As the Vancouver Canucks enter what could be a long rebuilding process, one thing to watch is the Canucks’ budget and how it could change in the coming years. If the revenue is down, should the owners cut costs to reduce their financial burden? In a rising cap world, it might not be that simple. Let us discuss.
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The Canucks Budget and Two Reasons Why the Team Should Not Be Afraid to Spend
On the Sekeres & Price show from June 17, Patrick Johnston of Postmedia floated the idea of a budget and that he had heard rumours of the Canucks ownership looking to cut costs due to declining revenue, as the team’s performance has been poor in recent times, and will continue to be for some time. However, the idea of cutting down the budget could be detrimental to the Canucks’ rebuild timeline.
What Does Cost-Cutting Entail In an Organization?
First, cost-cutting involves shedding bad contracts from players and staff. That could include trading away veterans for prospects or draft picks, and on the staff side of things, shedding contracts of people who are no longer working for the organization. The latter part of that is largely out of the organization’s control, as it relies on the people that the team has let go finding a job elsewhere. Take former head coach, Adam Foote, for example. He is reportedly becoming an assistant coach for the Utah Mammoth. That would mean the Canucks would only need to pay the difference in what Foote is earning in his new job with Utah, from his original contract of $1.5 million per season.
Reason 1 To Spend: The Team Needs Experience in the Front Office
Cost-cutting means that new personnel that the team brings in will not cost a lot of money to employ. With a management group of largely inexperienced people at the NHL level, it is needless to say that there will be some money saved there. General manager Ryan Johnson, head coach Manny Malhotra, and Presidents Daniel and Henrik Sedin are all first-timers in their NHL positions. Not to mention, Richard Seeley, the GM of the Abbotsford Canucks and AGM of the Vancouver team, has also never worked at the NHL level. The fortunate thing here is that their resumes are impressive enough that the team could be in good hands.
Even so, the question arises, would a completely inexperienced regime end up struggling without some veteran help? It will be interesting to see if the team hires a more seasoned veteran as an assistant coach or hires an experienced front office member to help out the Sedins and Ryan Johnson.
Reason 2 To Spend: Being a Cap-Floor Team Stops the Team From Rebuilding Effectively
Another part of cost-cutting is the team not spending to the salary cap, but rather, spending just to the salary cap floor (the lowest amount of money a team can spend on players). The lower limit of the cap for the 2026-27 is $76.9 million. As of right now, the Canucks have around $82 million of cap space used, with around $22 million remaining to reach the upper limit. Say the Canucks trade out Jake DeBrusk for a draft pick. His $5.5 million cap hit would be saved, dropping the team to $76.5 million spent, which would be under the cap floor. Re-signing or obtaining a free agent at a cheap deal would get the team above the floor.
If ownership is considering something like this, it is likely that the rebuild will take longer than anticipated. This is because having cap space no longer holds the same value that it used to in an environment where the cap is rising. Conversely, having more assets could actually be more beneficial. One staple of rebuilding teams is taking on bad contracts. The team has not done that, even though they have stated that they have entered a rebuild. It goes back to the cost-cutting part of this discussion. If ownership is looking to lower the budget, then the team will be unable to take on bad contracts and accrue future assets in the process.
What Vancouver ownership needs to realize is that the team will not get better from drafting alone. It requires skillful acquisitions that bring forth future assets. How does one gain those future assets? By having players who are marketable at trade deadlines or before the NHL Draft. By taking on expensive contracts, the Canucks can retain salary on them at future deadlines and fetch maybe a decent draft pick or young players with upside in return. The Canucks should not hesitate to obtain a Brendan Gallagher, a Pierre Engvall, Jesperi Kotkaniemi, or anyone whose contract is hurting a team, because those players would be flippable at the Trade Deadline, if the Canucks retain salary.
If the Canucks are hesitant to spend this offseason, whether by taking on bad contracts or by spending in free agency to acquire players, they will find themselves behind other teams in terms of future assets. Having cap space is not the important thing in a rising-cap world. The important thing is how teams handle money that is the most important. Every team will have cap space, some teams upward of $40 million, but not enough good players to spend money on. That is evident this offseason, because the free agency pool is so slim. Spending to the upper limit will be frowned upon by ownership, but the point is, the Canucks need to emulate what successful rebuilding teams have done.
Canucks Have Spent Too Much In Previous Seasons, But Now They Cannot Spend Too Little
It may be cruel or ironic to say, but despite the criticisms that the Vancouver Canucks have spent to the cap in previous seasons, ultimately not going anywhere in terms of success, the reality is that it would be harmful if the Canucks started being disciplined in spending now. They must take on bad contracts, flip marketable players at trade deadlines, rinse and repeat, until they have the young talent and draft capital available to improve the team. If ownership decides that the team’s spending needs to match team revenue, it will spell bad news for how long fans will need to wait for this rebuild to finish. Combined with rising ticket prices, that spells disaster.
It may sound like a broken record by now, but if the team does not want to have a playoff drought resembling the Buffalo Sabres or Detroit Red Wings, the team needs to spend. Cap space is not scarce, but cash is. Does ownership have the deep pockets needed for this new era of the NHL?
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