{"id":90185,"date":"2020-11-10T16:58:54","date_gmt":"2020-11-10T21:58:54","guid":{"rendered":"https:\/\/lastwordonsports.com\/hockey\/?p=90185"},"modified":"2024-04-01T15:26:12","modified_gmt":"2024-04-01T19:26:12","slug":"nhl-salaries","status":"publish","type":"post","link":"https:\/\/lastwordonsports.com\/hockey\/2020\/11\/10\/nhl-salaries\/","title":{"rendered":"Who Takes a Discount in NHL Salaries Part Two: Winnings Double Dividend"},"content":{"rendered":"

In part one of this series<\/a>, we discussed how taxes affect NHL salaries. I never believed taxes were the reason the Tampa Bay Lightning<\/a> and Vegas Golden Knights<\/a> have signed so many sweetheart contracts in the past few years. The hypothesis was slightly more simple. Players love winning, and good teams are the ones that generally sign players at below market value. So, this allowed for the idea to check for a correlation between player salaries and the quality of the team to see if players do tend to take less money to play for good teams.<\/p>\n

NHL Salaries<\/h2>\n

Defining a Discount<\/h3>\n

To see if players tend to take discounts on good teams, we need a definition of “discount”. Again, this post will use Matt Cane’s and the Evolving Wild contract projection models. They forecasted the salaries for each contract in the 2018 and 2019 offseasons. Using their numbers, we will define how much a discount a player took by a metric called “cap hit as a percentage of expected”.<\/p>\n

For an example of “cap hit as a percentage of expected”, take Artemi Panarin<\/a><\/strong>\u2018s $11,642,857 per year contract last summer. Evolving Hockey forecasted<\/a> Panarin\u2019s most likely contract as an 8-year, $11,172,683 per year contract. On a 7 year deal, they forecasted him at an AAV of $10,482,359, so that’s the number we’ll work with. Given this forecast, take Panarin\u2019s actual $11,642,857 AAV, divided by his projected $10,482,359. This shows us we see Panarin earned about 11% more<\/strong>\u00a0than was expected, meaning his cap hit as a % of expected AAV is\u00a0111%<\/strong>.<\/p>\n

If players take discounts to play for good teams, there should be a negative correlation between the quality of the team signing the contract and cap hit as a percentage of expected.<\/p>\n

Team Quality<\/h3>\n

Next, we need some way to define team quality. There are various ways to do this, however, let’s keep it simple. Hockey Reference<\/a> stores the pre-season Vegas betting lines for each season, and this post will use where bookies set a team and it’s over\/under betting line as a proxy for team quality. Using preseason data is not perfect since some things can change during the offseason after the contracts are signed, but it’s an assumption that most players, especially those good enough to move betting lines, have a good guess as to what the team signing them will look like by October.<\/p>\n

Do Players Take Discounts on Good Teams?<\/h3>\n

What does the data show us? It looks like players really do tend to take less money than expected when signing with good teams.<\/p>\n

View post on imgur.com<\/a><\/p><\/blockquote>\n