What determines Salary for New Jersey Devils Forwards?

How do hockey players get paid? This is a question that almost every fan has thought about at some point. Sure forwards get paid to score goals and assist on those goals; defensemen get paid to defend the opposing team's forwards, and of course the goalie gets paid for how many shots he can keep from hitting twine. We measure these skills with statistics like goals, assists, save percentage, and the awful plus-minus stat.

The question then becomes if each team values those skills equally. Clearly, each team has a little different method in evaluating these player's skill sets. Otherwise, every team would offer a certain player the same exact contract, all else equal. For instance, does every team appreciate the defensive abilities of Zach Parise at equal levels? Most likely Lou Lamoriello values them a little more than other GM's because he is known for defense. Therefore, Parise will get paid for different aspects of his game by different GM's.

Since this is a blog that praises Lou with its name, let's try and figure out how Lou compensates players for their skill set. I looked at every New Jersey Devil to play at least 15 games for the organization from 2007 to 2012. Then I limited it down to only forwards (Left Wing, Center, and Right Wing). I did this because forwards get paid differently then defenseman and goalies. Also, I deflated the salaries to the value of the dollar in 1990, so inflation is not a factor. I then used player statistics from nhl.com, behindthenet.ca, and salary statistics from USA today's website in order to make my data set. After the jump I'll explain my findings.

Technical Details (skip if you dislike statistical jargon):

I used Regression Analysis in order to find a link between salary, points, goals, assists, shooting percentage, and corsi. I used OLS and the regression was:

log(salary) = Goals per Game, Primary Assists per Game, Secondary Assists per Game, Points per Game, Shooting Percentage, Relative Corsi, and a dummy variable in order to capture if a player was a center.

Every variable was significant at the 15% level of significant, except for shooting percentage and secondary assists. The Durbin Watson stat was between 1.6 and 1.8 for each regression, proving no serial correlation. I used EViews 7 to run the data.

Findings:

I first looked at how well goals, primary and secondary assists per game affect salary. I found that goals and primary assists were important, but secondary assists had no effect on salary. For every goal per game, a Devil's salary will increase by 122%. I also found that for every primary assist per game, a player's salary will increase 51%. However, I found this regression only explains 30% of total salary. Therefore, I looked at some other variables to see if I could explain more.


The next equation looked at points per game, relative corsi, shooting percentage, and whether or not that forward was a center. I found points per game increased salary by 95%. This combines all goals and assists, so it would make sense that it fell between the 122% and 51% from the previous regression. Shooting percentage was insignificant, meaning that the Devils organization doesn't compensate players who have a higher shooting percentage than other players. Players who were centers made about 35% more than wingers, when they are at the same skill level. Finally, the Devils actually consider a player's relative corsi when compensating him. For those of you who don't know what corsi is by now, it is a measure of possession. For each one point increase in corsi, a player will get paid 1.3% more. This seems insignificant, but if you increase your relative corsi by ten, you will get paid 13% more. So for those of you who are on the fence about corsi being accepted by NHL organizations, it does have a slight effect on salaries, at least in the Devils organization. One more thing, this equation explained 47% of a Devil's salary.


Finally, I ran one more regression which was the same as the last regression, except it uses goals and primary assists rather than points per game. This time I found that being a center increases salary by 36% over wingers, and again, shooting percentage had no effect on salary. For every goal per game more, a Devil's forward will get paid 144% more. This seems high, but how many players do you know scoring a goal a game at the NHL level? For every primary assists per game, a forwards salary will increase by 70%. This regression also found relative corsi to be significant, at 1.7%. This is slightly larger than the last regression, but still at the same magnitude. This equation explained almost 59% of salary for a New Jersey Devils forward.

Below I laid out a table that shows each equation and which determinants that I tested have a significant impact:

Salary_determinants_medium

The take away from this article is that we can take a glimpse at what the Devils organization values and does not value. Personally, I would think that possession is worth more than being a center. I would also think that defenseman might get paid a little more for corsi than forwards. But this analysis does not include defensemen.

This article was a little quantitative, but it shows exactly what Lou is willing to pay for. I hope you enjoyed it even though it was a little technical. If you have any questions about the method or details, feel free to ask in the comments. Does this sound right in your mind, or would you allocate money for different skills? Do you have any statistics I should add that you think Lou pays for? Thanks for reading!

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