NHL has done good job creating parity, analytics suggest

There have been several articles recently suggesting that changes need to be made to the NHL’s draft lottery. The problem, apparently, is that tanking has gotten so out of control that the league needs to further try to deter it.

I wrote earlier about how the draft lottery has mitigated against tanking. Tanking is something the league wants to discourage. There is greater interest in games between two evenly-matched (and good!) teams than in lop-sided affairs. Given that the lottery proves it is possible to deter tanking, perhaps the league should do more?

An important consideration, however, is the main purpose of the reverse order draft – to help bad teams get better. Just as the league doesn’t want the gap between good and bad teams to be too large, it also wants there to be different good teams and bad teams each year. It’s not good for business to have the same teams making the playoffs and winning the Stanley Cup each year.

So, when it comes to the draft, the league has to walk a fine line between deterring tanking, and helping bad teams become better. Anything done to discourage tanking, such as widening the scope of the draft lottery, comes at a cost of bad teams generally having a harder time improving.

The idea that all teams should get equal time being at the top of the league as at the bottom is a concept known as across-season parity. And, just as when I wrote about the NHL’s within-season parity, there’s a well-established measure for it.

This measure is based on economists’ measure for concentration in an industry, and it’s constructed using each firm’s market share. The more equally distributed the firm’s market shares are, the lower the score of this index. In the context of across-season parity, instead of looking at market share, we look at how often a team wins the Stanley Cup – a kind of “championship share”. If Stanley Cups are evenly distributed across teams, then this measure will be lower than when they are concentrated among a few teams. A period in which only one team won the Cup, a “dynasty” so to speak, would yield the highest score.

We can also look at how often teams make the playoffs, or their “playoffs share”. As above, this measure tells us how playoff berths are spread across teams – with higher scores meaning that it is the same teams that make the playoffs more often. (For those interested in finding out exactly how this measure is constructed, go to www.depthockeyanalytics.com for more detail.)

Comparing the NHL’s current level of across-season parity to the other North American major sports leagues, we can see that the NHL is actually doing quite well. Championships and playoff berths are more equally spread across teams in the NHL than in any of the other major leagues, although the NBA comes close in playoff berths.

When we compare the NHL to previous eras, however, things don’t look quite so rosy. While Stanley Cups are more evenly spread across teams (the current era is far less dynastic than previous ones), the same is not true for playoff berths. When it comes to making the playoffs, the current era has a greater divide between “have” franchises (those that make the playoffs regularly) and “have-nots” (those that can regularly book April tee times) than ever before.

Why might this be? It is possible that the draft lottery has had some effect, but it seems unlikely to be that important given how minor the impact is on a team’s draft position. Perhaps more plausible is that the salary cap has magnified the difference between well-run and poorly-run teams – increasing the return to front office talent.

So what does this mean for the draft lottery? First, it should be noted that changes are already planned. After next season, the lottery will be used for the first three picks instead of just for the first overall. Second, there is reason to think that this year is not typical. This year is seen to be a particularly deep draft, and so being in the bottom few of the league guarantees a team an exceptional player, even if the team doesn’t win the lottery. Buffalo, assuming they finish last, for example, will come away with no worse a player than Jack Eichel, viewed by many as a generational talent even if he isn’t Connor McDavid. Indeed, some people had foreseen this year’s race to the bottom even before the season began. The question we should be asking, then, is whether tanking really is a serious systemic problem, and are we willing to pay the price to fix it? Because the solution doesn’t come free.