Rebuilding Basics: Farming Draft Picks
Maximizing your luck surface area means churning bodies into futures with regularity.
Players as Commodities: Correcting the Market
“My contract sucks.”
Roberto Luongo
Due to the hard-cap, guaranteed contract nature of the NHL, otherwise valuable and productive players can be seen to have little or no value based on either their contract being too large for another team to take on or because their production no longer lives up to their compensation standard. Likewise, a player may be highly sought after with high value but with a prohibitively high contract that doesn’t fit the structure available to teams looking to acquire that player.
A rebuilding team can use their cap space to alleviate cap problems, facilitate complex trades, rehabilitate a value-damaged asset or simply hold a toxic asset until expiration. When utilized properly, these options are precious to a rebuilding organization, as they can contribute to avoiding a bottoming out of the roster and serve as a form of currency bank for future years.
Consider the trade that brought Nick Leddy to Detroit from the Islanders organization. The Redwings, while rebuilding, traded away a 2021 2nd-round draft pick, took on a $5.5 million(“m”) cap hit and retained a salary of $1.3 million, 50% of the contract's annual value of Richard Pánik to facilitate the deal. The Red Wings kept their own 2nd-round pick that year and made two selections in the 1st-round. Over their previous 2 drafts, they had made six selections in the 2nd round. Leddy would play just 55 games for Detroit the following season before being traded in the final year of his contract to St. Louis at the 2022 trade deadline for a highly coveted 2023 2nd-round pick, a prospect and solid NHLer Oskar Sundqvist. Sundqvist, himself in the final year of his deal, is a prime candidate to be traded this season to a team looking to solidify their depth and improve their experience by adding a Stanley Cup Champion to their roster.
In helping to alleviate the Islanders’ cap crunch, the Red Wings offloaded a salary liability in the form of Richard Panik—now playing in Europe—while plugging a transitionary hole in their lineup to aid in the development of their prospects. By treating the trade for Leddy as an investment, Detroit added solid assets by holding onto Leddy and using salary retention to correct his market value. The Red Wings organization essentially banked the value of the 2021 2nd-rounder while arguably improving its value by adding a pick in what is believed to be a very good 2023 draft class. Detroit’s front office spread its luck surface area over the years while adding assets likely to be used to spread that surface area even further into the future.
By designing and implementing a long-term rebuilding plan, your organization can take advantage of opportunities as they present themselves to take on salary liability in the form of a toxic asset, an asset in need of market correction or an asset that can be rehabilitated. All of these acquisitions should yield positive asset returns, barring injury calamity. These positive asset return strategies should be used to maximize resonant wave development. It’s the bulk of a rebuilding strategy.
Buy for a dollar, sell for two.