craig Custance (@CraigCustance) January 9, 2015

I’m on board with Craig’s thinking

Smart by CBJ to pay Bobrovsky what he's worth now and keep deal short enough that production level won't drop off much during deal. — Pat Holden (@pfholden) January 10, 2015

So, by taking the risk of paying Holtby $8.05 million per season for four seasons, the Caps would alleviate the risk of signing Holtby to a Quick-like 10 years that would come at a lower average annual value.

Both approaches involve risk. If the Caps sign Holtby to a shorter deal, in the range of four years, they will be paying him for only his prime years of production, which will put him among the highest paid goalies in the league. If the Caps sign Holtby to a longer deal, in the range of six or more years, the cap hit would certainly be lower, but they’d be paying him well into the years in which a goalie’s production historically declines.

The Caps are apparently playing a wait-and-see game in terms of extending Holtby. They shouldn’t. As of now, he’s worth $32.2 million over the next four season, and he’s not going to get any cheaper.