Ship of Fools: Leverage and the Cult of the GM

John Cale ~ Ship of Fools (1974)

Ken Holland ~ Staving Off Existential Torpor

The Oilers’ true season – the offseason – started with a whimper. Confounding hundreds, Ken Holland re-signed Devin Shore in early June to a 2 year deal. Devin Shore was literally the worst forward in the NHL last year by 5×5 Corsi For Percentage (minimum minutes of 350):

Holland not only re-signed him. He gave him a slight raise and an extra year. It was an inauspicious start.

But, that was merely a prelude to the madness to come.

You see, despite stubbing his toe on a variety of cap problems all his own (buying out Sekera, signing Kassian and Turris, retaining on Lucic and not buying out Neal [yet], among others), it’s true that the majority of the Oilers’ cap issues stemmed from the prior Chiarelli administration.

This season, depending on how he would handle his free agents, Holland would be gifted some 22 Million in cap space. His first real opportunity to shape the team around McDavid the easy way.

What Did He Need?

Here’s a depth chart of Holland’s pros as of yesterday morning:

I’ve included the recently extended Ryan Nugent-Hopkins, and noted a few free agents that are likely to return, and a couple of guys that are on the expansion chopping block.

Let me remind you that Oscar Klefbom is unlikely to return and/or may be picked by Seattle in the expansion draft.

So, looking this depth chart over… what would you say is the priority for that 22 million?

For my money the list goes like this, in priority order:

1. A legit tough minute 3C, preferably right handed. Under 3 million.
2. At least 1 legit top 6 winger, preferably a shooter. Hall, or Vrana would be nice. Something from that aisle.
3. A starting goalie.
4. Right Defense: they need someone to play in that 2 spot (it will probably be Larsson), and someone that can slot in for injury and/or Bouchard wobble.
5. Left Defense: with Klef a question mark, they need someone to play top 4 minutes. This is a big role! However, there’s an in-house option: Dmitry Kulikov played very well with Larsson in 2nd pairing minutes down the stretch. He would likely sign a 2 year deal a short $ at this point. Otherwise there are some attractive options via free agency that shouldn’t cost too much $$ or term, and will cost 0 assets.

So, by my estimation, left defense is the 5th priority for Holland this offseason. It’s an important hole, however, with lots of good replacement options that won’t cost assets, or impact the cap long term. The kicker here is the team clearly sees Broberg sliding under Nurse in the near term (next 2-3 years if not sooner).

What’s the Context of a Potential Trade?

For weeks now, the hubbub has been that the Oilers were in talks with the Blackhawks about future Hall of Famer left defenseman Duncan Keith.

Keith is turning 38 in 3 days, has a full No Move Clause (NMC), costs $5,538,462 for two more years (but only a modest 3.6M in real dollars owing) towards the cap and put up some horrendous numbers last year:

CF% = 44.84

GF% = 43.53

xGF% = 41.88

Now, despite being a terrible hockey team, the Blackhawks, as of yesterday morning, we’re sitting at 41/50 contracts and a cap hit of around 76M, with only about 4 million and change in cap.

This is a team that desperately needed cap space, and was sitting on a some dead weight in Keith, who with his NMC held all the cards. That is, Keith could limit Chicago’s trade targets so that he wouldn’t have to go to a location he didn’t prefer (whether for competitive or lifestyle reasons). But it also means that Chicago had to protect him in the upcoming Seattle Expansion Draft (you have to use a spot and protect players with NMCs).

Any Keith trade prior to the expansion draft would solve 4 problems at once: a bad player; cap space; a protection spot; and, a roster spot.

On the cap front, this case mirrors the Leafs’ situation with Patrick Marleau. Having signed Marleau to a 3 year, 6.25M deal with a full NMC in 2017, and having realized Marleau couldn’t perform up to the value of the contract, the Leafs reasoned that their cap dollars could be more efficiently spent elsewhere. And, they paid a heavy price – a 1st Round Pick – to send Marleau to the Hurricanes, who would later buy him out. It should be noted that Marleau did the Leafs a solid by waiving his NMC to allow the trade.

Let’s recap before we get ahead of ourselves:

• the Oilers top priority is not left defense
• the Blackhawks need to shed cap space
• the Blackhawks would love to free up a protection spot for the expansion draft
• Keith controls the Blackhawks range of motion on any trade

In this situation, the Oilers have all the leverage.

Let’s say for the sake of argument that they deem Keith a priority target. As mentioned, this is an asinine position to hold, but let’s roll with it anyway.

According to Holland’s presser yesterday, the Blackhawks approached the him seeking to trade Keith. They were open with him: Keith wanted to play closer to his family, who live in Western Canada. Sounds great. Lovely story. The key question isn’t “wouldn’t it be great for Keith to play close to his family?” The key question is “is Keith better and cheaper than what you can find on the open market with your 22 Million?” —- WHOOPS, I’m sorry. I promised to play along with the premise that Keith is a fine trade target… my apologies, won’t happen again! —- No, the key question is “given the context, under what conditions should the Oilers trade for Keith?”

Keith has requested a trade. To a limited number of teams, as is his right with his NMC. The Blackhawks are tight against the cap. What are the options here?

1. Keith can retire and go live with his family
2. The Blackhawks can follow the Marleau blueprint and spend a pick to have a team take on Keith
3. The Blackhawks can retain salary and/or take on a dead contract to have a team take on Keith
4. The Blackhawks can triangulate a deal with 2 teams, one taking the player, the other facilitating the deal by eating the cap and receiving a pick as payment

What all these scenarios acknowledge is the negotiating position Chicago is in. Their nuts are tied to a chair here. Even on the assumption Keith is a desirable target, the Blackhawks have no leverage to move him without paying the piper.

So, What Happened?

In a comical turn of events, as the day unfolded and details of the deal started being updated, the deal kept looking worse and worse.

It started out being a dramatic overpay: Keith for Caleb Jones and a mid-round pick (3rd or 4th).

Then it got worse: there was no salary retained.

And worse: there was no contract going back.

And worse: the pick was actually a conditional 2nd.

And worse: the Oilers picked up an extra contract (a nothing AHLer) from Chicago, to reduce Bowman’s 50 man list.

This is a laughably bad deal.

Leaving everyone to ask the question: how did Holland fail to recognize and make use of the leverage he had over Bowman. Not only did he lose the trade, he lost it in dramatic fashion, like a guy getting a wedgy and having his shirt pulled over his head while he’s getting fed knuckle sandwiches and saying “thank you, and another please.”

The simple and probably correct answer is this: Holland simply values Duncan Keith that much. In his own words, he got dazzled by the opportunity to nab a guy with 3 Stanley Cup rings and variety of intangibles.

Leverage Complications

But, is that the whole story?

There’s a complicating factor here, that’s nicely put by Jonathan Willis:

The thing that really baffles me in all this is that Ken Holland understands leverage. He used it on Puljujarvi, and he's used it countless times grinding down RFAs over the years, because he knows their other options stink.

He had that leverage on Chicago and failed to use it.

— Jonathan Willis (@JonathanWillis) July 12, 2021

This is true. As I noted in a thread at the time of the last Nurse deal (the expensive bridge that is definitely going to bite the team in the ass as predicted), Holland isn’t afraid of taking RFA players to the limit on negotiations (read the whole thread):

As we game out this Nurse situation, it's interesting to note that during his tenure with the Wings, Holland only once got to the point where an arbitrator awarded a contract.
The Hudler deal, that time Hudler bolted for the K.https://t.co/8qXT8xxlqD

— Romulus' Apotheosis (@RomulusNotNuma) February 6, 2020

So, what’s different?

Asked about his leverage of Bowman, Holland got extremely testy:

This Ken Holland reply about the Keith return is an all-timer: pic.twitter.com/S9YJxvbaeX

— Adam Laskaris (@adam_la2karis) July 13, 2021

His longer answers are interesting, and expand on the context here for Holland:

Daniel Nugent-Bowman thinks I could just sit on the sidelines and smoke out Stan Bowman. I don’t believe you smoke out people. I think I respect that the other 31 managers are very good at what they do. That’s why they got those jobs. At the end of the day it’s got to be a fair deal. Probably Stan Bowman would like to have gotten more in assets and I probably would have liked to have Duncan at a little less cap number. At the end of the day, the solution was what you heard today

Stan made it clear that if he wanted us to eat salary that we’d have to up the assets. Your feeling is that there’s a limited number of teams to go to and I could squeeze somebody, it’s hard to squeeze people in this league. You’ve got to do deals that work for both teams.

Here’s my theory of how this works and incidentally squares the circle on how Holland can manage to leverage his own free agents, but not other GMs.

Holland is a member in good standing of the Cult of the GM.

What does it mean to be a member of the Cult of the GM? It means that you are negotiating among respected peers. It means that you have to respect anyone else in the position, by right of the position they hold. It means that you need to reach a fair deal, a deal that works for both sides. It means that you don’t squeeze the other guy. It means that you don’t touch the other guys stuff without going through the proper protocol or unwritten rules.

A good insight into the Cult of the GM, like anything else, is the way the Cult responds to exceptions. Cases that deviate from the unwritten rules.

Take, for example, Brian Burke’s livid, and highly personal, response to Kevin Lowe offer sheeting Dustin Penner. Calling it “gutless” and still fuming over it a year later, the episode is enlightening. Lowe had broken the rules: you don’t touch another guy’s stuff. You respect the rights of other teams over their own free agents, and if you do make an offer sheet it ~ absurdly ~ can’t be “inflationary,” i.e., it shouldn’t be more than the rights holding team would be normally willing to pay. It’s a circular argument that serves to maintain the racket that is the power dynamic within the league: GMs controlling their property in near perpetuity.

The exception proves the rule here. The relationship and comity and respect amongst the peers is paramount.

None of this applies when a GM is dealing with a player and his agent. In fact, the opposite is the case. The power dynamic is not that of equals, but of a strict hierarchy, with GMs expected to grind deals and maximize their leverage.

[None of this is to say GMs don’t get fleeced by other GMs, or that GMs fully understand and maximize their leverage over their restricted free agents. It means that the among GMs, within the structure of the Cult, certain social norms pertain. And, GMs, particularly old school dudes like Holland, place a premium on values of mutual respect and abiding by the unwritten rules.]