With the NHL Entry Draft 2013 less than a month away, many Leafs fans are amusing themselves with thoughts of who the Leafs should draft with the 21st overall pick, or of how we might be able to trade-up to grab a more desirable player. Leading up to the draft, I’ve tried my best to keep up with the prospects and have gotten a sense of where the “experts” think these young hockey players might be selected. We’ve also started our NHL Draft Profiles, with the next coming later on today. Many have compared this draft to the 2003 draft, where ample high end talent was available into the late first round and the likes of Shea Weber, Corey Crawford, Patrice Bergeron and David Backes were snatched up in round 2. In other words, if the hype is true this draft offers major opportunities for those teams that get their selections right.
The Trade “Market”
One of my inspirations for this blog was a Vancouver Sun headline reading “Tough guy Sestito re-ups with Canucks“. It wasn’t the signing in particular that got me thinking, but it was the way Canucks Assistant GM Laurence Gilman described Sestito:
“Players like Tom Sestito are a commodity, they really are.”
We’ve often heard players referred to as assets and commodities but when you think about what a commodity really is, you might hesitate to use it in endearing terms. To my knowledge, and I’m sure my freshman year econ professor will appreciate me remembering this, a commodity is a basic good that is interchangeable with other commodities of the same type.
Another word you often hear pandered-around is the trade “market” at the draft. Now, the use of “market” implies some sort of supply and demand of players and draft picks, all created and driven by the market participants, namely NHL teams. Each team has its own idiosyncratic set of resource endowments and seek to optimize their competitive make-up through acquiring, signing, and drafting players. At the micro-level, the Leafs’ strengths and deficiencies are well-documented, and fans seem to have a pretty good handle on what they think the team needs going forward. However, barring our ability to have complete knowledge of what each team is looking for (demand), and willing to part with (supply), we must look to other indicators to gauge the trade market.
One way to assess a market is to analyze the volume of transactions within a certain time-frame. High-volume is usually the sign of a liquid and stable market, where regulations are well-defined and participants are quickly matched with counter-parties that meet each others’ needs.
The following chart tracks the absolute number of draft picks transacted between teams and the relative percentage of those transactions that contained draft picks in future drafts, within a given draft year from 2008-2012.
You can see that the number of draft picks transacted has dropped precipitously from 2008 to 2012, while the relative percentage of future picks transacted has almost doubled. For example, in 2008, 73 draft picks were transacted between teams and 21 percent of those transacted picks were future picks. Fast forward to 2012 and the number of draft picks transacted falls to 22, with 35 percent of those picks being future picks.
Another way to assess a market is to observe the kinds of assets, or goods, that are transacted most often. To use a common investing analogy, investors are usually advised to diversify their holdings in order to reduce their overall portfolio risk. However, just as economies go through business cycles, the attractiveness of certain companies change according to the macro/investing/return environment. Likewise, NHL teams may have a propensity for trading for certain kinds of players over others. The following chart shows the total number of players traded within each draft year, and the relative percentages of the various positions.
A couple of things stand out in this graph. Firstly, it appears that the total number of players traded has been trending upwards since 2008. Secondly, center and defense continue to take the greatest share of players being transacted at the draft on a yearly basis. On the other hand, right-wing, left-wing, and goal consistently represent the three-lowest percentages of types of players transacted.
After taking a look at market volume and having dis-aggregated the volume into its component parts according to position, we should also seek to understand the market participants and the nature of their transactions with other participants. Namely, who is trading with who? The following pie-chart shows the average percentage of intra-division, intra-conference, and inter-conference trades over the past 5 drafts.
Judging from the data, it appears that on average, 64 percent of transactions occur between teams from the opposing conference, 32 percent between teams in the same conference, and 4 percent between teams in the same division.
Lastly, another way to classify teams within the pool of transaction participants is between playoff and non-playoff teams. The following chart shows the percentage share of transaction volume that is attributable to playoff and non-playoff teams since 2008.
In compiling the data for this particular chart, I was initially intrigued by the possibility that playoff teams might be driving the bulk of the transactions at the draft, and the trend between 2008 and 2009 certainly gives that impression. However, over a 5-year period, it appears that transaction volume, on average, is driven by an equal percentage of playoff and non-playoff teams.
Exhibit 1. I found this chart to be most interesting since the trend-lines are very clear. There might be numerous explanations for these trends, but I believe the most plausible answer is that in the face of regulatory uncertainty, or the most recent lock-out, teams reacted to this by opting to pick in the current year and to forgo future picks. However, if I had to choose one line to focus on, it would have to be the decrease in the number of draft picks transacted. Despite the limitation of not knowing the aggregate quality of the transacted draft picks, a decrease in the volume of picks should be most alarming, and something I expect to turn around this upcoming draft. A deep draft and medium-term visibility on the salary cap should be fertile ground for an uptick in draft pick trade volume this year.
Exhibit 2. I think it tells an interesting story. Most obviously, it reaffirms something Burke constantly reiterated, that defensemen are always in high demand. Defensemen and centermen, as a percentage of all players transacted in a given year, are consistently greater than almost all other positions. More interestingly, the number of transacted players is trending upwards over the past 5 years. I think the reason for this, once again, has to do with the expiration of the previous CBA. As the date approached, teams, having already been exposed to the system since 2005, were in a rush against time to complete certain transactions before the expiration of the old CBA. Therefore, for this upcoming draft, I think it’s safe to say that defensemen and centers will be involved in at least 50 percent of all the player transactions on the day of the draft. Might this finally the year that Nonis decides to leverage or abundance of defensive assets to move-up in the pecking order or to acquire our long-awaited first-line center? History clearly shows that the preference for defensemen and centermen is well and alive.
Exhibit 3. There is almost nothing new here except for the visualization. It comes as no surprise that the ideal trade partner is usually (64%) native to the opposite conference. If you are so inclined to play an armchair GM, this might be useful for spotting a suitable counter-party for your favorite team, come draft day. In other words, don’t expect the Leafs to deal with anyone from the same division.
Exhibit 4. The reason why I looked into this was because, as I was collecting data for the other charts, I thought I noticed a trend where playoff teams were more active in the trade market than non-playoff teams. As it turned out, on average, playoff and non-playoff teams are just as likely (50%) to participate in the draft day trade market. Therefore, for this upcoming draft, I wouldn’t expect a deviation from this trend.
– – –
VLM: We need a modern-day Brett Olmstead – Is he a UFA this summer? Someone please find this Olmstead fellow.
TLN: Who to target with Leafs’ 21st pick – Cam Charron advises Nonis to go for the home-run.
Hope in the Big Smoke: Better Call Paul (Stastny) – Yes please.
Backhand Shelf: Hegel, Tasarov, and the Evolution of Hockey – One of the best things I’ve read in a while. Grab your thinking cap and some popcorn. **Caution, philosophy ahead**
Aaron, just a last thought on the material you provided above.
In examining these trends and looking to explain the shift from a high percentage of picks/low percentage of players to a reverse of this scenario I feel you failed to properly identify the role of the most current CBA upon the data. Instead of focusing on the uncertainty of an expiring CBA on these trends, I think you should have properly identified the role that the rules brought in with the birth of that CBA played. Namely, the salary cap.
In the old market, there was no limit on player spending, and less limits on player earnings based on their seniority in the league. The salary rules relating to ELC and RFA contracts have created a vast shift in the value of these players to the the teams in question. And that is only compounded by the effect of the salary cap requiring teams to get the best "bang for their buck" in a way that did not previously exist.
The role this has on the decline of picks being traded and player movement increasing is twofold. One, as these young players and their cheap controllable contracts become more valuable, teams are less willing to part with them, and more willing to part with veteran players (often on expiring contracts) or RFA players about to gain UFA status. Two, this has led teams to locking up their own young talent in a way never before seen. This push to lock up and create a role for their younger stars has led to older players being made available in trade to either allow for that players role in the lineup, or as these veteran role players were replaced with younger cheaper options out of necessity with so much cap space being allocated towards retaining young talent.
Essentially, the value of assets was totally changed with the new factor of a salary cap. Or at the very least the way assets were assessed and valued. Veteran leadership and experience was once valued and worth paying for, whereas now cheap youth producing at a high level is the new golden calf. You still need that leadership, but its accepted place in your roster as most likely of only temporary status has shifted its value. In fact, basically, it gave birth to asset management in a way that only existed previously as a function of an owners willingness to spend.
Still, all in all, great look at the shifting trends in the marketplace and a great conversation starter. As to this year, I imagine that it in fact will simply be an outlier. The trends may shift, but it will only be due to a very short term market effect in the form of a reduced cap and the existence of compliance buyouts. Otherwise, I would expect the trends referenced above to more or less continue as they are and more or less level out at these rates in two or three years time. The only caveat I would place on this prediction is the yet unexplored role of eating salary in trade. But that being said, I imagine that would only make player, rather than draft pick, movement more likely.
Good write up. Now that the leafs are going to a division format, i wonder if trading partners will expand to three of the four divisions. That is, NYI, PHI, NYR, PIT, CAR, NJD, WSH.
That's it, this "Burke tried to turn the Leafs into Team USA crap has me wishing for a non-stop dose of HonestHockey and UncleBob. I'm outta here.
Just finished the article. Nice work, Aaron.
More widely, I dunno what to expect this draft and off-season in terms of player movement. The cap crunch will create some interesting situations. As much as I chirp the pie in sky notions that have corrupted MLHS this morning (lol), there will probably be some crazy shit going down.
Breaking....#stlblues forward Andy McDonald retires because of post-concussion concerns http://www.truehockey.com/articles/Post-Concussion-Concerns-Lead-to-Andy-McDonald-Retirement…
JVR - Stastny - Kessel
Clarkson - Kadri - Lupul
Frattin - Coleborne - Kulemin
Komarov - Gordon - McClemment
Stastny can probably be had with a 2nd round pick and a decent prospect
@leafmealone @mapleleafmuse Thanks for the awesome post. What you said made a lot of sense and it was definitely a blind spot in my analysis. The advent of the salary cap has shifted the value of players vs. draft picks My opinion is that salary retention should further drive trade activity but that could be 2-3 years down the road. I agree with your point that this year will be an outlier and I think I meant to say that in the article but didn't put it in those exact words. In any event, I think I might continue to track these metrics and see how the market evolves in the next couple of years.
@leafmealone I've just logged on and I'm reading through these posts. What's gotten into MLHS today?
@LeoTheLion It seems nothing will happen until the end of the playoffs. That last week and going into UFA season will have some amazing things happening
@TheCanucksnaphook Mmmm...I like pie.
@TheCanucksnaphook Do the Islanders have a stud defense we can steal if we take Dipietro?
@rustynail too bad
@rustynail Frees up some cap space? Or was he a UFA?
@skiingallday My opinion is they're going to keep Stastny and trade ROR when they're allowed to but who knows now, with Roy in charge.
@skiingallday There'll be a few teams bidding for Stasney. And he might only be available if Col takes MacK. I think it will take Kuli or Frattin and Gunner and probably a dence prospect like Nillson or Percy or Finn and a second round pick. Everyone saw how he played at the world's; he ain't coming cheap, regardless of his contract or pending UFA. Centres are at a premium.
@mapleleafmuse @leafmealone Forgot to come and check for a reply until now. Thanks for the kind words. I most appreciated what you posted as it is something I really haven't (read: never) seen explored elsewhere, and I do scour around the net for any interesting articles I can find on the game. Look forward to seeing where you're analysis takes you on this subject in future.
@Knights2Leafs The model you've chosen for you tshirt this time has nothing on the other one. ;)
@wendelsfist Good. Cause if the Bruins win I'm definitely going to need something to take my mind off it.
@LN-093 @TheCanucksnaphook I like A. Macdonald as a shutdown partner for Phaneuf. I don't think they will deal with Hamonic and nor Reihnart.. Something like A. Macdonald, Dipietro and an A prospect(s) (Nino or Strome or Nelson) and for Komisarek, Liles and a B or C prospect. The deal can't be structured as a rape of the NYI else the league may prevent it.
@wendelsfist @leafmealone @Alec Brownscombe That's the trade I've hated for years (as soon as it was announced) and the one I always mention when people cry about Kessel/Seguin. I have yet to be impressed with either Seguin or Hamilton. He (Hamilton) has done zero for me. Such a crappy tourney for a supposed #1 Canadian dman and his NHL (yes short) career has done nothing to make me think we've missed out on a sure fire player, but he sure has been touted as one.
@LN-093 @skiingallday @leafmealone This goes back to the stupidity that an NHL GM would worry about the effects of a tournament held once every four years on his roster. Players get injured. They get traded. Their production falls off. Other stars emerge in the meantime. It's just so entirely pointless.
The USNTDP makes sense because it gets all their talent together as kids and provides them with a higher level of competition against which to grow their individual games. While simultaneously gaining familiarity with each other for tournament play down the road. But that's where it ends. When these kids make it to the NHL, it's about business only.
@leafmealone @LN-093 @skiingallday I'm branching of from LN now, I'm out to get my slate rightfully cleaned. In my 2nd point I stated that I refuted that fact that it was burkes plan and that it was merely coincidence and best player available mentatlity. One of these days alice... To the moon with ya
@LN-093 @leafmealone @skiingallday It implies that his decisions were in some way influenced by this. And that's simply not true. He got who he could to make the team better. During this time he tried and failed to get numerous big time Canadian players who blew him and the team off, or were unobtainable.
While true that the way things fell out MAY have provided some benefit that way. But it was COINCIDENTAL. Never planned. Not even as a side benefit. My frustration comes from the genesis of this line of thinking. Shitty MSM pricks who were sharpening their knives to attack someone they felt didn't spend enough time kissing their ass. To have to hear it parroted back later on, watered down or not, just makes my stomach turn that people are going to give credence to that garbage.
@skiingallday @leafmealone @LN-093 Absolutely, it would help their development if for example, Kessel and JVR played together at the Olympics and won gold. It would teach them what it takes to win a major title, like the Stanley cup! It would also strengthen relationships to go through stuff like that together.
Quote "Keep in mind, some of those guys only made it onto that team BECAUSE they had familiarity with one another."
and this would happen with Team USA, but they would all be stars.... so don't you think this would help their development... literally that all I'm trying to get at.
My points that I made there, are the exacts things I'm trying to get across, only the 3rd one is supporting my Idea from the 1st point
@skiingallday @leafmealone @LN-093 Keep in mind, some of those guys only made it onto that team BECAUSE they had familiarity with one another. We could have iced two separate teams that equally had a chance to medal. That's not supporting the idea that Burke used the Leafs to that end for the purposes of USA hockey.
Your first point doesn't support anything, it would simply be a convenient co-inicidence. Nothing more. There's nothing more to read into it.
And perhaps my comments are better directed at LN-093 who claimed that it was part of Burke's agenda. But you choose to defend that logic and you tar yourself with the same brush. You're both reading into this what you want to find to support this, and ignoring the truth. Again, if you look at NHL rosters before, during, and after Burke's time with us, the ratio of American born players on the Leafs doesn't warrant that speculation by any measure.
The whole thing was driven by assmunchers like Cox, Simmons, Feschuk, and DiManno (and may God help you if you could ever agree with her articles) to try and turn people against Burke because of how contentious he chose to be with the media. You're eating up and re-serving a pack of lies created by the worst examples of humanity that I can imagine.
1. Having JVR - Stastny - Kessel would be amazing for Leafs, but also potentially benefit team USA
2. I never EVER, I even refuted the notion that this was Burkes "Plan" to combine team USA on the leafs, just pointed out it was coincidence, best player available mentality
3. Supported my claim that having players play together in the NHL helps when it comes to Olympics, using team canada 2010 as an example where 2 FWD lines were familiar with each other as well as the Keith - Seabs pairing.
You're making this personal, and that's not the intention of MLHS, you don't have to agree, but don't need to be aggressive about it and try and tell us that we are completely lost and don't have a grip on reality
@skiingallday @leafmealone @LN-093 Lots of teams in history have had more than one Canadian stud. So using us is a terrible example. Second, many of the players on those teams aren't actually played on the same line on those NHL teams. And lastly, the inclusion of pro players at the Olympics is a relatively new phenomenon and may not last. And it only makes sense to play these guys on a line together in a tournament that short where there's really no camp to get to know one another.
However, to suggest that Burke ran an NHL franchise based on a tournament that happened every four fucking years is absolutely god damn ludicrous. You might as well be arguing that instead of him knocking up some reporter, that she in fact knocked up Burkie. Get a grip on reality and don't let go. As it appears to be passing you by at an alarming rate.
@leafmealone @skiingallday @LN-093 ... how ... why do you think Perry Getzlaf or Marleau Thorton Heatly were on Canada together.. Chemistry, they play together on a regular basis and it showed during the Olympics. If you could have JVR - Stastny - Kessel together, not only would that be a sick line, but it would be beneficial for team USA. That's all I'm trying to get at.
@leafmealone @skiingallday @LN-093 How many times do you see countries make lines of players that already play together. If you were in charge of a team, wouldn't it be beneficial to the countries team to have players already playing together? There isn't enough time in international competitions to have players "gel".
He signed a bunch of USA guys because he had relationships with them and they were among the only ones willing to come here. Canadians weren't going to do it until we improved as a team. Not worth the pressure to be the saviour of "Canada's team". Sad but true.
Not to mention how overblown the "Burke only signs Americans" BS was. If you looked around the league at rosters by nationality we were no different really than anywhere else.
@rustynail @leafmealone @LN-093 @skiingallday Did that contract take him to UFA? As that would mean they matched for big money and won't ever get a chance to get anything out of him before he might walk for nothing.
Guess the only potential winner in that scenario would have been the team that would have claimed him off waivers if Calgary had won the bidding. lol
None of those teams will make space and give up a good asset though. The world's means nothing compared to the NHL. It's a good sign, is all. In reality, his play has been declining for 2years. He's a huge risk to give up assets for.