Jets and Flames exodus: Why can’t Canadian teams have nice things?
A Canadian team has not won the Stanley Cup in 30 years, yet the Stanley Cup Champion Las Vegas Golden Knights rostered a team comprised of 67.9% Canadian-born players (4 Manitobans). There is a max exodus of talent in Winnipeg and Calgary, yet Toronto and Montreal remain free-agent destinations. So, what in the tabernac is going on in Canada?
Canadian teams in the NHL are at a nadir. The Leafs haven’t won a Cup since men wore suits to mow the lawn, and Vancouver and Montreal were objectively bad last year. The Oilers have 2 of the best players on the planet yet can’t seem to advance past the second round. “Canada’s Game” is now synonymous with its geese – migrated south for the winter.
There are 2 concurrent and intrinsically linked issues to discuss:
1. Why can’t Canadian teams win the Stanley Cup?
2. Why does it seem like NHL talent wants out of Canada?
Sean McIndoe of The Athletic wrote a brilliant breakdown of the speculative root causes of Canadian impotency as it relates to the Stanley Cup. He touched on economics, culture, markets, luck, and conspiracies. I want to analyze 3 such factors in detail:
Market-size
4 of the 7 Canadian NHL teams have populations, based on Census Metropolitan Area, smaller than nearly every American market. Calgary, Edmonton, Ottawa and Winnipeg are small-market teams and decidedly so.
Smaller markets are subject to bespoke harsh realities. The revenue pie is smaller, so these teams have a smaller standard deviation of error, and therefore higher aversions to risk. When the salary cap was introduced in 2005, it was intended to level the proverbial playing field. While it accomplished its goal (to a degree) on a macro scale, it did not account for ancillary benefits such as endorsements and merchandising.
Large-market teams have a desirability advantage for a variety of reasons—fame, cache, and higher earning power. Or, in the case of the southern teams – nice weather and a robust nightlife.
To their credit, the Winnipeg Jets have done an admirable job holding onto their ‘core’. Connor, Ehlers, Schefiele, Morrissey and Wheeler all chose to stay in Winnipeg past their rookie contracts. Some might argue too long, but regardless, the Jets have largely avoided the situation they find themselves in now.
I won’t pretend to understand Calgary’s woes, just to know they appear outwardly similar to Winnipeg’s. It is fair to say the first domino fell when Matthew Tkachuk declared his disinterest in signing long-term in Calgary. A reality all too familiar for small-market teams.
Taxes
Many argue that playing in Canada represents a punitive tax disadvantage. This is just not true.
Players in Canada can set up a Retirement Compensation Agreement and limit their tax liability to a flat 20%. With sound tax advisors, an NHL player can actually pay the same or less tax in Canada than he will in Florida or Vegas.
In addition, every NHL player is paid in American dollars, including those playing in the seven Canadian cities. So Canadian players, who live year-round in Canada, make up the tax gap by being paid in US funds and playing games on the road in US markets.
As a result, there is no evidence, anecdotal or otherwise, that tax burden plays a significant role in a player’s decision about where to play.
Gary Bettman
It seems petulant to criticize the man who was at the helm of power during the relocation of our beloved Winnipeg Jets – but here goes. It is no secret that Bettman’s primary motivation is to grow the NHL market in the US. The fact that desert hockey and the Coyotes are still a ‘thing’ is Exhibit A. Economically, however, US market thirst is a sound strategy – go where the money is.
Competitively though, it leaves Canadian teams (again, most of them small market) at a relative disadvantage with a commissioner who seems at best agnostic to Canadian markets.
The timing of Bettman’s tenure as commissioner is fertile ground for conspiracies. The year he took over as NHL commissioner in 1993, was also the last time a Canadian team won the Cup. It is galaxy brained to think Bettman is smart enough to manipulate 32 teams, over 2600 games, and 70 plus refs/linesman per season to ensure Canadian futility – but some subscribe to that theory.
I disagree. I think the NHL has just focused on procuring new fans, rather than satiating their existing ones. More importantly, there seems to be a dearth of creative thinking that would benefit Canadian markets. Super-max contracts that don’t count against the cap, increased revenue sharing, and eliminating cap padding come playoff time would serve to level competitive disadvantages.
Let’s recap with a test case. The Florida Panthers’ resides in Sunrise, Florida – a population of around 100,000. Their average fan base last year was 16,682 as compared to Winnipeg’s 14, 045. Obviously, the Panthers draw crowds from densely populated surrounding areas.
All factors remaining equal, a player has a choice to play in the fishbowl that is Winnipeg, or play in relative anonymity, wear flip-flops to work, and golf year-round. We know the decision most players make.
This is not to say things are hopeless. It is quite reasonable to say that the problems facing the Jets and the Flames are not geographical, but cultural. Both teams faced aging stars on declining teams who want to avoid playing with organizations in a ‘productive struggle’. There is sound reasoning to the “if you build it, they will come” philosophy – but the Jets and Flames just haven’t built it.
Overall though, the odds of a Canadian team not winning a Stanley Cup in 30 years is under 1%. That is a statistical anomaly too significant to ascribe solely to randomness. The truth is, the majority of Canadian teams are at a small-market disadvantage, with a commissioner seemingly unconcerned with Canadian angst.
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This is no reason to take a defeatist attitude or to believe winning a Cup in Winnipeg is impossible. It just means the Jets have to do things smarter and better to mitigate intrinsic obstacles. The Jets can win a Stanley Cup, they just have to reevaluate what it means to be a Canadian team, eh.