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Florida’s Moves Imply Financial Problems

When Cliff Viner and Stu Siegel bought the Florida Panthers outright from Alan Cohen (where they had been minority partners), I cautioned that this may be a desperate financial move by people who are unfit financially to own an NHL team.  I was criticized by Stu Hackel of the New York Times Slapshot blog for misreading the situation, but it is looking as though I am correct. 

The first major change the new owners are bringing into Florida is a slashed payroll and that is consistent with them not having the money to properly finance their team, especially as it is second to the Phoenix Coyotes in recent financial losses.

In the build-up to the NHL Entry draft, Florida managed to sell some of their higher priced players for extra first round draft picks. Florida traded Nathan Horton and his contract that owes him $14 million over the next three years (with a $4 million a year salary cap hit) to the Boston Bruins along with Gregory Campbell in exchange for Dennis Wideman (who is owed $8.5 million in the two years remaining on his deal) and a first round draft pick (Florida picked Nick Bjugstad).  This move reduced Florida’s upcoming salary commitments.

Florida then moved Keith Ballard (who is owed $4.2 million a year for the next five years) and Victor Oreskovich to the Vancouver Canucks for Steve Bernier, Michael Grabner and the Canucks first round pick (Florida selected Quinton Howden).  This was another move to reduce their salary commitments.

As a result of these moves, Florida only has three players signed beyond the end of next season.  They are David Booth, Rostislav Olesz and Stephen Weiss signed beyond the end of the 2011/12 season.  Florida is slashing their payroll and preparing to keep it low in the immediate future.

Twenty-four teams have announced at least one free agent signing so far and Florida has not had any.  Florida is not using their new salary cap space to improve their roster.  They seem to not be able to afford such luxuries. 

The biggest question with the Florida Panthers future is goaltender Tomas Vokoun, who is an unrestricted free agent next summer.  Likely he will leave and that will significantly weaken the team.  At that point, there will likely be little left to cheer for.

Florida may claim that they are rebuilding again.  Did you realize they had finished their last rebuild, which has apparently been underway for the last decade or so?  It was 2000 the last time the time made the playoffs and 1996 the last time (and only time) they actually won a series.  Can this struggling market withstand a considerably weaker team with a slashed payroll?

Before you imagine this payroll slashing as some grand plan to tank the league and acquire top draft picks to win eventually, consider that the three biggest payroll slashings since the first year post-lockout (many big market teams slashed payroll due to a new salary cap in the first year) were by the Phoenix Coyotes last year, the Nashville Predators when they were barely rescued by a local group including the ill-fated Boots Del Biaggio and the Columbus Blue Jackets when Scott Howson took over as general manager and shed the salaries of Sergei Fedorov and Adam Foote (among others).  These teams made their moves out of financial distress and have had no path toward the top of the NHL as a result.  I think the Florida Panthers are no different.

It is tough to be an NHL general manager.  It is even tougher when you have little financial backing behind you.  Dale Tallon is taking over as Florida Panther GM and being forced to slash payroll, as a result his team probably will not be able to compete in the NHL.  Unless Tallon pulls off a miracle, look for his run in Florida to yield unpleasant results on the ice and possibly be unpleasantly short for Tallon.

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I disagree.  Tallon is an astute judge of hockey talent and his players love him (i.e. funeral episode in Northern Ontario when the players rented a bus to attend in mid-season at their own personal expense).  He is the architect of the current Stanley Cup Champions and know that the first step is developing from youth and bringing them all along together.  I’m not a Florida fan, but just watch.

Posted by Matty55 on 07/02/10 at 02:29 PM ET


I was criticized by Stu Hackel of the New York Times Slapshot blog for misreading the situation, but it is looking as though I am correct. 

No, you were criticised for claiming that Alan Cohen was cutting and running (which he hasn’t, still owning 25% of the team), and for drawing parallels between the new owners and Jerry Moyes in Phoenix. Hackel’s counter-argument was that the new owners are more interested in hockey than you gave credit for, and that Florida’s woes are the result of long-term incompetence.

As for their moves this offseason, it really isn’t fair to criticise. Horton and Ballard may be good players, but both desperately needed a change of scenery. Both deals saw Florida receive fair value (and take back some salary - compare with the moves Nashville and CBJ made). They are building a quite exciting young team, and doing so very cleverly by getting the defensive side in place first (Markstrom in net; Kulikov, Gudbranson and Petrovic on the blueline).

Now, I’m sure that Florida’s financial situation is not all hunky-dory, but neither is your doom and gloom justified. They could have attempted to move Vokoun, McCabe and Stillman (all UFAs next year) to save some money, then acquire some ‘dead cap’ players to hit the salary floor (e.g. Brind’Amour from Carolina - his retirement means that his cap hit stays though his salary does not, afaik). And the last two teams to drop salary before the lockout in a deliberate attempt to save money? Pittsburgh and Washington… but obviously these examples aren’t at all relevant, because they contradict your argument.

Posted by fcjbencard on 07/02/10 at 02:47 PM ET

PuckStopsHere's avatar


If I was criticized for saying that Florida’s new owners are not hockey people, then I was criticized for something I never said.  They are over their heads financially as NHL owners and would not be there if it were not for being trapped in their current cirucumstances.  That is my claim all along.

Now the rest of your argument that Florida has not traded all their players (yet).  By trade deadline I bet at least two of the three of Vokoun, Stillman and McCabe are gone to acquire “dead cap” players, is basically saying that because their shedding payroll, while being the biggest such move in the league, is not of ridiculous proportions so it is OK.  Florida needs to have players who actually play hockey to fill out their roster.  They signed Chris Higgins to a one year deal worth $1.6 million since I wrote this article.  That move is consistent with payroll shedding given that they need a full roster and they need to hit the salary floor.

When it comes to shedding payroll and starting to win in a few years we have a selective memory.  We tend to remember the one or two teams that succeeded and neglect the ones that didn’t (in addition to Columbus, Phoenix, Nashville we have St Louis moving Pronger, various incarnations of the NY Islanders etc).  People are far to ready to focus on the one or two success stories and neglect the many failures.  The only thing certain about a team that sheds payroll and falls to the bottom of the standings is that they will be a bad team in the short term.  A rebound of any sort is far from a given.  Its an unlikely occurance.

Posted by PuckStopsHere on 07/02/10 at 03:06 PM ET

Nathan's avatar

I have to agree with Matty55 in the sense that I think your writing this post is premature. Though I certainly understand your arguments and I have to admit, it’s hard to disagree with you. I just think that you do have to give the “new” ownership and GM at least a couple of off-seasons to gauge what their intentions are.

I think of it this way… even if the owners had tons of financial resources, the free agent crop this year is very weak. I’m sure they saw when their upstate rivals tried to go from the bottom to top almost solely via mediocre free agents a couple seasons ago. And we all know how horribly that turned out, and how far it set that franchise back.

I don’t think there’s any doubt South Beach is a terrible hockey market, and that the owners aren’t exactly financial titans that can swallow serious losses year after year. But that doesn’t mean that they don’t have a long-term hockey plan to rebuild this team properly.

Posted by Nathan from the scoresheet! on 07/02/10 at 03:22 PM ET

danabob's avatar

Just because Tallon shed some salary does not mean the owners are in bad financial shape. Did the team go anywhere with these guys last year? Tallon is doing the same thing he did in Chicago. Amass a large number of young guys about the same age. Add a Hossa to the mix and Voila. Nether Ballard nor Horton are wearing cup rings. What’s the next story? Florida is broke, move them to Hamilton.

Posted by danabob on 07/03/10 at 08:41 PM ET

PuckStopsHere's avatar

Tallon is doing the same thing he did in Chicago. Amass a large number of young guys about the same age.

This is false.  When Tallon took over Chicago for the 2005/06 season (the first one post-lockout), he added two big name free agents in Nikolai Khabibulin and Adrian Aucoin to the team.  These players were older than a significant portion of the Blackhawk players at the time.

Due to the salary cap and rollback in salaries that came with the lockout, Chicago’s payroll stayed about the same that year as it had been the year before the lockout (which meant they rose significantly in their standing in the league in payroll as many teams dropped significantly due to the new rules).

It is a different circumstance in Florida, than it was in Chicago.  Florida is in a weaker financial position and Tallon is responding accordingly.

Posted by PuckStopsHere on 07/03/10 at 09:16 PM ET

danabob's avatar

Do you really think Dale Tallon would be desperate enough for a job to take a position on a sinking ship. Yes, the Panthers may not have as much to spend in the short term. No matter how much money my owner had I would have made the same moves. The currant cast in Florida wasn’t getting it done. Why not ship out players who you feel aren’t earning their paycheck for younger assets. Khabibulin and Aucoin were worth their inflated paychecks back in the day as a stop gap until the kids grew up. It worked. I’m not anointing Tallon as the next Scotty Bowman, but why would you say they are on bad financial footing if they unloaded what Tallon thought was dead wood.  There are plenty of teams that have nothing in free agency. Are they broke too?

Posted by danabob on 07/04/10 at 12:53 AM ET

PuckStopsHere's avatar

When there are only 30 GM jobs, you have to take what you can get.  Dale Tallon worked for years under Bill wirtz in Chicago (both as a GM and before he became a GM), he has a history of working in situations that are not very good.

There are plenty of teams that have nothing in free agency. Are they broke too?

We have to look at these teams on a case by case basis.  If the team has new ownership with questionable finances, offloaded some big contracts just before the draft to reduce a payroll that is already well below the cap and has not been much of a player in free agency, the team probably is in a poor financial situation.  Which team(s) fit that description?

Posted by PuckStopsHere on 07/04/10 at 11:26 AM ET

danabob's avatar

You are right. This has to be taken on a team by team basis. Florida now finds themselves having to spend like a small market franchise. They have all summer to get to the salary cap floor. I am not all that familiar with their prospects, but they may have some young guys that are ready. There are plenty of players that the Panthers can “roll the dice on” left in free agency. Neither Ballard nor Horton have been close to winning a cup. If they tell Tallon “I would rather be somewhere else with a better chance at winning a cup” Why wouldn’t you unload them. This franchise hasn’t made the playoffs in a lot of years. Obviously, the old business model didn’t work. Some teams can afford to make salary mistakes. Florida can’t anymore. It doesn’t mean they are broke. They have to be more careful on what they spend, make sure they are getting value for there buck.  I’m a Sabres fan. As much as I would like them to sign some more players they have to watch what they spend.

Posted by danabob on 07/04/10 at 12:09 PM ET

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imageThe Puck Stops Here was founded during the 2004/05 lockout as a place to rant about hockey. The original site contains over 1000 posts, some of which were also published on FoxSports.com.

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