The Business of Hockey: NHL's Most Efficient Spenders

Moneypuck -Contributor IAugust 2, 2009

In a salary-cap world, one with an Upper and Lower Limit, we are told the teams are on a level playing field, that it makes things more fair.

However while this is partially true, at least in comparison to the pre-lockout NHL, this is not always the case. One merely has to look at the 08-09 cap hits to see over a twenty million difference between the top spender Philadelphia at 66.175 million (with LTIR) and Los Angeles at Atlanta at 43.591.

There are plenty of other teams that are at both extremes of the salary cap world, so much that the average cap hit according to NHL Numbers is placed between the 19th ranked Canucks according to cap hit and the 20th ranked Blue Jackets.

This shows that while there are teams who spend in the upper portion, the teams that can't spend really drag the average down, noted by the five teams under the fifty million mark (Islanders, Coyotes, Predators, Kings and Thrashers).

However this post is not about crying for the poor teams, because of this separation in dollars spent, there is a shroud of doubt around who exactly the most efficient teams/management truly is at spending money because some teams really seem to have different budgets.

Did Don Waddell spend more wisely than Bob Gainey? Did Sutter spend better than Gillis? These are questions I look to answer.

To begin my analysis, I took a teams Goals For and Goals Against and removed the shootout goals and empty net goals.

I removed the shootout goals because as shown by Alan Ryder, the shootout in itself is largely luck, while there may be skill involved and some may be better than others, from season to season there is too much luck to properly state Team X is clearly better than Team Y at shootouts. So for evaluations based on a one year sample, we have to throw shootouts out the window.

Empty Net goals are thrown out for obvious reasons.

Next step is taking these new Goals For and Goals Against, and using a prediction model. To those new to this idea, prediction models take a teams Goals For and Goals Against and show you how well your team should've done.

Because we assume the scoring of goals is mostly a random distribution, as this way for thinking has a 93.4 percent correlation since World War II (see page 3).

For the purpose of simplicity, I used basic Pythagorean to do this research (GF^2 / (GF^2 +GA^2))= Predicted Win Percentage. I know PythagenPuck or Poisson are slightly better methods. However with the improved accuracy so minute, I didn't feel it was necessary for this research.

I then divided the teams PythaPoints (attained by Pytha Win % * 164) over the teams Cap Hit on the season to get a sense of which teams were the most or least efficient at using money to get points in the standings.

The work is here.

Now here is the detailed list (note the list is based on PythaPts divided by Cap Hit in millions):

1. Bruins 1.9055
2. LA Kings 1.7809
3. Sharks 1.7455
4. Sabres 1.7464
5. Hurricanes 1.7442
6. Devils 1.7174
7. Canucks 1.707
8. Thrashers 1.676
9. Predators 1.6744
10. Red Wings 1.6704
11. Blackhawks 1.6723
12. Wild 1.6222
13. Blue Jackets 1.594
14. Penguins 1.5929
15. Blues 1.5226
16. Panthers 1.5052
17. Ducks 1.4753
18. Capitals 1.4642
19. Senators 1.4309
20. Coyotes 1.427
21. Canadiens 1.4198
22. Flames 1.4047
23. Leafs 1.3559
24. Oilers 1.3558
25. Rangers 1.3525
26. Flyers 1.3427
27. Stars 1.2813
28. Avalanche 1.2714
29. Lightning 1.2393
30. Islanders 1.211

The outliers are what make this list intriguing:

You have teams like the Preds and Thrashers in the top ten and the Kings at No.2 and the Sabres (who are perennially underrated) at No.4.

Then you have big spenders at the bottom like Philly and the Rangers who can't turn their spending sprees into W's. The leagues elite, who have management smarts and money always rise to the top, such as Boston, San Jose, New Jersey and co.

I'm not going to sit here though and claim Darcy Regier is a better GM than Ken Holland, because his lack of cap hit may be because he struck out on free agents or just didn't see the need to spend at this time. We also don't know what teams budgets are so we don't know whether some GM's can't spend or didn't spend.

What we do know from this list is this: According to their teams respective Cap Hits in 2008-2009, this is what the team was able to produce.To say the least the list is at least interesting.