a·cu·men [ak-yuh-muhn] noun: keen insight; shrewdness

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Tuesday, 20 March 2012

03/21/12 Good Business and Replacing Management

Imagine for a moment that you are the manager of one of the many fine Rexall pharmacies. Now imagine that decisions you made cost your boss, Darryl Katz, millions of dollars. Think you'd still have a job? Enter Oilers management.

Running an NHL team can be a funny business. General Managers move players around like they are commodities instead of people, and fans and media types tend to think of them that way too. And yet, the NHL is a business, and last anybody checked, business is something that Darryl Katz is pretty good at. The same can't always be said for the people running his team.

During that summer of 2007 when all the really good free agents treated the Oilers like the ugly kid at the school dance, Kevin Lowe managed to sign Sheldon Souray to a five year, $27 million contract. Not all of the things that eventually soured the relationship can be blamed on Lowe, but Souray didn't mince words when he said that things started to go south with Lowe right away. It's hard to imagine that Oilers management could have loaned out Souray to Hershey of the AHL last season without Katz's approval, since they paid him $4.5 million to stay away from Edmonton. But the subsequent buyout is costing the Oilers 3 million more dollars, and that's something that the owner can't be terribly pleased about.

Also on the buyout list this season? Our old buddy Robert Nilsson. In April of 2008, Lowe signed Nilsson to a three year, $6 million contract extension. A lot of luck went Nilsson's way in 2007-08, but it came back down to Earth and finally crashed over the next two seasons. His overall work ethic didn't do him any favors either. Buying out the final year of that contract - the most expensive year, unfortunately - cost the Oilers $833,334.

So far we're sitting at $8,333,334 in expenditure for players to not play in Edmonton. Again, all of this can't be blamed on management because there are factors that are outside the control of any management team. However... Eight million, three-hundred thousand dollars! It's not chump change, even when you're a billionaire.

Another glaring example of poor handling of Katz money is the contract of Shawn Horcoff. The captain signed his deal on July 16, 2008 and it was worth a whopping $33 million over six years. Some of the comparable contracts on CapGeek bring Horcoff's deal into perspective. A few of the names on the list include Martin St. Louis, Corey Perry, Ryan Getzlaf, Ryan Kesler and Henrik Zetterberg. The deal was too rich at the time it was signed, but Horcoff's 97 points in 196 games over the last three seasons puts him in a class with a load of cheaper centers. Including - and you're gonna love this one:

That's right. Eric Freakin' Belanger. Belanger's $1,750,000 cap hit is a $3,750,000 savings over Horcoff's. Of course, Belanger's mass has been so great this season that not even scoring can escape, but he's been a fairly consistent scorer over his career and he's done it on the cheap. In fact, most of the comparable points per game scorers over the last three years are loads cheaper than Horcoff.

But it's not just all that. Kevin Lowe built a cap team for 2008-09 that finished in 19th place and out of the playoffs, and Tambellini kept with that proud tradition in 2009-10 when the team finished last. Thanks to all that spending, Patrick LaForge said that the Oilers were losing money. The deal the Oilers have with Northlands is hurting them compared with what other NHL teams have, but so was having one of the league's highest payrolls.

What Am I Getting At?

Whether or not you believe that the current management is doing a good job in terms of managing the team, one thing that can't be denied is that they are doing a bad job of handling their owner's money. Sure, Darryl Katz is a hockey fan, but one has to think that he's a business man first and a hockey fan second. At what point does the gross mismanagement of all this money get the men at the top removed? These are just a few examples of ways that the Oilers are wasting money and resources (cap space).

I'm not normally one to harp on the topic of what a bad management team Lowe and Tambellini are, and they have done a reasonably good job in a few areas. On the other hand, fans should probably be concerned if people aren't being held accountable in regard to money matters. Lowe and Tambellini may be able to reassure Katz when it comes to their hockey moves, but their moves with his money should be plainly understandable to a savvy businessman. It doesn't matter to fans how much of Katz's cash gets wasted, but if he doesn't care it may mean that he's not paying proper attention.

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