A blog mostly about hockey economics. Sometimes other sports and stuff.
Saturday, May 27, 2017
NHL Draft: Where Success Equals Failure
At what point in the NHL draft does the probability of success equal the probability of failure? To answer this question we’re going to look at the drafts from 2004 to 2010 and player salaries at age 23, 24, 25. The O22 - U26 is the window between entry level contracts and unrestricted free agency; I call it my draft analytics sweet spot. Success here is defined as a salary over a million dollars post entry level, and failure is 0 NHL GP and less than 30 AHL GP any given season in the same O22 - U26 window. Perhaps the bar for success was set about $300,000 too high, but I’m a fan of the million dollar threshold. Statistics from the 2016/17 season have not yet been included in my database.
The reason for choosing the drafts from 2004 to 2010 because we’re only interested in contracts signed under a salary cap, and cut it off at 2010 so we can see a six year window after the players are drafted. In salary based draft analytics you can’t use data from before salary cap because entry level contracts were a game changer. So if you want to look at that post-entry level pre-UFA (O22-U26) window to measure pick value, you’ll get a limited sample size (in this case 7 drafts). I also prefer to use information from more recent drafts to capture more recent trends in drafting, but like “Kid Icarus”, you need to be weary of flying too close to the sun. The more recent the data, the less information you have to determine success rates; but the older the info, the less relevant it becomes to current trends.
The answer to the question “where does success equal failure” is the 28th pick. After that you are more likely to fail than succeed. Below is an illustration of the probabilities of success and failure for all picks in the draft. You can see that the probability of getting a million dollar player drops very quickly in the first round, and starts to level off after the 2nd round. Statistically there is not much difference between a 4th round pick and a 6th round pick. Fitting a logarithmic trend line in Excel to both the success and failure rate data produces a high correlation, though the success line hits Y=0 at the 162th pick. All picks after 162 should have a non zero chance of producing a million dollar player. The blue line is the failure line, which I also refer to in baseball terms as strikeouts (or Ks).