Competitive Advantages: the Ottawa Senators and the NHL’s growing salary cap ceiling

The internet was abuzz after Mark Lazerus of the Chicago Sun Times published his article on the Chicago Blackhawks’ use and reliance on hockey analytics to help them make more informed decisions when it comes to their player personnel.

Learning that the Blackhawks, one of the long-standing elite teams, rely upon analytics to create a competitive advantage over their peers has given cause to celebrate within the analytics community.

Despite the grandstanding by self-promoting douchebags at either end of the spectrum, I feel like the greater hockey community has already arrived at a middle ground in which people have acknowledged analytics’ utility. Usually this kind of acknowledgment comes after prefacing that by stating that “advanced stats” are only part of the equation and should not be used exclusively.

“Stats are what they are,” Bowman said. “There’s no disputing who scored the goal, or who was on the ice for the goal. That’s fact. What you do with that is sort of the real value. And I think there’s an art to it. The analytics themselves are very objective. But then you have to do something with them and draw conclusions.”

Precisely, and other considerations should not also be ignored when examining the success that Chicago has enjoyed. Luck and opportunity also played an incredibly large role.

After years of mediocrity, eventually the Blackhawks wound up with a few lottery picks necessary to nab talents like Jonathan Toews and Patrick Kane. Just to get the lottery picks doesn’t even begin to tell the story however. Being terrible doesn’t necessarily guarantee you a franchise cornerstone or a generational talent – that is completely dependent upon the draft class and some luck too.

Not only did Chicago nab Patrick Kane with the first overall selection in the 2007 Draft, the organization fortunately netted Jonathan Toews with the third overall pick in 2006.

Toews was obviously a great selection, but the Blackhawks were fortunate that he was there on the board at three. Had the St. Louis Blues or Pittsburgh Penguins taken him with one of the preceding picks, the Blackhawks would still be good team. However, would they have won a Stanley Cup with either or Erik Johnson or Jordan Staal on their roster instead?

To quote Daniel Alfredsson, probably not.

You can’t disagree with the numbers, you can only disagree with the conclusion,” Bowman said. “People can say we’re drawing the wrong conclusions, and that’s fine. But I don’t think we are. I’m not looking to get it adopted league-wide. I like what we have, and I believe in it.”

The benefit of using analytics is that is an added resource that allows the Blackhawks to evaluate prospective free agents, hypothetical trade scenarios and determine efficiencies when negotiating extensions with their own players. The numbers augment other sources of information and if the Blackhawks are doing it right, it gives them an even bigger edge on the competition.

“What we do is different,” Bowman said. “I think it’s better, but I guess it’s a matter of opinion. It’s also a competitive advantage. That stuff’s readily available, but what we have is more proprietary. Which is why I’m really trying not to talk about it. I think what we do gives us an advantage over other teams. They might say I’m wrong, but we’re pretty confident that what we have works.”

I’ve always admired the way that the Blackhawks are wary of complacency and seem amenable to doing creative things to give their organization a bigger window of opportunity to contend. If their analytics are working and playing an integral role, it’s worrisome as a fan of a mid-cap team like the Senators who already doesn’t have the luxury of being able to spend to the salary cap’s upper limits.

Earlier this offseason, Eugene Melnyk acknowledged in an interview on TSN 1200 that he was willing to expand the budget spent on scouts, if the hockey operations department deemed it necessary.

“They have…. You know what… they have, I don’t want to say unlimited because they’ll run with that, but they have a lot of access to capital to spend on the people… Our scouting is second to none… I really believe it’s second to none and just take a look at some of the people we’ve drafted. We added international scouts, NHL scouts, college scouts. We were one of the first ones that had college scouts. We scout other NHL teams for players that are coming up for unrestricted and restricted (free agency). We have everything pretty much we need to, but if they need more, those are tiny salaries compared to some of the players. You know, players $7 million… think of what a good scout costs. I’m not going to tell you because everybody else knows, but that’s not an area that we skimp on at all. It’s the opposite, whatever you need, we’ll give it to you.”

The Senators already boasts one of the smallest front offices in the league and if they are as far behind the analytics curve as I suspect they are (ie. would the Senators really have offered that extension to Colin Greening otherwise?), they run the risk of seeing franchises like the Blackhawks gain more competitive advantages than they already have.

It is an easily correctable problem, but until the Senators proactively make efforts to remedy it, it’s a growing concern only because analytics in hockey is a growing field. If the Senators simply cannot afford to the upper reaches of the cap ceiling, the least they could do is spend less money on other departmental areas that could help ensure that they’re spending their limited financial resources smartly.

Salary Cap Ceiling Rises to $69 or $70 Million

NHL Commissioner Gary Bettman spoke prior to the start of Saturday’s game between Boston and Montreal to expand a number of topical issues that were of league relevance. While a new playoff format, NHL expansion and outdoor games were also discussed, it was Bettman’s comments on the salary cap and its specific thresholds that were most interesting.

Via NESN:

“Our system corrects for fluctuations in the Canadian dollar, because all of our computations are done in U.S. dollars. So if the Canadian comes down, as it has a little bit, then HRR, Hockey-Related Revenue, will be down, and the cap will be down. I’m not talking sizeable amounts of money, maybe a million or two. “Well we’ve said, and these are rough, rough projections because we don’t have enough data yet, the guesstimate was around $71 million. With the Canadian dollar down, maybe it could be 69 or 70, in that range. But those are just rough estimates, nothing more than that at this point.”

The salary cap parameters for this season are currently set for a $64.3 million ceiling and a $44 million floor.

Back in December, TSN projected that a salary cap ceiling of $71.1 million would mean that the cap floor would rise to approximately $52 million.

The Senators have prided themselves on their fiscal efficiency and have staunchly referred to themselves as a mid-cap team, so should the Senators wish to keep that label, at least in theory, they should have some money  to spend.

With $49.3 million already committed to 18 skaters and team needing to make small financial commitments to Eric Gryba, Robin Lehner and Mike Hoffman, the organization should be in a position to add salary. Of course, this number could continue to grow should the organization trade Jason Spezza.

In a season in which the Senators’ fan base has paid close attention to the comments made by management and ownership regarding money, this kind of perceived financial flexibility will test the fan base’s mettle regarding ownership’s ability or willingness to spend.

The internal budget is a delicate subject in Ottawa and rumours abound as to ownership’s ability to add significant salary to make this team better.

Despite Eugene Melnyk’s valiant repeated attempts to downplay the correlation between spending and winning, management types such as Bryan Murray and Cyril Leeder have attempted to assuage the fan base’s ire by maintaining that the money will be there down the road to take on more salary. To this point, it hasn’t happened – Ales Hemsky’s addition be damned.

The situation has created an environment in which there’s a regular public outcry for the organization to spend more money on the player budget, especially in the wake of their new television broadcast agreements.

No one should demand that the organization spend for the sake of it so that it can satiate a group of vocal fans who simply want to see the organization spend some money because of their own growing insecurities with the team or more specifically, having confidence in ownership to provide this organization with the resources necessary for them to be successful.

Forget the instant-gratification or buzz that comes from spending. Put a winning lineup on the ice and give the front office the best available resources that the organization can afford, that’s all that the fans want.

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