Coyotes trade deadline analysis: Money matters

A note to readers: This column may be updated after Coyotes GM Bill Armstrong addresses reporters at 6 p.m. from Mullett Arena.

May 16 can’t get here fast enough. Arizona Coyotes fans need some good news.

While the pivotal Tempe arena vote is not a slam dunk (more on that next week) a series of moves before the NHL’s trade deadline laid bare the franchise’s financial situation and the harsh reality of the on-ice product that fans may be watching for the foreseeable future.

In recent weeks, it became clear that the Coyotes were not taking back substantial salary in any moves that they made before the deadline; a switch from past years when such moves gave GM Bill Armstrong the flexibility to strike the best deals possible. In the end, that reality impacted some of what Armstrong and his staff did.

It impacted the Coyotes’ decision to acquire Shea Weber’s contract and a 2023 fifth-round pick from the Vegas Golden Knights for defenseman Dysin Mayo to help reach the cap floor while payroll can drop below that floor. 

It impacted their decision to acquire Jakub Voráček’s contract and a 2023 sixth-round pick from the Columbus Blue Jackets for minor-league goalie Jon Gillies for the same reasons. 

It may have impacted their trade of defenseman Shayne Gostisbehere to Carolina for a 2026 third-round pick, along with the 2022 second- and seventh-round picks that they received when acquiring him from Philadelphia.

It may have impacted their trade of center Nick Bjugstad and minor-league defenseman Cam Dineen to Edmonton for a 2023 third-round pick and minor-league defenseman Michael Kesselring. 

It may have created their inability to trade players such as Nick Schmaltz.

Money probably impacted the trade of Troy Stecher and Nick Ritchie to Calgary.

And it definitely impacted the long-awaited trade of defenseman Jakob Chychrun, who went to the Ottawa Senators for their 2023 first-round pick (top-five protected), a conditional 2024 second-round pick and a 2026 second-round pick.

“Nowadays with the salary cap, as much as the Coyotes have made out from a flat cap, it also makes it hard to do deals because it’s money in, money out with a lot of teams,” Armstrong said. “To escape with no money taken back was huge for us.”

It should be noted that the deals that were on the table didn’t make sense to the Coyotes based on past deals they made. There were no deals that offered the sort of value that say, Anton Strålman or Andrew Ladd offered.

Armstrong said that not taking money back will allow the Coyotes the flexibility to take on other teams’ troubled contracts this summer, while also possibly adding influential veterans to fill out the roster and shepherd the younger players. What Armstrong didn’t say was still apparent when the dust settled and the Coyotes’ cap situation came into focus.

#Yotes have $28.2M on injured reserve (Weber, Ladd, Little, Voracek, Brown)

They also have $3.6M in dead cap hits (OEL, Kane)

A sum of $31.8M, 42% of their total $75M in total cap hit

— CapFriendly (@CapFriendly) March 2, 2023

Team president Xavier A. Gutierrez has made it clear that the Coyotes intend to run very lean during the rebuild. The Coyotes will almost certainly be playing in 4,600-seat Mullett Arena through the 2025-26 season. While Gutierrez suggested that increased ticket prices would offset the smaller size and perhaps even increase ticket revenue, the Coyotes actions say otherwise. 

Aside from the arena reality, the ancillary revenue streams at Mullett are minimal (marketing, etc.) or non-existent (naming rights, parking, etc.). Many NHL teams are facing a potential loss of revenue via their RSN deals, and the Coyotes are eyeing a major investment in a $2.1 billion entertainment district after spending around $30 million to upgrade Mullett and the team’s practice facility at the Ice Den Scottsdale.

From a business standpoint, it’s understandable that the Coyotes would want to cut costs, but the optics are tough when the team is spending money on new uniforms and fashion lines while payroll looks like it does. The optics are also tough when you are trying to convince Tempe voters to approve a major development on the last major piece of real estate in this landlocked city. 

Hopefully, ownership is not taking a penny-wise, pound-foolish approach. Hopefully, ownership is still allowing Armstrong the financial flexibility in his moves because that gives him the best opportunity to improve the club. Improving the club gives the Coyotes a better chance of winning. Winning is the biggest driver of financial success for any pro team.

In the final analysis, Armstrong crafted the best deals possible under restrictive conditions. While some outlets have suggested that he was seeking three first-round picks more recently for Chychrun, my understanding was always that Armstrong was set on two first-round picks and a second-round pick for Chychrun. He allowed for the flexibility of taking on existing players who had been drafted in those rounds, so long as the Coyotes liked those prospects, but he is a scout by trade so his real desire was clear.

“We wanted draft capital,” he said.

He got one first and two seconds (unless Ottawa does something crazy this spring), and a deal with one of the few teams that didn’t need to send money back. And there is nuance within those picks because the streaking Senators are still outside the brutal Eastern Conference’s playoff picture.

“More important in the deal is an opportunity to get a pick somewhere between 6 & 18,” said Armstrong, who was talking to eight different teams about Chychrun. “Those are hard to get in the draft so that has a lot of value for us. We had a couple of deals where there were two firsts but they were really late firsts. This has the possibility of being a pretty good pick.

“It’s a little risky because you don’t know where they’re going to finish but that’s a chance we’re willing to take.”

If Ottawa misses the playoffs, the Coyotes are guaranteed a top-16 pick in the 2023 NHL Draft. Either way, they will have at least two first-round picks for the second straight season after selecting Logan Cooley and Conor Geekie and Maveric Lamoureux last season.

There have been suggestions that Armstrong overplayed his hand, waited too long, or that he caved on his initial ask, but irresponsible and incomplete reporting is a reality of the media landscape these days. Those are obtuse observations without a granular understanding of the situation. 

Armstrong didn’t really cave if you consider his bottom-line, gotta-have-it view of the deal. And he didn’t overplay his hand or wait too long to find the right deal. The hand that he was holding simply changed when he was no longer able to take logical money back. 

In the end, he still holds the hand with which he is most familiar: a glut of draft picks over the next four drafts, with more likely to come.

There is no guarantee that all of these draft picks will bear fruit. The NHL Draft remains the biggest crapshoot among the four major North American sports because of the illogically low draft age. It also seems unlikely that the Coyotes will execute all of these picks, rather than using some as assets in other deals.

But if there is a happy place for Armstrong, it is the draft. He has spent two decades in scouting and this ownership group allowed him to assemble the most complete scouting staff in franchise history.

“This is my world,” he said. “I’m very comfortable here.”

Top photo of Coyotes GM Bill Armstrong via Getty Images

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