Before and during the NHL Trade Deadline, franchise decision-makers are forced to evaluate some factors that will affect the direction the organization will take for the remainder of the season. First and foremost, they need to decide the team’s chances of nailing down a playoff spot and what are the prospects of playing in multiple playoff rounds. Secondly, they need to assess the financial health of the organization. Are team revenues sufficient to support taking on more salary to acquire additional talent, and does the team have the salary cap space to bolster their roster?
An essential factor in the decision-making process is the season average attendance numbers to date. The NHL is an attendance-driven business with game-day ticket, merchandise and concession sales being the most significant contributor to franchise bottom lines. Of the estimated $4.88 billion in reported revenues for the 2017-18 season, fan attendance contributed $3.68 billion to total league revenues, or 75.4 percent. Given this fact, we can understand how strong team attendance numbers would drive franchises that are looking for playoff success to be “win maximizers” at the deadline, or do they choose to be “profit maximizers” because of inadequate attendance revenues, choosing to focus more on the team’s bottom line for the remainder of the season.
NHL Franchise Decisions at the Trade Deadline
The following table provides an assessment of the five NHL teams that had the highest projected salary cap space as of March 8, 2019. These teams would have been in a favorable position to accumulate talent if their point totals and attendance numbers justified acquiring more talent for the playoffs.
The Carolina Hurricanes, at $16,360,584, have the most remaining cap space of all NHL teams, while the New Jersey Devils are close behind with $14,320,695. The Colorado Avalanche, Ottawa Senators and New York Islanders round out the remaining three spots with cap space ranging between $9 and $11 million.
Here’s a look at what factors may have influenced individual team decisions made during the deadline by the five franchises that have the highest projected salary cap space in the league.
– Currently holding a Wild Card spot in the Eastern Conference with 79 points and are in a dogfight with the Pittsburgh Penguins (81), Montreal Canadiens (79) and Columbus Blue Jackets (77)
– $16,360,584 in cap space
– Feb. 25 Hurricanes acquired Tomas Jurco (F) from the Florida Panthers for future considerations (a minor-league deal)
– Feb. 25 Hurricanes traded Cliff Pu (F) to the Panthers for future considerations (a minor-league deal)
– Jan. 17 Hurricanes traded Victor Rask (F) to the Minnesota Wild for Nino Niederreiter (F)
Despite being in a heated playoff race, the Hurricanes chose to stand pat and keep player salary costs the same as they were before the deadline. The team took on $1.25 million more in salary a month before the deadline with the Niederreiter acquisition; however, they still have the most salary cap space in the league.
The organization decided not to acquire more talent and increase player salary costs. With average attendance at 28th in the league and at only 74.8 percent of arena capacity, the franchise chose to be a “profit maximizer.”
New Jersey Devils
– 14th in the Eastern Conference and 20 points out of a wild-card spot
– $14,320,695 in cap space
– Feb. 25 Devils traded Keith Kinkaid (G) to the Blue Jackets for a 2022 fifth-round pick
– Feb. 25 Devils traded Marcus Johanssen (F) to the Boston Bruins for a 2019 second-round pick and a 2020 fourth-round pick
– Feb. 23 Devils traded Ben Lovejoy (D) to the Wild for Connor Carrick (D) and a 2019 third-round pick
– Feb. 6 Devils traded Brian Boyle (F) to the Nashville Predators for a 2019 second-round pick
– Jan. 30 Devils traded Michael Kapla (D) to the Wild for Ryan Murphy (D) (a minor-league deal)
The Devils chose to dump salary and acquire draft picks because of the team’s poor on-ice performance. Average attendance this season is 29th in the league and has fallen 9.8 percent compared to last season. The arena attendance is only at 83 percent capacity, so the organization chose to be a “profit maximizer” and are looking at a rebuild.
– Four points out of a wild-card spot in the Western Conference
– $10,845,270 in cap space
– Nathan MacKinnon, Mikko Rantanen and Gabriel Landeskog are one of the most productive and dynamic lines in the league
– Feb. 25 Avalanche acquired Derick Brassard (F) and a 2020 conditional sixth-round pick from the Panthers for a 2020 third-round pick
– Feb. 6 Avalanche traded J.C. Beaudin (F) to the Ottawa Senators for Max McCormick (F) (a minor-league deal)
Colorado’s inactivity at the deadline is a head-scratcher. The organization chose to limit a salary increase to $3 million for the Brassard acquisition despite having almost $11 million in cap space. The MacKinnon line has scored 43.6 percent of the team’s goals to date so secondary scoring should have been a priority to improve their chances of a playoff berth.
Average attendance has increased 11.6 percent over last season, and the arena is at 96.6 percent attendance capacity. The improved financial health of the franchise would have justified an increased investment in acquiring talent. However, the organization decided to be a “profit maximizer” at the deadline, rather than a “win maximizer.” It is possible they felt the team would not go deep into the playoffs, therefore spending additional resources on player salaries was not an appropriate strategy.
– Last place in the Eastern Conference
– $9,917,521 in cap space
– Feb. 25 Senators acquired Brian Gibbons (F) from the Anaheim Ducks for Patrick Sieloff (D)
– Feb. 25 Senators traded Mark Stone (F) and Tobias Lindberg (F) to the Vegas Golden Knights for Erik Brannstrom (D), Oscar Lindberg (F) and a 2020 second-round pick (DAL)
– Feb. 23 Senators traded Ryan Dzingel (F) and 2019 seventh-round pick to the Blue Jackets for Anthony Duclair (F), a 2020 second-round pick and a 2021 second-round pick
– Feb. 22 Senators traded Matt Duchene (F) and Julius Bergman (D) to the Blue Jackets for Vitaly Abramov (F), Jonathan Davidsson (F), a 2019 first-round pick and a 2020 conditional first-round pick
– Feb. 6 Senators acquired J.C. Beaudin (F) from the Avalanche for Max McCormick (F) (a minor-league deal)
No hope of a playoff spot and several unrestricted free agent signings on the horizon forced the organization to dump salary and hoard draft picks. The organization can’t afford high-end talent because average attendance numbers have dropped 4.9 percent to 27th in the league. The current state of the franchise and the bad publicity surrounding it would make it very difficult to attract talented free agents. The Senators organization had no choice but to be a “profit maximizer” at the deadline, electing to trade their best players and accumulate draft picks for a rebuild.
New York Islanders
– Currently 2nd place in the Metropolitan Division, one point behind the Washington Capitals
– $9,563,746 in cap space
– 85 points after 67 games
– Finished the 2017-18 season with 80 points in 82 games, 17 points short of a wild-card spot
– Lowest goals against in the league at 163 GA, 2.43 goals-against average (GAA); Lehner (38 games) 2.19 GAA, .927 save percentage (SV%) / Greiss (35 games) 2.22 GAA, .928 SV%
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Despite being one of the top teams in the Metropolitan Division, the Islanders followed the “profit maximizer” strategy, choosing to keep the team salary expenses fixed despite having almost $9.75 million in cap space that they could have used for talent upgrades.
The only logical explanation for this decision is the poor attendance numbers. The Islanders’ average attendance has been the worst in the league over the last two seasons and is tracking 12.7 percent lower than last season and at a dismal 66.3 percent of arena capacity. Is this a John Tavares “no contract” protest by fans, or are they tired of watching their team play out of two arenas? This team could be a “Cinderella” story in the playoffs.
The strategies used by both the Senators and Devils at the deadline were both expected and necessary. Their poor on-ice performances to date, coupled with their poor attendance numbers, forced them to unload salaries and accumulate draft picks at the deadline. They had no choice but to be “profit maximizers.”
The Hurricanes and Avalanche could be labeled “playoff contenders” and warranted serious consideration by their decision-makers to be “win maximizers.” The organizations could have justified spending their salary cap space on proven talent to improve the teams’ chances of at least a playoff berth. Both teams have enjoyed improved success at the gate, especially the Avalanche. However, both organizations are known to be frugal and more inclined to be “profit maximizers” and not risk being denied a playoff berth, despite investing in more talent.
As for the Islanders, their league standing justified further investment in acquiring more talent. However, this is an excellent example of when a gate-driven business with poor attendance numbers cannot support using $9.5 million in cap space to improve the team’s talent pool. Like the other four teams profiled, the Islanders chose to be “profit maximizers” and maintain their current salary costs.
I am a tenacious and forward-thinking executive with a deep-rooted passion for the sport of hockey, with over three decades of experience as a coach and manager to elite athletes, financial advisors and high net-worth clients.
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