By the numbers: Grading every team’s contract efficiency
Today, we rank (almost) every contract on every team in the league based on the same methodology in an attempt to figure out which teams are the most efficient with the money they spend.
The contracts included in the exercise are every healthy, non-ELC skater that my model has a projection for, as well as any dead money a team has on their cap via buyouts, salary retention and cap recapture penalties. That means no RFAs without a deal, no players on an entry-level deal, no players without a significant NHL sample, no players on LTIR and no goalies. My model doesn’t currently spit out future win projections for goaltenders or expected contract value either, so they were unfortunately omitted. Unused cap space is also not considered as there’s no knowing how that space would be used. This is about the value of each contract currently on the books.
Teams will be graded empirically based on the surplus value they bring in per player contract (all dead money counts as one) as well as the average probability those deals will provide positive value. Both are based on a player’s age-adjusted projected win output according to GSVA and the uncertainty in that projection for future seasons, along with the cost of a win on the open market. How much each team spends to obtain those wins will also be graded.
What’s being assessed is the future value of the remainder of each contract, meaning what a player has already done holds no merit here. Future value means age is crucial in terms of grading each contract, with players peaking between the ages of 22-26 and declining afterward.
Surplus value will depend on term, where more seasons give more opportunity to compound value. Positive value probability depends on the certainty of a player’s projection which depends on how much variance there has been in the player’s past numbers. Longer term means that uncertainty increases.
Each contract will be graded based on where their combined surplus value and positive value probability fall on the following percentile scale. All contract and roster data is as of July 15.