Over the 2007 offseason, McPhee signed many talented players including Michael Nylander, Tom Poti, Viktor Kozlov and young Swedish star Nicklas Bäckström, elevating expectations in Washington. In the season's first week, the Capitals jumped to a 3–0 record but went on to lose 15 of the next 18 games (3–14–1), which lead to Hanlon's dismissal. McPhee stated that Hanlon had lost control of the team, so he elected to replace Hanlon with Bruce Boudreau, the head coach of the AHL's Hershey Bears. Immediately after Hanlon's exit, the Capitals won against the high-flying Philadelphia Flyers and Carolina Hurricanes. The team finished 37–17–7 the rest of the way in 2007–2008, notching their first division title since 2000–01. Following his dismissal, Hanlon accepted an offer by the Capitals to act as a scout based in the Washington, D.C. area. On February 14, 2008, it was announced that Hanlon would be the head coach of Finnish SM-Liiga team Jokerit.