By Dom Luszczyszyn The Athletic
Excerpts from his article “NHL contract efficiency rankings: Grading every team in the league” for The Athletic. To read more, visit the The Athletic.
The best and worst contracts are usually the most interesting (especially the worst), but those are teasers for a grander scale project where the league is graded on a whole according to their contract efficiency. It follows the same criteria as the best and worst contracts: How much surplus value will the deal provide and what’s the likelihood of providing positive value? That likelihood is important as nothing is a guarantee in this sport.
Probability is not destiny, but it is a good way of showing which teams are likely to get the most value out of the deals currently on the books, and which are not. The contracts being graded include every healthy, non-ELC skater who carries a projected value from the model. Also, any dead money (buyouts, retention, recapture) on the books counts too.
This exercise also doesn’t factor in unused cap space as part of the equation as there’s no telling exactly how that space will be used (or misused). This is all about the value currently on the books (as of July 29); spending to the salary cap isn’t a bad thing if a team is good.
Age matters a lot here (all future projections are adjusted), as does term length as surplus value can compound over longer deals, for better or worse. Players peak between the ages of 22 and 26, so older players don’t earn a lot of grace here, with some exceptions.
Each contract was graded based on where a player’s combined surplus value and positive value probability fall on the following percentile scale:
The goal here is to grade contracts empirically with the same context being applied to each player across the league: How much value does each player bring to the table and how likely will they provide positive value over the life of the contract.
The way that’s measured comes from comparing a player’s GSVA and the expected salary that comes with it to a player’s current contract. Surplus value compares what they make with what the model believes they should be making, while positive value probability measures the certainty that a player will perform above his cap hit. Every contract grade is based on those two factors (with twice as much weight being placed on surplus value) looking outward. What players have already done holds no merit, this is about the future value of the deal. Contract clauses and bonus structure are important, but not considered in this assessment. Players on LTIR were not considered.
Relevant Links
The value of a win on the open market
Here’s how the Vancouver Canucks stack up in regard to the efficiency of all the contracts they currently have signed.
14. Vancouver Canucks
Last season: 23rd
For eons, the Vancouver Canucks have floundered near the bottom of any list that spoke to managerial competence. Contract efficiency? Straight to the bottom. Front-office confidence? Bottom.
So this is a pleasant twist, and a partially unexpected one given the team still has two albatrosses on the books in the form of Tyler Myers and Oliver Ekman-Larsson. Yes, those two deals remain quite bad — though Ekman-Larsson did have a decent return to form in his first year as a Canuck. Not enough to make his deal not one of the worst in the league. But surprisingly okay.
Across the board, there’s a lot more to like with the rest of the team. J.T. Miller had a fantastic year and Conor Garland remained steady. The Ilya Mikheyev signing was decent, too.
The biggest difference, though, was adding Elias Pettersson and Quinn Hughes to the books. Those are the team’s two cornerstone pieces that were unsigned this time last year. They bring a lot of surplus value and positive value probability to the table here.
Source: The Athletic
