Market Inefficiencies and You: Why the Leafs Draft Strategy was Brilliant

The Toronto Maple Leafs caused one hell of a stir this weekend at the 2016 NHL Draft in Buffalo. After their no-brainer selection of Auston Matthews first overall, fans were confused by the rest of their picks. Mark Hunter‘s crew went off the board for most of their ten other selections, choosing players that seemed to contradict 2015’s theme of picking skill above all. However, there is a lot to defend about the Leafs draft strategy.

Market Inefficiencies and You: Why the Leafs Draft Strategy was Brilliant

To refresh, here’s the full list of players drafted by the Toronto Maple Leafs in Buffalo.

A few things stand out about these eleven new Leafs. First and foremost, they’re huge. Eight of them stand 6’2″ or taller, and six are over 200 pounds. Secondly, it seems odd that Mark Hunter – forever an OHL guy – would pick just two from that league. He took nobody from the CHL at all for his first five turns on the microphone. There’s the almost obligatory London Knight there in Nicolas Mattinen, but even he was the lowest-profile Knight eligible this year.

Finally, and most interestingly, Toronto picked five players who have been passed over in previous drafts. Yegor KorshkovAdam BrooksVladimir BobylyovJack Walker, and Nikolai Chebykin are all overage selections. Korshkov, Brooks, and Walker were all passed over twice (in 2014 and 2015).

So why was this the game plan for Hunter and co.? With such trends in the group of draftees (Auston Matthews notwithstanding), this was clearly a calculated, strategic decision.

What is a Market Inefficiency?

If any Leafs fans are unaware of the term “market inefficiency”, now is the time to learn.

In baseball, certain teams have improved their systems by identifying aspects of the game that are routinely undervalued by the rest of the league. Billy Beane‘s revolutionary overhaul of the Oakland Athletics (seen in the movie Moneyball) was not all about sabermetrics – as some fans assumed. It was primarily about identifying those market inefficiencies. It was Beane who determined that on-base percentage, not batting average, was the best way of judging offensive success.

In years past, the Athletics, as well as the several other teams in their footsteps, put more focus into acquiring elite-level defence – another undervalued facet of a good baseball team. It’s all about looking for something that other teams haven’t caught on to yet, and jumping on it.

In the aftermath of the weird draft day Leafs fans experienced, this article blew up. Zac Urback explains the potential in the untapped market that is overage prospects. Over the years, NHL teams have neglected players that were passed over in their first year of eligibility, opting predominantly for 18-year-olds. Urback cites something called Draft Expected Value (DEV), writing that:

“DEV is not meant to replace traditional scouting, but rather to help add perspective to particular prospects, identify potential “steals” or “busts”, and game the draft through the identification of market efficiencies and inefficiencies.”

Basically, the metric analyzes relevant stats to give prospects a value rating, projecting how they could do in the NHL. For a better explanation, read this post – let someone who knows what they’re talking about tell you why DEV is useful.

Anyway, Urback identified weeks before the draft that the overage player pool is severely undervalued by NHL GMs. The prevailing mentality seems to be that if a player was passed over several times by everybody the year before, there’s no use in drafting him the next year. However, what this fails to recognize is that certain players bloom later, and have development curves that begin to get steeper when they’re 19 or 20.

Players that have returned to junior undrafted, and jumped forward in their development the year after, have typically been forgotten at the next draft. These are players who were ranked near the bottom, or not at all, as 18-year-olds, and jumped up in value their next year.

In the past, NHL teams have found Joe PavelskiKeith YandlePaul Stastny, and, more recently, Ondrej Palat and Tanner Pearson in the draft as overagers. So, it stands to reason that scouts should incorporate the entire draft-eligible prospect pool, rather than just those in their first year.

How the Leafs Gamed the Draft

Urback’s DEV system tipped Adam Brooks as the best overage CHL forward available in 2016. His stats indicated he would be worth selecting in the 28-33 range of the draft (he was valued between 55-82 in 2015), and the Leafs got him at 92nd. Only one other player in Urback’s top ten was picked this year – Tyler Soy, who went 205th overall to the Anaheim Ducks.

Brooks, who might be the Leafs’ best-value pick, is given a 37.5% chance of making the NHL by DEV. The site compares his numbers to those of Nikita KucherovDerek Roy, and, jaw-droppingly, Claude Giroux.

Yes, obviously this doesn’t mean Adam Brooks is going to be Claude Giroux. But it does highlight that a player of his calibre who improved like he has since his draft year should not have been overlooked.

Vladimir Bobylyov, who went 122nd, is given a chance just under 17% of making the NHL. His comparables are less impressive – B.J. Crombeen and Jay McClement – but hey, for a fifth-round pick that would be pretty good. His fair value range is somewhere between 71-82, according to DEV.

Jack Walker, the third CHL overager taken by Toronto, is tipped at a 13% chance of getting to the big leagues. He’s compared here to Casey Cizikas and Adam Henrique, and was valued in the 83-96 range.

All three of these players are effectively gambles – as are all other players taken late in the draft. In this case, though, they’re gambles backed up by some analytics. If Kyle Dubas was brought in to be the NHL’s Billy Beane, this draft might be one of the greatest examples of his mathematical strategy. The Leafs clearly noticed before anyone else that this was an underexploited area of drafting and scouting, and pounced on the inefficiency to take these “off the board” players.

They started it last year, by taking Andrew Nielsen and Stephen Desrocher, and went all-in this year. Management recognizes that not every player is draft-ready at 18. Mark Hunter told the media as much:

“In this business of scouting, it’s different times that people get better, and we believe that some of these kids are going to get better at a certain time. That’s how we look at it.”

DEV doesn’t cover European leagues, but it stands to reason that the Leafs’ drafting committee was thinking along the same lines with Yegor Korshkov and Nikolai Chebykin. Which leads to another element of this draft strategy that the Leafs should be commended on.

Hunter quelled the fears of those who thought he’d be too focused on his OHL guys. The Leafs have invested a lot of resources into their European and American scouting departments, and (much to Don Cherry‘s dismay) drafted six players who play outside of Canada. Relatively early picks like Korshkov and Carl Grundstrom, from Russia and Sweden respectively, are players who may have been valued higher by the Leafs than other teams, due to more extensive European scouting.

Korshkov was apparently first identified by an assistant coach for his KHL team in Yaroslavl, who also scouts for Toronto and helped the team acquire Nikita Soshnikov – who looks like quite a strong prospect in his short time as Leafs property. Chebykin, too, could conceivably turn into an NHLer as another overager the Leafs took a flyer on in the seventh round.

The Verdict

The Toronto Maple Leafs have to be considered winners here, at least at this point. With so many of their selections coming as a surprise, and with the draft valued so highly by management (there’s a reason they had eleven picks), it’s clear that Hunter and co. see something the rest of the league does not in the players they took.

The Leafs come away from Buffalo with a franchise centreman in Matthews, who has been discussed enough to be ignored in this article. They also add a strong variety of players to their prospect pool – with defencemen, forwards, and a very interesting goaltending prospect in Joseph Woll. Toronto assessed that they could stand to add some size and defensive talent, and addressed exactly that on Saturday. They knew they needed another goalie, and took one who slipped because it seemed nobody else knew about him.

Above all, the Leafs draft strategy was just that – a strategy. They knew exactly what they wanted, and trusted their scouts to have identified unorthodox picks that may have been undervalued.

Play around with the DEV machine here, and see for yourself what Hunter and Dubas were thinking.

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