NHL Free Agency: High Priced Talent Not Worth It.

Mark Messier and Wayne Gretzky signed a combined three free agency contracts that brought them to a new team and played a combined ten seasons under those contracts.  Together, they propelled their respective teams to the playoffs a combined one time.  One time.  A quick first round playoff loss for Gretzky while he was with the Rangers.When discussing the careers of Messier and Gretzky, the conversation rightly focuses on the fact that they were two of the most talented, most prolific and most successful players in NHL history.  As a life long Oilers fan, I have no doubt the previous sentence is true.   It is also true that both players peaked somewhere in their 20’s, yet received huge dollar contracts well into their late 30’s.  Vancouver paid Messier about $20 million over three years with not a single playoff game to show for it. 

Vancouver is not alone over the years when it comes to making a big splash on July 1st and signing a marquee free agent to big dollars.  It is a commonly held belief that a superstar addition via free agency will make a mediocre team really good and a good team Stanley Cup ready.  The reality is these teams are like losing gamblers who make a really big bet to offset their losses.  Big money free agents usually just end up maintaining mediocrity and handcuffing future development.  Make enough mistakes and a team ends up picking first overall and selling a renewed focus on “doing things right” through the draft and through development.I ran some numbers to quantify the impact of a star addition to a team’s success.  In addition to Gretzky and Messier, I looked at the post-signing results of 31 other marquee players* signed between 1997 and 2006 (the “Historical Free Agents”).  I also looked at the 2009-2010 rosters of each team and identified 37 marquee players who arrived via free agency, dating back to Scott Niedermayer, Teemu Selanne and Sergei Gonchar in 2005 (the “Recent Free Agents”).  Between the two groups, I had 163 seasons of results to pull from. 

* My list of marquee players is somewhat subjective.  I have tried to only include those guys signed in July that make a fan say, “Right on!  On team is going to be awesome”, or “I can’t believe a team is willing to pay that guy that much money?!”  In current dollars, it is basically guys making more than $4 million per season.   

To quantify the value of free agent additions, I set some expectations on their impact.  Obviously it is not reasonable to pin the results of a team’s performance over a season on one player, but it is reasonable to expect a star free agent addition to have a positive impact on the team’s results. 

So I ran the numbers in a couple of different ways.  First, I looked at how the team did before signing the player and how they did in the immediately following season.  If a free agent created value, my expectation was that a team would improve in terms of making the playoffs and progressing deeper in the playoffs.  

Secondly, I looked at the 163 seasons of play and quantified how many seasons each team missed the playoffs, made the playoffs, and how well the team did in the playoffs.  This look ensured that the full impact of the free agent over their signing was evaluated.  If signing a star agent created value, my expectation was that a significant majority of teams would be playoff bound with a reasonable amount of playoff success. 

The above table shows that a little over 25% of the Historical Free Agents saw their team’s performance improve from the year prior to their signing.  Out of the 33 players sampled, there were three teams that won the Stanley Cup: the Dallas Stars in 1998-99 after signing Brett Hull and the 2001-2002 Detroit Red Wings after signing Hull and Luc Robitaille.   A whopping 48% saw their team miss the playoffs again or fail to advance as far as they had the prior year.  Sergei Federov and Pierre Turgeon were the only two players to lead a playoff team out of the playoffs in their first year. 

The Recent Free Agents’ results were more at the extremes.  38% saw their team improve over the prior year, while 52% saw their team do worse.  Marian Hossa is the current generation’s Brett Hull, at least this year when he won the Stanley Cup with the Chicago Blackhawks.  Jay Bouwmeester, Marian Gaborik and Vinny Prospal helped the Calgary Flames and New York Rangers onto the golf course in April.  

If I am a General Manager of a NHL team, I probably am on the fence at a roughly 25-40% chance of improving the following year.  If I am a bit desperate to make the playoffs after an extended absence, or I need a marquee name to generate buzz in my city, I might roll the dice.  If I am outside of Atlanta, Florida or Columbus, I am a bit worried. . . 

The second chart takes into account all full seasons a player is with his new team.  If a player was traded part way through the season, I ignored the season. 

The two striking features of the chart are the similarities between the Historical and Recent Free Agents, and the fact that roughly 43% of the teams’ seasons ended with a failure to make the playoffs.  Roughly 85% of the seasons ended before the Conference Finals.  

For the historical free agents, Hull (3 times), Robitaille and Ed Belfour (twice) comprise the entire list of Stanley Cup finalists and champions with the Dallas Stars and Detroit Red Wings.  Niedermayer, Selanne, Gonchar, Daniel Briere, Hossa, Cristobal Huet and Brian Campbell are the Recent Free Agents who made the Stanley Cup finals.   Ten of the seventy players (14%) sampled played for the Cup, including four this year.  

Looking at the two charts, the addition of a marquee free agent is not the magic tonic to get a team over the top.  A star may bring a sense of hope to a team and its fans, but over 80% of the time things will not work out.  Sheldon Souray can confirm this fact on behalf of the Oilers.

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