Thursday, November 3, 2011

Bloomberg Businessweek FTW

Flames are in a tough spot, gang.

They get worked by the Canucks on their home ice, so are expected to put in a good effort. Detroit has lost 5 games in a row.

If the Flames win the attitude is 'well, they bloody well should have after their performance in their last game' but us non-believers can shrug and say that the Flames caught Detroit while they playing badly.

Almost no win, really.

Anyways, that little situation aside, we had a quick little chart we found in 'Bloomberg Businessweek' to show ya'll.

You know how it is our contention that a large factor in the teams suck is the bad management? Wanna see some ammunition?

Well, click that 'Bloomberg Businessweek' link for the full chart. It's their attempt at an efficiency measure as it pertains to performance measured against spending. We direct you to the link first before charting because their chart includes every major sports team in North America (which is interesting to take a look at) and our chart will be hockey team related.

Anyways, here is the methodology:

"A general manager’s job is to turn payroll dollars into wins. We’ve run the numbers on the last five NHL, MLB, NBA, and NFL seasons to see who’s done it best—by winning often, spending little, or (sometimes) both.

Our method: By culling player payroll data from reported sources and pairing them with wins and losses over the last five completed seasons, we calculated an average cost per win in each league. Based on that number, we measured (by standard deviation) how far each team varied above or below the league norm. The result is a cross-sport rating of how every U.S. franchise compares to its peers in squeezing wins from money. We call it the Efficiency Index."

We call it 'ammunition'. Anyways:

(It is hard to read, just give it a click.)

And just for shits and kicks, averages!

Average Cost Per Win: $1.185.333.33
Average Wins Per Season: 41
Average Number Of Playoff Performances: 2.67, which we round down to 2 to be kind to the home team.

Obviously this chart requires some context; nobody who actually loves what is good about sports would try to argue that Wang is a good owner (Islanders). But from a business perspective, it's arguable he might be at least operating in a prudent fashion: he doesn't win a lot, but at the same time he doesn't spend a lot of money (relatively speaking).

This chart penalizes precisely the opposite behaviour: paying a lot of money for a team that isn't very good. Which is why you will find, maybe predictably, the teams that occupy the bottom of this list are the Oilers, the Flyers, the Rangers, the Maple Leafs, and the Flames. Teams that spend a lot of money, almost as much as the cap allowed in the preceding five years, and hovered around the bottom of the playoff spots, or in the Oilers and the Maple Leafs case, didn't even make the dance at all. And while we should also point out that indeed the Flyers made it to the Finals in the last five years, they have perennially been seen as a Cup contending team since the lockout ended, and the results have rarely been commensurate with the expectations.

We will end on this point: In a way, this chart shows us the power of expectations can have on how clubs operate. You will no doubt notice that, very generally speaking, the teams that rank high on this list have fanbases who don't expect to win, demand to win, as intensely as the teams on the bottom of this list. We could infer that the fervour for victory compels teams to spend money they otherwise wouldn't in an attempt to keep up with the arms race, and in an attempt to try and convince the teams customers that the team is indeed trying to compete and win.

If that is the case, if ownership in certain markets feel compelled to make the resources available to their teams managers because of market pressures, then it would seem to be in their best interest to try and identify and then acquire the managers who are best able to efficiently allocate resources. San Jose would be an example of this type of approach to running a club.

 If this chart has any value, it is in the fact that it shows the person who is managing the Calgary Flames, Ken King, does not seem to be a great allocator of the above average amount of resources he is allowed to allocate by the team owners. It would seem obvious to us that the team should try and upgrade in that department. Targeting executives from the Predators, the Sharks, the Red Wings, and the Ducks would seem to be a prudent course of action with this club moving forward into an offseason where it has the potential to remake and rebuild itself fairly quickly.

Furthermore, I think Peter Loubardias Ken King should be fired.


  1. I heard Ken King signed some magic beans to a 20 year, cap-max contract.

    But the beans don't play center.

  2. I would include Vancouver and Pittsburgh in the list of executive hunting grounds, as those teams are up there with SJS and DET in terms of average wins per season.


  3. Under Sutter, Flames went from spending about $500k per marginal win to just under $1.1 in the course of 7 seasons.

    That precipitous drop in efficiency netted them zero playoffs series wins and of zero new, elite pieces to the roster.

  4. @ Beeker

    Half a good point: Im too much of a partisan to want Vancouver execs in here, but you are right on Pittsburgh

    @ Kent

    Exactly: I could care less if they spent more money to win. But it's the spending more money to lose that gets me, and is a sign, at least to me, of bad management. It's great that the team has money to spend, now we need to find someone who is able to spend it wisely.

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