New Jersey Devils: An Asset Management Analysis Of Possible Trade Deadline Moves

Most of us understand the need to manage the assets in an investment portfolio.  Are assets in a professional sports organization all that different? One might contend they are not. Given that perspective, how might one apply asset management concepts to Monday’s NHL trade deadline.

Here is a quick look at the New Jersey Devils from an asset management perspective, and some potential options to consider for this weekend based on that frame of reference.

UFA’s To Be

Any “UFA to be” is a player a club risks getting nothing in return. That is not good business, it is not unlike allowing a put or call option with some financial value to expire in the financial world. Why would you do that?

Tonight’s visit by the Minnesota Wild brings to the front of our minds the Zach Parise fiasco of many moons ago. This year’s version of Mr. Parise, albeit on a far smaller scale, is John Moore. Unsigned beyond this year, my philosophy is that he should be either signed or traded by Monday.

The Chicago native could probably fetch a third-round pick, and that would be a great asset for New Jersey to acquire. Would the Devils miss him?  Of course they would. He’s a good defender and a beast in overtime. But the Devils are still in a long-term building process, despite the success of this year. I fervently believe moving Moore for a semi-high draft pick or prospect would be a good business move.

In some ways, the management of players and assets in a portfolio are somewhat similar.

Buy Low, Sell High

Setting health concerns aside, a player like Brian Gibbons meets the Harvard Business Review definition of “selling high”.  He’s having a career year and also happens to be an unrestricted free agent who is not young (from a hockey perspective) at the age of 29. As well as Gibbons has played this year, there is a considerable risk he is at a plateau, and if you can get something useful for his rights, now is the time to act.

Again, like John Moore, I’m not suggesting Brian is not a valuable player for the Devils. He is. But this could be a chance to get above market value for Gibbons. If you can do that, there is a fiduciary obligation to the long-term good of the organization to consider making that move.

Cap Space

This is an asset which is often overlooked in the context of trade discussions. The Devils have more or less $7M in free cap space for the 2017-18 season. If a serious Cup contender like Tampa, Nashville or Boston need to dump a contract to bring in a missing piece for the playoffs, the Devils should get in the discussion to accept that contract. A willingness to do just that could bring in another draft pick or prospect. And before you say “who cares”, may I say one never knows who will pan out (e.g. Jesper Bratt).

Building up the developmental pool with limited down side is almost always a good idea. And, like a “mind” in the old United Negro College Fund commercials, “excess cap room” is a terrible thing to waste.

Buy Low, Sell High – Part Deux

There are plenty of players in the NHL who are still very young, yet having fairly disappointing years. Some examples are Oscar Klefbom, Max Domi, Andre Burakovsky or even Jimmy Vesey of the beloved New York Rangers come to mind. If I was a GM owning the rights to anyone in the preceding sentence, I myself wouldn’t consider, even for a second, giving up on them at this point in their careers. But sometimes it happens.

Remember, guys like Jonathan Drouin and Matt Duchene were traded within the past year. So, if it’s possible to sink your teeth into one of these high-potential type of guys, in my view it’s worth the risk.

Next: Should The Devils Trade John Moore?

Summary

Personally, I’m not sure any of these moves will actually happen. I kind of see Ray Shero taking a “let’s see what happens this year” sort of approach with this crew given their surprising performance. In many ways, that’s only fair. It’s also very important, in addition, to be exceptionally mindful of Taylor Hall’s fervent desire to make a playoff appearance this season. After all, he’s the  AAPL and GOOGL of the Devils’ portfolio and his wishes need to be lent an extremely attentive ear at all times.

The ideas presented above are only meant to be some options to consider from the asset management side of the house. I don’t think you can argue against many of them, but I still don’t think they will come to fruition.

It will be interesting to see what the Devils do between now and Monday.