Analyzing Liquidity to Cultivate Opportunity in the NHL
How teams can identify unique roster building opportunities
In an ultra-competitive environment such as the NHL, teams are not just assessing themselves; they also need to be looking at their rivals and searching for weaknesses to exploit.
That is why it is essential for teams to focus on doing a comprehensive analysis of all 31 of their counterparts, dissecting the talent of their rosters and projecting salary cap and organizational futures.
Last week I introduced the idea of viewing NHL assets in terms of their liquidity, with the objective of gaining a better understanding of how to analyze and recognize opportunities.
Teams with a lot of liquid assets and salary cap flexibility have positioned themselves to take advantage of rival teams that have a lot of low liquid assets and limited cap flexibility.
This means that highly flexible teams can extract value from the marketplace by:
Being paid in futures to take on distressed contracts
Acquiring talented but expensive players in trade at a discounted price
Signing valuable players that their previous team couldn’t afford to keep
The ‘flat’ salary cap era has created an incredible opportunity for teams with high liquidity, with the salary cap staying at $81,500,000 for the previous two seasons. This has caused cap space to become one of the most sought-after assets as teams struggle to find ways to move inefficient money.
Salary cap information via: Cap Friendly
Teams like the Montreal Canadiens and Arizona Coyotes obtained draft picks and prospects in return for taking on distressed assets.
The Carolina Hurricanes and Seattle Kraken acquired talented players at a fraction of their value because of the cap hits.
With the salary cap only being raised by $1 million next season, cap space will be at a premium once again this upcoming offseason and I predict there will be tremendous opportunity with these salary cap headwinds.