The Salary Cap Solution

[Masterfod]

In my opinion, you have to spend more on certain players because you can't realistically put a team of 21, $2.5 million players. So really this whole thread comes down to one thing: as a GM, which position(s) do you value most as the crucial foundation to building a cup-winning team.

[chicocanuck]

No, I agree with that point. While it may be the most economical, it's not the most practical. The issue is spending TOO MUCH on this crucial foundation. I think the goal of building a successful team in a post-cap era world is being able to find the balance.

[Masterfod]

Yeah, I'm at a loss as well. The whole time I used to lurk here, almost every argument degenerated into a flame fest.

[VanMAn]

name='Masterfod' date='Jun 23 2009, 05:59 PM' post='7409273']

I think you are misunderstanding him. Players who are voted for the Vezina are already being paid TOP DOLLAR. He is saying that a good, cheap goalie wins Cups, contradictory to the voting trends for the Vezina. Once the goalie wins the Cup however, they start getting paid more, and they take up more cap space. He isn't saying that the goalies themselves are less likely to win, he's saying the team is, because a larger amount of the cap is going towards the SAME goalie, and they therefore have less to spend on other players.

[Eaves88]

What it comes down to is that today's goalie stats are missing a key metric. Whether you look at save %, GAA, or win %...these are all expected values. Any self-respecting statistician, physicist, economist, asset manager, or high school math teacher will tell you that comparing expected values in isolation means little to nothing. You have to consider each expected value in conjunction with its statistical dispersion. This is what the OP referred to as standard deviation or variance.

In finance, this concept is known as risk-adjusted returns. Nobody cares if you picked a lucky penny stock that exploded and made a millionaire dollars. Why? Because it doesn't prove anything about your abilities as an investor. It doesn't say anything about your chances of repeating. However, if you can beat the market while holding a less volatile portfolio, then you have outperformed market on a risk-adjusted basis, and people have reason to believe that you will continue to do so.

The problem with hockey goalies is that their standard deviations are huge, but nobody keeps track of or even measures them. Just think about it from your experience: a 2.00 GAA goalie is considered very elite. However, rarely will 2.00 GAA goalies in the NHL allow 2 goals every single game. More likely, he'll allow 1 goal, then 3 goals, then have a shut out, then allow 4 goals, and then allow 2 goals the next night. Sounds like a fair supposition? Well, you might be surprised to learn that the standard deviation in this case is 1.6. Assuming normal distribution, this means that in 68% of games, this elite goaltender will let in between 0.4 and 3.6 goals (and in 95% of games, he will allow between 0 and 5.2 goals). Since allowing 3+ goals is usually considered terrible for a NHL goalie, this is not comforting knowledge at all! If I'm a coach/player/fan, I want to know that my goalie will allow between 1.8 and 2.2 goals on the vast majority of nights. Heck, I'd even prefer a goalie who could guarantee allowing between 2.2 and 2.6 goals every night...his GAA would be higher (at 2.4), but more crucially, the variability is lower. In other words, there is less risk. In fact, any rational coach/player/fan should prefer this latter goalie. Unfortunately, today's NHL doesn't even care to identify this goalie. Instead, we keep track of shutouts...which really shouldn't even be viewed as a positive stat. If two goalies both have 2.00 GAAs over 82 games, but one has 15 shutouts, you should always pick the other goalie for your team.

All this preamble was meant to provide some context to better understanding the OP's point. Given this high volatility inherent to every NHL goalie, it simply isn't a wise economic decision to bet so much on him. Goalies are vital to playoff success, no doubt. Let's say the goalie determines 50% of the series outcome. The 18 skaters determine the other 50% of the outcome. Does that mean the goalie should be paid 50% of the team's total salary? No! (I know they aren't, but I'm using a hyperbole to make the point clearer to understand.) The reason you don't pay him 50% of the cap despite his importance is the risk described earlier. Though we are accepting as fact that a goalie makes up 50% of the team's success, finding a goalie with a 10% higher winning percentage unfortunately does not equate to a 5% (= 50% x 10%) better chance of winning the series. Once you consider the standard deviation around the goalie's winning % and the restrictive sample size of the 7-game series, the improvement in the odds of winning are significantly reduced (maybe 1%...I'm too lazy to do the actual math right now). But conceptually, this realization teaches us that the better goalie in this case should not be paid 10% more than an average goaltender, or even 5% more; if winning the playoffs is the ultimate goal of every team, he should be paid 1% more than the average goalie (assuming we accept the example numbers I threw out there).

What do we do with the 9% saved? We pay it out to the other 18 players. Even though they are less "important" than the goalie individually (and merely equally as important as a group!), the fact that they are 18 separate individuals increases their value to the team. As independent variables in a group, spending money on them = diversification, or spreading out our eggs among different baskets. The chances of all 18 players having an "off night" simultaneously are significantly lower than the equally important goalie having an "off night" by himself. That's why we should allocate more resources to the group as opposed to the individual.

Sorry about the extremely lengthy post, and sorry if parts of it seem patronizing. But I wanted to be as clear as possible because many members seem to be bashing the OP without even comprehending his argument properly. Certainly his words aren't gospel, and there is good reason for intelligent debate…but some people should really learn to keep their mouths shut and be thought a fool rather than to open them and remove all doubt.

And for those of you making fun of the OP for bringing class concepts into this discussion, may I ask what's so funny? The whole point of education is to acquire new knowledge and apply that knowledge to different aspects of life. If you think statistics are only for math class, diversification is only for investing, and efficient markets are only for economics, I'm sorry to break to you that your education has failed you.

[VanMAn]

What it comes down to is that today's goalie stats are missing a key metric. Whether you look at save %, GAA, or win %...these are all expected values. Any self-respecting statistician, physicist, economist, asset manager, or high school math teacher will tell you that comparing expected values in isolation means little to nothing. You have to consider each expected value in conjunction with its statistical dispersion. This is what the OP referred to as standard deviation or variance.

.......

Sorry about the extremely lengthy post, and sorry if parts of it seem patronizing. But I wanted to be as clear as possible because many members seem to be bashing the OP without even comprehending his argument properly. Certainly his words aren't gospel, and there is good reason for intelligent debate…but some people should really learn to keep their mouths shut and be thought a fool rather than to open them and remove all doubt.

And for those of you making fun of the OP for bringing class concepts into this discussion, may I ask what's so funny? The whole point of education is to acquire new knowledge and apply that knowledge to different aspects of life. If you think statistics are only for math class, diversification is only for investing, and efficient markets are only for economics, I'm sorry to break to you that your education has failed you.

[Pro Canuck]

Thank you as what you wrote is a good example of what I am saying. Why put try to put stats to generalities as the OP did. All he had to say was boy it is good to have a goalie with a cheap cap hit so I could sign a team of 20 g scorers. Did he or you need to go through such detail? As the orginal post was about how to put together a 20 g roster under the today's cap world. Sorry but I am not sure about this and many other do not. You might but that's ok.

Please do not try to put other down by trying to add some reference to stats terms that have nothing to do with the real agrument. Deviations have nothing to do with it. He used the goalie references as part of his plan to save cap space by getting a lower cap hit. The true point is a team wants to sign a player to the lowest cap hit possible including the goalie. I would ask you and the OP would you not go with Lu or your elite goalie if their cap hit was in your low cap hit range? Again it is a low cap hit that is important and not replacing any elite player.

[VanMAn]

Deviations are a large part of our posts.

It is not just about getting a good negotiator.

Sorry mate, you have not understood the situation and it is entirely unrealistic to just say, well, your point is moot if Luongo wants to play for free.

[suomistyler]

Food for thought....

You could also say that the combination of Luongo's rich salary and the canuck's failure to draft and develop players has resulted in a three year search for an effective right winger for the first line that arguably would have made the twins go from 75-80 point players to 90-100 point players over this time.

Of course this is also a result of Nonis giving Naslund 6 million a year prior and his stubborn passion to build from the goalie out...but i always wonder if we had instead gotten a 2.5-3 million dollar goalie instead and a skilled right winger who could pot 35+ goals playing with the sedins, where we would be at today...

[Fat Alberts]

Rypien for Crosby.

[Resiliency]

The Canucks should really trade Luongo and get some young players back and sign Craig Anderson. He had a better save % in the regular season and won't cost more than 2.75mil.

To OP, very good post. I agree with most of the information and analysis' that you made. This is one of the better threads that I have seen on CDC in one and a half years.

[Pro Canuck]

Bump. As fans, need to keep to the rules here before getting out of hand.

I am supportive of signing Gaborik, but we had better not be signing him to a 3 year deal for 21 million. We better be signing him to 14 years 70 million. 7 mil cap hit vs. 5 mil cap hit.

[Pro Canuck]

This is a good time to bring this up. When Luongo has an awful game and gets pulled during the regular season, people forget it the month after. When Luongo has an awful game in the playoffs ala Chicago Round 2 last year, people say he choked. These people clearly do not understand the mathematics of goaltending.

These types of games will happen every so often. It has very little to do with choking. Nonetheless, it is not at all contradictory to say goaltending is the most important criteria in winning a cup while at the same time saying getting the best goaltender is not the wisest move. You need to get the most "valued" goaltender. Good time for everyone to reread my original post.

[O PH8]

Lots of work went into that, interesting read..

I'm glad you are putting statistics in to layman's terms for people to - you have a valid point about the goaltending for sure

[hsedin33]

Whoever wins the cup will have won because they are a great team all around, regardless of who's getting paid more or how your assets are distributed on the ice.

[Ohnoeszz]

Since each team is getting 57 mil the simple key to winning is doing more with that 57 mil. To do that you need guys that outperform their contracts. For the Canucks, Burrows ratio of production to pay has to be one of the best in the NHL. The Sedins are also outplaying their pay grade and we can probably expect that from all three of those players for the next few years.

The other way to get guys performing above their salary is to find young talent on entry level contracts. Grabner is an example of a guy who could come in next year and far exceed what he is paid.

On the flip side of that however, are guys who don't play to their salary. They have a negative impact in the cap world and that is the danger of free agency. You may add 30 goals to your team but if you overpay for it you are lagging behind the other teams that may get those 30 goals at half the price, allowing them to allocate the rest of the money somewhere else.

Now, all that talk of a player playing to his salary is as subjective as it gets (is the guy a 2 way player, can he play on the PK or PP, does he need different linemates... etc.) but you have to be happy about the salary structure of the Canucks. They have their elite, core players (except Kesler) locked up longterm at bargain prices and a plethora of young forwards waiting in the wings to provide cheap high quality play or assist in trades. As I see it, the Canucks are at the forefront of the league right now when it comes to working within the cap.

As far as allocating a certain amount of money to certain positions - that is a fantasy. Each team is going to have to play with the hand they are dealt and signing a Luongo is the kind of opportunity not many teams have. Likewise the Canucks can't simply go out and find two elite centers worth 9 million a year to copy the Penguins model. These teams are operating in a system where not all the players are available to them.

[Pro Canuck]

I stand by what I wrote. Please go through this thread from summer 2009.

Go Canucks Go