Thursday, March 05, 2009

The recession has hit the NHL

Trade deadline day has to be just about the biggest event in the NHL calendar besides maybe the Stanley Cup finals. It’s bigger than the Amateur Draft or the start of free agency because moves made on trade deadline day impact on teams immediately as opposed to several months later.

The number of transactions and the number of players moved yesterday are similar to previous years. It’s just the nature of the transactions that were different. From the Maple Leafs' perspective, they couldn’t have picked a worse time to begin rebuilding. A rebuild requires a stockpile of draft picks and young prospects which today are the most coveted commodities in the NHL.

The salary cap has neutralized the financial clout of the Toronto Maple Leafs and New York Rangers. The Rangers would have signed Mats Sundin if not for the salary cap. Instead they had to settle for Nik Antropov. As for the Leafs, they would never have chosen a 3-5 year rebuilding program when they could just restock their lineup with free agents. And if you make a few mistakes well then just sign some more free agents. Without the cap, hockey would look like baseball where the Yankees, Dodger and Red Sox show no restraint even during these tough economic times. So instead we saw the Leafs essentially “purchase” a fourth round pick by taking on $600,000 in salaries from cash-strapped Tampa Bay for injured players. The guys are so banged up they probably will come to town in ambulances.

Yesterday there were 22 transactions but included very few big names. No one is interested in taking on additional salary and no one really wants to part with cheap talent. So it was amazing there were even 22 transactions. A total of 21 draft picks changed hands but only 1 was in the first round. Last year at the deadline there were 4 first round picks moved. The year before there about 10 moved in the days leading to the trade deadline. A number of Cup contenders decided against making moves (Detroit, Washington, Vancouver, Montreal). There were a large group of big stars that were clearly on the market but no buyers. With so many teams in a playoff position still it was thought to be a sellers’ market but it turned out to be neither. There was a lot of window shopping but you couldn’t give away expensive assets.

A number of teams with serious financial problems were able to move some salaries through either the waiver wire or trades but they wish they could have done more. I expect that going into next season, there may not be any teams at the salary cap and many down near the salary floor. So it is not likely to be a good year for free agents. If Brian Burke was right about the market, don’t be surprised if Dominic Moore winds up signing with the Leafs this summer.

We have not seen an economic downturn like this in our lifetime. It should be interesting on how this plays out for sports leagues and franchises in the next two years.