Lately (and by lately, I mean for a very long time) I have noticed people on PPP making claims as to what various players are worth, in terms of $MM. Some of these claims seem modest and reasonable. For example, it was recently suggested that Schenn was worth somewhere between $3 and $3.5MM (were he to get a pay raise from the Leafs this year). At the same time, it’s frequently suggested that Brett Lebda should readily be exchanged for an infamous bag of pucks that seems to circulate the league every so often.
These numbers seem a little strange to me, and generally fall into two categories: either the reflect someone's estimation of market value (how this is determined is complicated and will be discussed shortly) or they reflect someone's valuation based on statistics. I have concerns about both approaches.
My concern with the statistic-based approach is that we don’t have well-established stats that explicitly detail a player’s value to a team. GVT is an interesting attempt at such a stat, and is an impressive one as well, but is far from fool-proof. The reality is that in hockey, there aren’t the kind of position-independent value stats like there are in baseball. Hopefully, this will soon change, but we are not there yet. (Not to mention the fact that I rarely see people justify their player valuations with GVT numbers.)
The other, market-based approach makes more immediate sense. Regardless of how a player will contribute to your team, if he is worth so much ($xMM) to other teams, then he can (ideally) be moved for those assets. On this model, if you thought you had a better valuation model than other teams, you could (ideally) really improve your team by acquiring contracts that are in demand, and shipping them for more valuable (by your model) assets. This, unfortunately, seems to be where the logic ends. Despite the fact that it rarely seems like people can back up their player valuations with league-wide contract data (i.e. how many players at the same position are paid that amount, who they are, etc…) there is the deeper problem that there isn’t an obvious way to group player contracts. We can group them by stats, but then we fall into the same problem as above. Without a good metric for comparing players of all positions in terms of their contribution to a win, we cannot establish the notion of "comparable players", and consequently, cannot determine who would pay what amount for what player. In other words, if we don’t have a way to evaluate the product, we can’t determine what an equivalent product would earn on the open market, because we don’t know what an equivalent product would look like.
The best way around this last problem would be to determine how each individual GM valued players, what weight they gave to individual stats, etc… This is probably something real GMs spend time doing, though I obviously can’t know for sure. What I can know is that this assuredly isn’t something we bloggers spend a whole lot of time doing. So I’m left wondering where these numbers come from.
Given the foregoing, and given the fact that I can name more current Leafs that are either over-performing or under-performing their current contracts, I put the question to you, PPP enthusiasts: how do you determine player value?
Note 1: Re. the over-performing/under-performing thing: clearly it’s only an issue of poor valuation when someone under-performs, and this only when they do it consistently. I wouldn’t chalk up Clarke MacArthur’s contract to poor asset valuation, but rather shrewd management and blind luck. The point stands, however, that it seems that GMs get it wrong enough to call the whole valuation method into question, which is all I’m doing here.
Note 2: This is my first real fanpost, so any and all comments are welcome/invited. It’s usually easy to tell a good fanpost from a bad one, but infinitely more difficult to tell if your own is any good, so feedback is gold.