The Sens have lost their mind

The Ottawa Senators and Maid Marian Hossa have come to an agreement, avoiding arbitration. The three-year, $18M contract will pay Hossa $5M this season, $6M in 2006-07 and $7M in 2007-08.

The Sens said all along that nobody would be paid more than their Captain, Daniel Alfredsson, who will earn $4,662,894 this season. I guess they changed their mind.
I think it's fine that he'll get $5M this season, but it's the years beyond that where I have a problem. This is a case of the team allowing the player to control the negotiations. Had they held their line and taken it to arbitration, it isn't likely that the result would have been more than $5M. Chances are, it would have been less; something on the order of $3.75M-$4.25M (see my Hejduk/Demitra/Hossa comparisons). That would have been a one year deal that Hossa would have been obligated to take. The next season, he wouldn't have the kind of bargaining leverage to demand $6M escalating to $7M. Unless, of course he wins any combination of the Rocket Richard, the Art Ross and the Hart Memorial Trophies. The Sens, however, caved in. They swerved first.
The Sens are going to "just" make it under the cap this season. But what if the cap slides down next season? What if it stays at $39M or barely inches up? They'll be in rough shape. Daniel Alfredsson is under contract through the 2007-08 season at roughly $5M per season. They say they want to commit to long term contracts with Zdeno Chara and Wayne Redden, both of whom will be free agents after this season and could demand more than the $3.724 that they're both getting.
Go ahead, Ottawa... Spend to your heart's content. Commit to these foolish escalating salaries. Just don't complain that red and black hockey didn't alert you to the perils.