From the onset, an NHL general manager is given a set of resources to work with that includes some combination of cap space, draft picks, and inherited prospects and roster players. A GM’s goal is to maximize the value of those assets within the constraints set forth by the CBA. From a high level, we call this “asset management”.
We’re going to modify a Warren Buffett quote here. The problem is that NHL GMs tend to come from backgrounds of scouting, playing, coaching, or sometimes, institutional politics. Once at the top, GMs from these backgrounds find themselves ill-equipped to handle their new asset managing responsibilities. A skill set like scouting, which equips a GM to say “player x is better than player y” isn’t as useful in the new asset management job. GMs are often left with holes in their understanding of foundational concepts such as scarcity, opportunity cost, and behavioural economics.
We’ve seen this play out time and time again with the Canucks’ front office. Jim the scout would likely think “Tyler Myers has all the attributes we’re looking for. He’s big, strong, and can add an offensive component to our defence. We should sign him.” There is likely no Jim the asset manager that replies, “Hang on, what’s the cost of acquiring Myers? Is this the best use of our cap space relative to alternatives? Why are we willing to acquire him at a price that’s chased all of the other bidders from the table?”
A mistake like Tyler Myers is plain and laid bare for us to see, but Jim Benning’s errors of omission (things he didn’t do) are almost invisible. We can’t see the forgone draft picks, the roster players retained, or the prospects not acquired that have likely been an overhang through his regime. These costs are very real, and form the bedrock of the key concept likely missing from Benning’s mental toolkit: opportunity cost. It’s economics 101 — an opportunity cost is an opportunity lost.
For example, the cost of signing Tanner Pearson was not only $3.25 million in cap space, but also the second-round pick Pearson could have likely fetched at the deadline. Jim the scout probably sees a leader with a host of offensive tools (we’ll ignore that Pearson is near replacement-level), while Jim the asset manager sees a skating second-round pick. It’s worse when thought of this way: Benning was a de facto deadline buyer by forgoing the draft pick he could have acquired for Pearson.
This is the problem with Jim Benning. He seems to chase players his intuition deems “good” (intuition that is deserving of significant skepticism — see Sham Sharron or Jay Beagle) without giving pause to ask how it fits the bigger picture. Of course, there’s always a price to pay, and when Benning has to think about that price, he seems to do one of two things 1) he just bids higher than the market or 2) he relies heavily on his own intuitive definition of a “fair price”.
We saw this intuition on display recently. A key responsibility of an asset manager is to consider how asset values diminish over time, something amateur scouting departments don’t have to do. In an appearance on Sportsnet 650, Benning said that contending teams tend to have players primarily between the ages of 24-34 (a hilarious answer – as Sam from the Broadscast pointed out on Twitter, the majority of all NHL players are between 24-34). Benning was going the intuition route, and nobody’s (except Petbugs’) intuition can possibly be developed to incorporate the ageing trends of the thousands of players in the NHL. A model is clearly better here, and what does the model say?
— Andrew Harris (@andrewharris_97) April 9, 2021
The result of this disjointed process is one of the least efficient teams of the salary cap era. It’s a team that’s lost asset value in Tanner Pearson, Dan Hamhuis, Troy Stecher, Chris Tanev, Ryan Miller, Shawn Matthias, and Frank Corrado. It’s a team that’s avoided alternative uses of cap space, and hasn’t traded for a draft pick in the top 90 since 2016.
That’s the problem with Jim Benning’s tenure as Canucks GM. We’ve got Jim the scout, not Jim the asset manager.