Hockey and Economics
As someone who studies economics, I am concerned with the concept of ‘opportunity cost’ . That is, what is the cost of the action forgone, for the action taken? In economics, it’s a fundamental concept that attempts to assign value to alternative choices. What does this have to do with hockey? Well, the Leafs’ recent trade made me think of it.
Like many of my posts, this is another that questions the actions (or inactions) of Dave Nonis. This isn’t anything personal, I just believe that Nonis’ choices are ultimately detrimental to the Leafs’ success, both present and future. That’s not to say that trading Cody Franson was a bad idea. I’ll give Nonis the benefit of the doubt and agree that he needed to be traded. Although, it’s quite possibly due to the fact that there was no cap room left with some of the inflated contracts Nonis has agreed to previously. But let’s not stray, let’s go from this simple statement: Franson had to be traded.
Cody Franson
Cody Franson is a 6’5, 200+ pound fairly agile defenseman. Sounds pretty good to me. As a GM in the NHL, Franson would definitely make my ears perk up. Then we have the Nashville Predators, are having a pretty good year and, obviously, have a pretty good roster. Looking at this roster, as a Leafs’ fan (or just an armchair GM) who would you want? There’s the obvious: Shea Weber, Pikke Rinne, and Filip Forsberg are great players that I’m sure Leafs fans would welcome. But, no disrespect to Franson, they’re probably out of his league.
Let’s go back to the idea of opportunity cost. We’re working from the assumption that Franson had to be traded. If I’m Nonis, getting rid of one defenseman would logically mean I’d try to replace him. Presumably this happened. It’s really unfortunate that we aren’t privy to all GM to GM conversations. It’d be amazing if they were released someday, kind of like the Freedom of Information act. But I digress. Although I’m sure Nonis wanted Weber, that trade is obviously not going to happen. Volchenkov is alright, but he’s old, but he’s also cheap. So there isn’t really a very clearly made swap.
As mentioned, Franson is good, and he’d be tricky to give up. The Leafs are “rebuilding” (a term I hate), so they’re attracted to youth, enter the draft pick (albeit, not a great one, but still a 1st rounder). Then, because Franson is better than the unknown, Leipsic is the kicker (maybe this is the other way around but whatever). I’ll be honest, I don’t know much about the kid but he’s got good junior numbers and I’ve heard him described as a Brad Marchand or Brendan Gallagher – i.e. an agitator with scoring ability. Sounds good to me. Right about now, I’m into anyone that might bring some intensity to the Leafs’ play.
Missing Logic
Here’s where it gets tricky for me to understand Nonis’ logic: Santorelli for Jokinen. Santorelli, dollar for dollar, might have been the best Leaf this season. If you look at his output versus his salary, Santorelli was paid 190K per goal – compare this to Clarkson (580K per goal or Kessel at 400K per goal). He was good in the FO circle and he was also pretty decent in shootout situations . He isn’t young but he’s practically a baby at 29 compared to Jokinen (36). So why bother? Or if for some reason you want to get rid of him, maybe because he’s going to want a new contract and some more money, why not go after Ribeiro or Fisher? Neither of which are young guys but both will likely be better than Olli-I’ve-played-on-every-team-in-the-NHL-Jokinen at 2.5 million! So, the action forgone? The Leafs got rid of a center that was playing well for $1.5 million a year, and replaced him with a center that’s arguably worse, for $2.5 million a year. In this case, ‘opportunity cost’ is may be easily quantifiable, it may work out to be simply $1 million.
So once again Nonis’ decisions are baffling. We’ve given up a good player that didn’t need to go, and got nothing great in return. Whether he’s not smart enough to realize that his decisions are poor, or his previous actions have painted him into a corner, the result is the same, the Leafs are poor, and there isn’t a lot of light at the end of the tunnel.
Thanks for reading. Please do comment, I love to hear your thoughts on my ramblings.
Economist/epidemiologist interested in the intersection between sports analytics (advanced stats) and intuition.
If nonis worked for any corporate employer I have worked for they would have thrown him out a window. What do you think the Target employee that said lets move to Canada is doing at this moment. He signed a guy for a seven year contract that was not a fit.
He is spendinding 26 million dollars for a players that will never play.
I know about the cap hit the Leafs are tight because of him.
Bye Bye Mr Nonis
I agree. We run into the same situation as Phaneuf. We either sign him with term and $$$ or he walks. If they were fair with him earlier and not keep signing him to one year contracts it wouldn’t have come to this. Hopefully that 1st turns into a keeper.
Sorry for spelling Santarelli and Jokinen wrong, perhaps if I were considered what I was writing a thesis I would have been more careful. I do agree with you that Franson is worth more than a late 1st if he was not a UFA. In your thesis you forgot to mention the opportunity cost that would be lost signing him for the 6 million or more that he will demand. The late first is certainly a lot more than what Nonis got for Grabovski.
Grabovski was a weird one all around. I liked him. Carlyle obviously didnt think much of him, nor did Nonis. I dont think Franson was worth 6, but given that Dion is on 7, I could see him asking for 6. The Phaneuf contract just messes up everything for the Leafs I think.
We don’t know what went on behind the scenes with Mike Santorelli. Maybe the Leafs offered him a contract extension and he opted to play the free agency market instead. If you’re not likely to make the playoffs and a player is set to be an unrestricted free agent in the summer because they won’t re-sign with you, you have no choice but to trade them or risk losing them for nothing. I wouldn’t be shocked if Daniel Winnik gets traded before the deadline as well. Solid player. But if he is not happy with Toronto’s contract offer or he wants to try his hand at free agency, then he’s going to be traded.
In my opinion, I don’t think Cody Franson would have landed a late 1st on his own. Nashville wanted the Santorelli piece too and they needed to dump Olli Jokinen’s salary to make the deal work. And then they threw in a decent prospect into the deal to make the deal more fair for Toronto since Toronto was giving up two solid UFAs and taking on Olli Jokinen’s $2.5 million salary.
Toronto didnt take on Jokinen’s salary though. They only took on 800K. Nashvile retained the rest.
If santorelli isn’t involved in the trade we probably don’t get a first or leipsic. Doubt anyone is trading a 1st rounder and good prospect for a UFA defenseman who is most likely gonna end up making more money than he’s worth next year. He will probably demand 5 mil in free agency and someone desperate will bite on it like the Leafs did with Clarkson. Franson is a good player and loved his passion and attitude but he’s not worth the money he will get in free agency my opinion.
Your article is poorly written. Since you are breaking down the trade into Franson for a late 1st and Santarelli for Jokinin. Instead of what it really is. Why not just say Franson for a late 1st and Santarelli for Leipsic.
I wouldnt say it was poorly written, but I can see you disagree with my thesis. If you want to say my writing is poor, you should probably not having spelling mistake in yours ;-).
Also, Franson, in my opinion, is worth more than a late 1st.
what I fail to comprehend is how anyone can follow the Leafs (as a fan) and continue to speculate on what the Leaf management might or mightn’t do. I was once a Leaf fan (Sittler/MacDonald/Salming era till early into the Sundin/CuJo years) until I realized that this team will never win a division title – let alone the cup. The problem is money – too much money – that Leafs fans (and even more so, corporations & sponsors) spend on a team that always loses. What motivation or impetus is there for MLSE to increase costs when revenues are so high?
From a business perspective it totally makes sense for the Leafs to have a guy like Nonis do what he is doing & put a spotlight on his team and his trade maneuvers – because it creates media buzz & keeps fan attention focused on what “might” happen. Face it – it will NEVER happen. MLSE should just change the name to the Maple Losers so that everyone who follows the team recognizes ownership’s focus on profit and (the team’s) losses. This was why 15 years ago I made my no. 2 team, the Habs, my only team. In Montreal, if the Habs start losing or performing poorly, people stop going to games. The team loses money & thus the owners are forced to provide a better team & regain revenue. If the Leaf fans did the same thing, the team owners would have to do something to satisfy their investors/shareholders or risk losing their own own positions. And then you would not have a guy like Nonis making moves that everyone, including Mr. Adam R., pay attention to. The Leafs fans would focus on what the owners are doing to direct management to make trades that are clear & make sense & don’t keep everyone asking, “why?
So let Nonis do what he wants, if everyone stops paying attention – and more importantly stop paying money – positive change will take place. Then management’s trade moves might be exciting to watch.
Thats a fair (big picture) point to make and Leafs fan have been complaining about it for year. There does seem to be a lack of caring in the Leafs organizations. It almost seems, at an organizational level, they make ridiculous decisions, just to provide fodder for the pundits and keep them ‘interesting’ (I use this word loosely, frustrating may be more appropriate). In any event, being a Leafs fan is a pseudo exercise in masochism.
“His output to salary cap hit ratio is great”
Sure this year, but what about the rest of the time? We’re talking about a 29 year old third line center after all, a 40 pts kind of guy tops…plus this is the same guy who’s managed to not be able to hang on in Nashville (yes originally), Florida, Winnipeg, Vancouver and Toronto. Traded for a Fourth rounder, placed on waivers, two different one year contracts. Who know’s maybe he’s finally carved out a niche for himself in this league…but I’ll bet he doesn’t get anything beyond 2 yrs for his next contract. Because why would you? A replaceable 14 minutes a game? You should be able to develop talent that can replace a third liner no problem…if not you have much bigger problems than this trade.
Not trading him would have been far worse than hanging onto him.
If Nonis didn’t trade Santorelli and let him walk via free agency in July you’d have even bigger issues, after all 20 games of Jokinen is worth more than nothing (even if it amounts to nothing).
You make a good point. Thanks for actually acknowledging one of the key sentences in my entire post. I agree, Santo’s good year might not persist, and he’s not young. So its hard to argue with what you said except that I would say, in a rebuild, I think it’s worth keeping players that have good output to salary ratios. So, if I was Nonis, Id sign Santo to a 2 year, 2 million deal. That means one position is shored up for the rebuild, and yeah, if he didnt agree, then he has to go. That being said, I think he’s worth more than Jokinen.
Poor article all around, aside from the title I guess or I wouldn’t have read it.
Nonis’ actions aren’t very difficult to comprehend. The basic concept and understanding around a GM who has embarked on a rebuild is that they will be dealing their higher-paid, better players and that the GM is never in a position of power when he’s trading them. If you’re Nonis, you can’t hide that. The Leafs have fallen so far in such a short period of time, the only avenue for them is to get rid of cap space and contracts to get picks and prospects.
The 29 other GMs in the league are well-aware that Nonis has to move the better-valued Leafs. At this point, all they have to do is either sit back and wait for word that one of the Leafs’ players is available, or keep in touch with Nonis to find out what prices are for guys. Nonis is the one who has to move his players, or else watch some of them walk via UFA status and get nothing. a 7th-round conditional pick is better than getting a zero return. There’s no way that Poile would have agreed to part with Ribeiro or Fisher – they’re important to the Preds’s success and I highly doubt they’d be ok with being dealt to Toronto.
Nonis played it safe by trading Franson and Santorelli before the deadline. A possible alternative is waiting too long and doing what Garth Snow was forced to do with Vanek – deal him for Collberg and a second-rounder. It’s almost certain that Snow could have received a better return for Vanek had he dealt him prior to five minutes before the deadline.
Poile came out the winner for this trade because he received two legitimate NHLers in exchange for a late first-rounder, a decent prospect and a salary dump. There’s every reason to assume that the Preds will re-sign Franson since he played there previously and the organization really prides itself on strength along the blue line.
As always your comments are the most well thought out. I think Nonis is in a corner that he can’t make a good deal out of… but its one that he constructed for himself. I also think trading Santorelli reflects a lack of understanding in value (and is cowardliness) from Nonis. Your last paragraph is my point exactly. I, for once, would like to see Nonis make a trade that he (the Leafs) came out of on top and that showed genuine foresight and intelligence.
Nonis is absolutely backed into a corner, BUT in some fairness, he inherited the situation he inherited from Burke wasn’t great at all. Burke was the one who traded for Kessel (stupid trade from all angles) and set out on the terribly foolish venture to ignore a draft rebuild, preferring instead to sign players out of college and free agency. Burke assembled a team based around a core of Phaneuf, Kessel, Lupul, Bozak, Kadri and JVR that has failed miserably. If Nonis had decided to deal one or more of these guys after Burke was fired, I doubt many would have approved. Pretty much a no-win situation for Nonis even if he did acknowledge that the Leafs’ core was wholly inadequate.
I don’t see how Nonis or the Leafs will win any trades in the next several months. If the speculation is accurate and players like Kessel and Phaneuf are on the trading block, the Leafs are going to take a loss on both of them. Nonis is dealing from a position of weakness from every aspect and fellow GMs simply have to wait. Some guys like Clarkson and Robidas are almost certainly un-tradeable.
The best that Nonis can hope for is generating a bidding war for a player like Kadri or Gardiner or Kessel. In that light, a team MIGHT be willing to overpay for a player.
You forgot to mention the most important item in this Leafs-Predators transaction; namely, a first round pick to the Leafs. It is for this reason alone that your hockey acumen is just, well, musings, and that this whole piece of “writing” is nothing short of horsefeather drivel. Have a nice day, sir.
Cheers. I didnt actually forget to mention that. It’s a deep first round pick sure. And Leipsic + pick for Franson makes sense. It was the Santorelli and Jokinen aspect of the trade where the logic fell apart IMO. Thanks for reading.
Spending one word giving credibility to a Franson for Weber trade is moronic and immediately made me lose interest in this article and categorize you as a hack and poor economist
I dont think you read that sentence correctly. But I appreciate you clicking.
You missed the whole point. We got a first round pick in a deep draft and jokinen will be gone at the end of the season, he was a salary dump for Nashville we didn’t want him we just took him.
Nonis wasn’t looking for roster players. Were not going to win now. And a team like Nashville isn’t going to trade roster players. Santorelli has been an excellent player but the fact that he’s such good value is why hes so tradable. You’re actually the first person I’ve heard who doesn’t like the trade.
Not liking the term rebuild is kinda silly I think. Especially considering that for 10 years we’ve avoided it and tried to compete by trade — and failed. Now were finally doing it right! Sorry I don’t mean to sound like a jerk — but your article is completely off base. The return was in the pick and prospect. Not jokimen.
I agree with your first paragraph. IMO a GM should always be looking for roster players. No GM will ever do a proper rebuild (hence why I hate the term). Most limp into it halfheartedly.. which is definitely Nonis’ style. A full rebuild requires re-structuring of the salary cap which Nonis can’t do really, even if he wanted to.
Like Mark said, clearing out players was not going to sign and at least got a first out of it .Let’s see how he uses the pick, No need for instant analysis.
Also, nonis attempted to extend both players, but they both have all the power in a year where they played well and were headed to free agency. It’s unlikely the leafs would have been able to sign either one in the summer. But yeah, franson could have been given a long term deal a long time ago and the leafs wouldn’t have been forced to trade him, and that’s on nonis.
This trade wasn’t jokinin for santorelli. It was franson and santorelli for a 1st and leipsic. The leafs had to take jokinin’s salary to make the deal work. The preds are a budget team.
Yeah. I think you just missed my point slightly. That is, Santorelli shouldn’t have been involved in this trade (but Im not surprised he was). He is exactly the type of player that Nonis should be trying to retain throughout a rebuild. His output to salary cap hit ratio is great.