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07-16-2004, 08:27 PM
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David A. Rainer
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New Article Discussion: Dollars and Sense

Discuss the article "Dollars and Sense: A Look at Youth Development and the Risk to Labor" here in this thread.

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07-17-2004, 02:21 AM
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My article didn't last very long. Only a couple of hours in and it already pushed off the top spot on the Kings page. :lol

Oh well! Such is the Crosby phenomenon.


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07-17-2004, 05:44 AM
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Quote:
Originally Posted by DeathFromAbove
My article didn't last very long. Only a couple of hours in and it already pushed off the top spot on the Kings page. :lol

Oh well! Such is the Crosby phenomenon.
Well, to be quite honest Dave, there isn't too much to talk about here. This is one of the most thorough and articulate articles I have ever read about the business side of hockey. I don't think there is a single conclusion that you reached that I don't totally agree with.

The area of "windfall" is the exact reason why I want us to rebuild ie; drafting in the top five. As your draft position rises your probability for a greater "windfall" player increases, and after you have consistently picked from the top, you will begin to see more and more success as franchise without shelling out top dollar. Until ultimately, said franchise has pooled enough playoff monies, season seats(though this doesn't necessarily apply to New Jersey) and memorabilia revenue to afford re-sign their homegrown talent and or make a splash into the free agent pool.

Quote:
The ability to absorb risk increases in proportion to a firmís resources is a basic principle of economics. The more available resources a firm has, the more likely it is willing to accept risky investments in pursuit of the higher profit percentage.
This is also a big part of what I was speaking of; as a benefit of drafting low, and well (the well part is the key ) As the team has built it's prospect resources(Got to give DT credit on this for sure) they are able to take on those higher risk/reward type of players. This is a big reason(pun intended) why I was a big fan of the Boyle pick. We had depth in our prospect ranks, and this afforded us the opportunity to take what could turn out to be one of the most dominant players in the entire draft.

We've all seen teams like New Jersey(Foster), Detroit(Kronwall), Ottawa(Hossa) and Colorado(Parker) come out and take players that there are unknown or have some risk associated with them. Of course, the moves don't always work out, but when they do, they usually work out well.

I'm a bit tired of typing and in general, so that's where I'm going to leave off for now.

Great work again Dave! I guess there was more to talk about than I thought.

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07-17-2004, 11:33 AM
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Great to get some discussion on going about this. You are right on with your analysis Legion.

I see what you are saying with Boyle and I agree with your reasons for taking him. However, I disagree that the Kings had the prospect depth to take him or that it was a draft that would necessitate taking him. I think the Kings depth has come a LONG way since what it was when DT took over. But I still don't think it is deep enough to start taking risks in the first round. Especially in a deep draft as 2003 was. If the draft is weak, then go ahead an take a risk because, since it is a weak draft, you probably can't find a better player at 26 anyway. But when the draft is strong and deep, there are great players everywhere, so why take a risk if you don't NEED to.

However, with that said, an organization has to trust in themselves and their ability to scout. If their scouts were telling DT that Boyle is the REAL DEAL and that they have to take him then they should take him. As I am not privy to what was said about him behind closed doors, I don't know which way it went. So my feeling is: if they believed him to be a project from the get-go, why risk it? If they believed him to be something special, then go ahead and take him.

BTW - this is only Part I of a four part article.


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07-17-2004, 11:51 AM
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But back to the original topic at hand...

As some of you know, my primary sport is baseball - that is the sport I know the most about both in how it is played, how it should be played, the way organizations are structured, and the way prospects are developed. In this particular instance, I saw a close resemblance to baseball and the importance of farm systems.

The CBA is slightly different in baseball than hockey, but the same basic framework is there. In baseball, a player is either not a free agent or subject to arbitration for at least the first 6 years of his MLB career. And if you get a very productive player from year 1 (as in Pujols), the windfall is tremendous. This is one of the things that Beane recognizes - there are economic incentives in the CBA to do things a certain way, so why not do it that way! He drafts college players because they are (i.) statistically less risky, even if statistically less spectacular; and (ii.) more productive earlier in their careers, even if their careers don't match those drafted out of high school. This allows him to receive a greater windfall of value before they reach their UFA status and hit the bricks.

Similarly, the NHL CBA provides all kinds of incentives do draft and develop youth. Hell, there already is a salary cap in the NHL - it's for entry level players! Why not take advantage of the incentives instead of just viewing it as a side-note to the process. NJ and Colorado has done this perfectly. Hell, not only is NJ a well stocked team, but they have drafted several other allstars playing for other teams right now. Players you probably didn't know they drafted, like Rolston and Guerin (there are about 5 or 6 more, but those are the only two I can think of right now). They are excellent at it and they are reaping all the rewards. Even if you don't have a roster spot for a prospect, you make room for him by trading someone (even if he is an allstar) while at the peak of their value, get good prospects in return, and open up a spot for your up-and-coming prospect. But that only works if (i.) you have a prospect pushing his way into the NHL; and (ii.) you drafted well enough for that prospect to be an adequate alternative.

So, as with Beane, it is a revolving door of plugging in TOP prospects to replace players about ready to win big as a RFA or UFA that have been traded away for other prospects. It is less costly, less risky, but will only work with a great scouting department. Say what you will about Anshutz and Roski, they did sink a lot of money into the scouting and development department and it will pay off in about 5 years. Beane convinced the A's owner to do this when he took over and Ted Turner did this with the Braves about 15 years ago and they are perennial contenders (in fact, the Braves have had a Top 5 farm system for as far back as I can remeber, even drafting near the bottom each year).

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07-17-2004, 06:30 PM
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fantastic article. you should really consider submitting it to the economist or some other publication. three questions, for anyone who wants to chime in, not just our esteemed kings writer:

1. what, in your opinion, are the kings doing poorly with regards to drafting, prospect development, etc?

2. has this formula been the goal of many franchises over the past 10 to 15 years and only colorado and new jersey were really able to pull it off? or have teams been trying to do this all along, and its actually much harder than it sounds? i guess this also leads to the question, how difficult is this going to be for the kings?

3. if this practice becomes widespread (if its not already), will this in turn help drive down salaries of older players, regardless of what the cba looks like?

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07-18-2004, 01:18 AM
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Quote:
Originally Posted by DeathFromAbove
Great to get some discussion on going about this. You are right on with your analysis Legion.

I see what you are saying with Boyle and I agree with your reasons for taking him. However, I disagree that the Kings had the prospect depth to take him or that it was a draft that would necessitate taking him. I think the Kings depth has come a LONG way since what it was when DT took over. But I still don't think it is deep enough to start taking risks in the first round. Especially in a deep draft as 2003 was. If the draft is weak, then go ahead an take a risk because, since it is a weak draft, you probably can't find a better player at 26 anyway. But when the draft is strong and deep, there are great players everywhere, so why take a risk if you don't NEED to.

However, with that said, an organization has to trust in themselves and their ability to scout. If their scouts were telling DT that Boyle is the REAL DEAL and that they have to take him then they should take him. As I am not privy to what was said about him behind closed doors, I don't know which way it went. So my feeling is: if they believed him to be a project from the get-go, why risk it? If they believed him to be something special, then go ahead and take him.

BTW - this is only Part I of a four part article.
I think both questions you already answered yourself. What do we really know about how the Kings feel about their depth or their picks? Perhaps Taylor and Al Murray really felt that we were stocked. At the time we had Aulin as well as Anshakov, and hadn't seen much of any of our other prospects.

Or maybe, they felt that Boyle was the best player available regardless of who was on the board. Yes, right now passing on certain players such as O'Sullivan seems like a bad move, but who knows if they felt that while he might have a great junior career, who wouldn't amount to much as an NHL'er

The only time we ever really get any insight into this is either during prospect camp, or when KJ or someone scores a sweet interview. That's the hard part of being a fan; you never really know what is going on. Try as we might to speculate, grade and analyze their moves, the bottom line is that we don't get to see the players play as much, nor are we privy to the organizations plans regarding both prospect and roster players.

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07-20-2004, 11:25 AM
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Quote:
Originally Posted by navigator
1. what, in your opinion, are the kings doing poorly with regards to drafting, prospect development, etc?

2. has this formula been the goal of many franchises over the past 10 to 15 years and only colorado and new jersey were really able to pull it off? or have teams been trying to do this all along, and its actually much harder than it sounds? i guess this also leads to the question, how difficult is this going to be for the kings?

3. if this practice becomes widespread (if its not already), will this in turn help drive down salaries of older players, regardless of what the cba looks like?
1. Since the mid 90's, the team has been on a quest to find the next Keith Primeau. And I think they are going to unusual lengths to find one, even where one is not there. They seem to overvalue size (I like good sized players, but I don't necessarily need hulking giants at all costs). It's a high risk/high reward style that I don't like in the Kings situation. Also, the team seems to like drafting the "flavor of the month" european player - the player that comes out of no where to shine at the WJCs (Juntunen, Karlsson, Pushkarev). But that is not to say that I think they have been drafting poorly, just some a couple of things I think they could have done differently.

2. I think it was started by the Detroit (in the mid 80's), New Jersey, Colorado and Dallas (when they were Minnesota). But because the sports industry is results oriented and every league (not ust baseball) is a copy-cat league, it took someone winning the Cup on a consistent basis using this new model before anyone paid any attention. Before the '94 Marlins, who bought themselves a World Series, no one thought of just outspending the next guy (even the Yankees). After they showed that you could win by purchasing a free agent team, the race was one to buy a World Series. Likewise, once Colorado, NJ, et al showed that they could win a Cup thru internal building, a lot of teams started switching to the new model (the Kings, Vancouver, Montreal, etc.). As I always say, where there is success, there is immulation.

3. The short answer - maybe. As more and more teams start looking internally first, the prices of free agents will begin to decline as there is less demand for their services. However, if the price gets too low, it might become economically efficient to start paying for free agent veterans and so the price will start to climb again. Ultimately, it would come to some sort of equilibrium (assuming there are no other outside forces on the market, which there almost always are). However, free agency is often a security blanket for teams/GMs that do not develop their own players as well as the rest (e.g. Rangers). So they can fall back on the free agent market to make up for their inability to draft and develop. These sort of GMs will keep the market high. In summation - the more teams that draft and develop well, the lower the market for free agents, the more teams that fail at doing this, the high the market. But by how much? It'll depend.

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07-24-2004, 01:35 PM
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