Coyotes will be near NHL salary cap floor in 2018-19
GLENDALE, Ariz. – Coyotes general manager John Chayka will likely add a wing to the 2018-19 NHL roster this summer. It could come when the league’s free agency period begins on July 1; it could come via trade if the free agents who are willing and available to sign with Arizona do not fit the organization’s profile.
However that wing is acquired, he will have to fit within a tight budget. The Coyotes will not be able to spend anywhere near the recently announced $79.5 million salary cap. They will be closer to the cap floor of $58.8 million. That fact should not come as a revelation.
When Andrew Barroway took over as the sole owner of the franchise last summer, Chayka made it clear that the organization would run lean and efficient while the team stockpiled its system and developed its young core. The Coyotes are not at a point where they have the funds or the will to spend more. They hope to get there soon.
“I’ve built businesses before and businesses have been funded off of revenue since the beginning of time,” Chayka said. “It’s a chicken-and-egg type of discussion. Do we win to spend or spend to win? Our view of it is we’ve got a lot of young players that we’re still developing and working with. As we win and generate revenue, there’s more appetite to continue to invest as we hopefully move into a new building in the near future and keep going down that road.”
It’s no secret the Coyotes are searching for a new home in the Valley, but there has been little news on that front for the past year, other than deputy commissioner Bill Daly telling reporters that the team has at least three options. ArizonaSports.com also reported in March that Barroway was looking for investors, both for an infusion of cash, and to better position the franchise for its long-term goals in the Valley, such as building a new arena, building a practice facility, increasing its efforts to build the sport in Arizona and forging more corporate partnerships.
Until there is movement in those areas, the Coyotes will have to keep pace with other teams without the benefit of equal resources.
“We’re a business and like any business, we make our decisions and evaluate them through a certain framework,” Coyotes COO Ahron Cohen said. “For us, that framework is trying to achieve objectives in our short-term and long-term plans by being as efficient as possible to achieve return on investment.
“It really applies to every decision we make, whether it’s players’ salaries or marketing spends. We don’t make decisions by saying we’re a cap team or things like that. We evaluate it based on the expenses we have. With that said, we’re an ascending, exciting young team and we need to be strategic in what we’re doing and thinking about, in terms of our goals. No matter what we spend on players, our core objectives don’t waver in trying to be a competitive hockey team, provide a great fan experience and positively engage with our community.”
Chayka has held firm to the stance that finances will not be an excuse for the Coyotes, despite the obvious restrictions on what he can spend and, in turn, which players he can pursue.
“We haven’t used it as an excuse and it hasn’t been an excuse,” he said. “Every player we’ve pursued, if he haven’t gotten him, it hasn’t been a financial issue. We’ve had the resources to get him or we’ve gotten creative to get that player.”
There were rumors swirling that the Coyotes would have to trade goalie Antti Raanta and/or defensemen Oliver Ekman-Larsson and Niklas Hjalmarsson, but the Coyotes signed Raanta to a three-year extension before the season ended. Additionally, ArizonaSports.com has reported that the Coyotes have reached agreement in principle on contract extensions for Ekman-Larsson (eight years) and Hjalmarsson (two years).
“To date, there haven’t been a lot of things that internally we wanted to do and were incapable of doing,” Chayka said. “To take this next step, we’re going to need to continue to fund and invest, but we’ve got to grow revenues and a big part of growing revenues is winning hockey games. That’s my focus.”
Chayka’s whirlwind summer of 2017 helped the organization reallocate money to key roster spots, creating more flexibility in the process. At the same time, he has to be mindful of the fact that several players on entry-level contracts will require new deals in the next year or two, including defenseman Jakob Chychrun and forwards Brendan Perlini, Christian Dvorak, Clayton Keller, Dylan Strome and Christian Fischer.
“We’ve become a lot more efficient, and that has allowed us to try to pursue some other things,” he said. “Even since last summer, we turned [Jordan] Martinook into [Marcus] Kruger at a lesser number and that is going to allow us to free up some cash to spend a little higher number on the wing than we had currently allocated. Then you have an entry-level contract (possibly Lawson Crouse) that replaces Martinook’s role and that helps, too.
“We’re spending dollars in the right spots and we’ve got a good blend of some experienced veteran players that are making good money and some guys on their ELCs. That’s the mix we’ve got to go with.”
Per CapFriendly.com, the Coyotes are about $1.3 million above the cap floor right now in cap hit, and about $300,000 short of it in actual dollars spent with 20 players under contract.
Chayka said he expects one of the team’s young defenseman (Ilya Lyubushkin, Robbie Russo, Trevor Murphy, Kyle Capobianco) to challenge for the No. 7 defense spot, which would put the Coyotes at least $2 million over the cap floor but leave some flexibility to add a wing, either in free agency or via a trade.
“We’re having some discussions in this free agency period. Some of them are some of the top guys that command big dollars. If there’s a fit there that we can make work, we’re trying to make that work,” he said. “We have some space right now, some flexibility. It doesn’t have to be dollar for dollar. We’re working on some things. They’re not $20 million things, but there is some space there to make some moves.”