The Entry-Level Contract Quandary: Examining NHL History

In the movie Moneyball, there’s an entertaining scene in which Brad Pitt’s protagonist character — Oakland Athletics General Manager Billy Beane — sits down with his scouting staff to discuss their recent player evaluations.

As a small market team that had just lost three of its best players to large market teams, Beane had grown weary of being used as a feeder system to the New York Yankees and Boston Red Sox of the MLB world.  By challenging his staff to unearth some new philosophy or initiative that would allow for them to compete and win while operating on a shoestring budget, Beane essentially asks them to go against the grain and alter their thought process.

According to conventional wisdom, a good prospect is one whose potential is substantiated by performance. Under these circumstances, the likelihood that a player of such a nature will have garnered the attention of others is high. Consequently, for an organization like Oakland, these kinds of players may be attractive but they’re also likely to be expensive and highly sought after. No, to take advantage of market inefficiencies, the Athletics would have to pursue players with unfulfilled potential or players whose measured performance outweighs their potential.

While there is much to be said about actually having ‘talent’, Beane had one line in this scene (and I’m paraphrasing) that correctly asserted “that no scout can ever predict with complete accuracy which player or players will assuredly go on to have future success as the highest level.”

Having once been a highly regarded ‘toolsy’ prospect that was mentioned in the same breath as Darryl Strawberry, Beane himself personified the kind of player who was held in high regard because scouts drooled over his raw ability.

Despite NHL teams working with the parameters of its self-imposed salary cap, the context of Beane’s conversation with his scouting staff resonated with me because one of the topics du jour in the NHL involves the consideration of future success and determining whether it’s prudent to put prospects straight into the NHL during their draft year. With seven of the top eight picks – Ryan Nugent-Hopkins (Edmonton Oilers), Gabriel Landeskog (Colorado Avalanche), Adam Larsson (New Jersey Devils), Ryan Strome (New York Islanders), Mark Scheifele (Winnipeg Jets), Sean Couturier (Philadelphia Flyers) and Mika Zibanejad (Ottawa Senators) — from the 2011 NHL Entry Draft looking like they’ll stick in the NHL to start the season it’s something I wanted to take a closer look at. (Note: This morning the Blackhawks have announced the signing of Brandon Saad. The 43^rd overall pick from the 2011 Draft will get a chance to play on Chicago’s top line.)

My intrigue in this matter led me to develop a number of spreadsheets that tracked the history active NHLers and how they have performed through the duration of their entry-level contract – contrasting prospects based on their age when they enter the league; as well as contrasting prospects who enter the league in their draft year versus those who wait for a season or two.

For the purposes of the research, I wanted to comparables for Zibanejad. In consequence, I filtered out defencemen and those who failed to surpass their 9-game audition window before the first year on their ELC kicks in.

Here is what I found…

An 18-year old’s first ELC season:

An 18-year old’s second ELC season:

An 18-year old’s third ELC season:

Looking at these numbers, it’s interesting to note that irrespective of where a player was selected in the draft, there isn’t that big of gap in the production levels of an 18-year old that’s in the first year of his deal. No, that gap historically doesn’t manifest until the second and third years of their deal.

Is this consistent with players who enter the league as 19 and 20 year olds?

A 19-year old’s first ELC season:

A 19-year old’s second ELC season:

A 19-year old’s third ELC season:

A 20-year old’s first ELC season:

A 20-year old’s second ELC season:

A 20 year old’s third ELC season:

Across these three age groups, the data remains consistent. Any large discrepancy between a player’s point production historically doesn’t appear until the second or third seasons. Interestingly, according to the data 18-year olds on their ELCs historically have the highest scoring average but the lowest scoring averages for top five and top 10 draft picks. Not all prospects that play in their draft years spend the duration of the season as an 18-year old prospect. Patrick Kane for example has a birth date in mid-November and in consequence, he spent the bulk of his rookie season playing as a 19-year old. The website Quanthockey.com helps categorize and track the production of NHL players based on their age levels.

Based on the numbers, here’s how players who play in their draft year typically fare.

In year two:

In year three:

Now here is a set of charts that exemplifies how a prospect that doesn’t play in the NHL for one season following their draft year.

In the first year of their ELC:

In the second year:

In the third year:

Based off of these numbers, it’s interesting to note that historically, players who play in their draft year historically perform better in year two than players who are held back by one season. In year three however, the contrast isn’t as conclusive. While the average production of players who play in their draft year and the average for top five picks who play in their draft year is higher, the average production of top ten selections and picks six through ten that are held back by one season tend to be higher.

So if this contrast doesn’t provide compelling evidence to suggest that players are best served developing at the NHL level, the question needs to be asked, “If top ten draft picks historically produce more as 19 and 20 year olds than they do as 18 year olds, why do so many NHL teams fast-track their draft selections and get less value from their ELCs than they could?”

The obvious answer is that each player is treated on a case-by-case example. Different teams have different needs and if an organization truly believes that if a rookie can help them compete for a playoff spot or more, they’re within their right to decide what’s in their best interest.

Not all teams however are on that level. As Gabe Desjardins wrote yesterday on the Arctic Ice Hockey Blog, “teams don’t have a big window before their young stars get expensive.  Burning a year of an entry-level contract so that an 18-year-old can play on a bad team is not a good idea if your strategy is to have that 18-year-old still be on your team when he’s 24 and putting the puck in the net.”

While Gabe was referring to the fact that an organization like Winnipeg simply doesn’t have the luxury of being in a market like Toronto or a Detroit wherein it only has to work within the confines of the NHL’s self-imposed cap ceiling, Ottawa has a different sort of problem.

As an organization that is in the midst of a rebuild, the ultimate goal should be to cultivate and develop young talent until it becomes a championship-calibre core – at which point, the objective changes to keeping this core together for as long as it’s fiscally possible. Moreover to his point, Gabe followed up his point about not rushing players by using this analogy:

Let’s go back to the 2009 offseason.  Dale Tallon didn’t get qualifying offers to Kris Versteeg, Cam Barker, Ben Eager, Colin Fraser, Aaron Johnson and Troy Brouwer.  This essentially cost Chicago several years of player control and made Barker, Bolland and Versteeg a lot more expensive than they needed to be.  Chicago was already walking a tightrope cap-wise, and those extra millions forced them to blow up the 2009-10 Stanley Cup-winning team more dramatically than they should have needed to.

We laugh at Dale Tallon for doing this by accident (he does a lot of incomprehensible things) but when teams intentionally burn a year of a player’s contract even though they don’t have a chance to compete – like many readers seem to want the Jets to do with Mark Scheifele – we don’t bat an eye.

Umm, nails much?

Now before I wrap things up here, I did want to reiterate that I understand and recognize that there are some supporting arguments to be made in favour of keeping Mika Zibanejad around. However, after researching the numbers, recognizing where Ottawa is as a franchise and realizing that there’s such a small window of opportunity to win in the NHL, it only makes sense to get the most value out of the team’s ELCs. I may not have a say in how Ottawa develops their prospects but if given the choice, I know what I would do.