Is Bigger Better? An Examination of the Effects of Size on Performance and Compensation of NHL Goaltenders James Pantano Advisor: Professor Baumann December 8, 2012 Abstract: Following the 2004-2005 NHL lockout, rule changes limited the size of goaltending equipment. Despite these rule changes, the average save percentage and goals against average of NHL goaltenders continued to improve. The past decade has also seen a rise in the average height of both drafted and current NHL goaltenders. This paper investigates the effect of size on salary and on-ice performance of NHL goaltenders in order to test whether larger goaltenders have been substituted for smaller blocking surfaces. My estimations suggest that size positively affects on-ice performance in the post-lockout period, and that larger goaltenders are paid premiums for their size in the post-lockout period. 1 I. Introduction In place of the 2004-2005 National Hockey League (NHL) season, a lockout occurred because of disputes between the NHL and the NHL Players Association. After the lockout ended and prior to the 2005-2006 season, various rule changes were implemented to increase the pace and offensive aspects of the game. To create higher scoring games, the NHL focused on goaltenders, who in the seasons leading up to the lockout were performing more effectively than ever before in terms of both average save percentage and goals against. In an attempt to hinder the upward trend in goaltending performance, the NHL reduced the size and shape of nearly every piece of goaltending equipment, including gloves, blockers, sticks, chest protectors, pants, and most notably, leg pads, which were shrunk in width from 12 inches to 11 inches. Although goaltenders are noticeably less bulky since the 20032004 season, the average save percentage and goals against average of goaltenders continued to improve after the lockout.1 Needless to say, the NHL came up short in its attempts to limit goaltending performance, even though the post-lockout rule changes took away some of a goaltender’s ability to stop the puck by reducing the blocking surface of his equipment. These counterintuitive results raise the question: how have NHL goaltenders overcome, and conquered, the handicap incurred by the post-lockout rule changes? Goaltenders in the NHL have not only experienced an increase in save percentage, but in height as well. From the 2000-2001 season to the 2011-2012 season, the average height of goaltenders seeing 1,000 minutes or more playing 1 See Figures 1 and 2 in the Appendix. 2 time per season increased from 72.69 inches to 73.73 inches, with standard deviations of 1.99 inches and 1.42 inches, respectively. These numbers suggest that goaltenders have not only grown in past seasons, but also that they seem to be converging around a higher average height. In terms the relationship between height and save percentage, goaltenders in the bottom 10th percentile in terms of height (71 inches and below) had an average save percentage of 90.3%, while goaltenders in the top 10th percentile of height (75 inches and above) had an average save percentage of 90.9%. Given this height increase from season to season, and the seemingly higher save percentage of taller goaltenders compared to their shorter counterparts, does the size of a goaltender affect his on-ice performance after holding all other factors constant? I hypothesize the size of a goaltender affects his on ice performance in a positive way. Because of this reasoning, I also hypothesize that the size of a goaltender positively affects his annual salary, but it is unclear whether this size premium will remain after accounting for performance. General managers in the NHL appear to have noticed the relationship between height and on ice performance as well, given the increase in the average height of drafted goaltenders from approximately 72.5 inches in the 2000 entry draft, to 74.5 inches in the 2011 entry draft. Based on this trend, I identify whether NHL teams are efficient in their move toward bigger goaltenders by investigating the how the size of a goaltender affects his on-ice performance and annual salary. I find some evidence that height has a positive effect on save percentage. I also find that above and beyond on ice performance, there is some evidence that 3 height has a positive effect on player salary as well. Finally, I also find that height’s impact on both save percentage and salary is insignificant in the pre-lockout period, and significant the post lockout period, which suggests that NHL teams have substituted taller goalies for smaller pads. II. Literature Review The existent literature on this topic is in short supply. However, some related studies offer a few different approaches for my research. Miller (2008) investigates how the post-lockout rule changes affected productivity for larger players, measured in points per hour. Miller (2008) uses data from NHL.com for player statistics from the 2003-2004 and 2005-2006 NHL seasons, and HockeyDB.com for coaching statistics like games coached and winning percentage. Miller (2008) excludes players who do not meet the “rookie criterion” by removing players without a minimum of 25 games played from the data set in order to reduce outliers in the data. He uses a linear regression for each season, where points per hour is the dependent variable. The independent variables include height, position (forward or defenseman), coaching experience, coach’s winning percentage, and team winning percentage. He finds that height (measured in inches) has a significant effect in both seasons, with coefficients of .41 and .38 for the 03-04 and 05-06 seasons, respectively. Despite the small decrease in height’s influence on points per hour, Miller concludes that taller players are not hindered by the new rules in terms of their individual productivity, rejecting his hypothesis that height’s influence on productivity had lessened post-lockout. 4 Berri and Brook (2010) investigates the efficiency of the labor market for goaltenders in the NHL. In order to investigate the labor market for goaltenders, Berri and Brook run two regressions, one using the TOBIT model with Vezina votes (the award given to the best goaltender in the NHL each season based on votes by each team’s general manager) as the dependent variable, and the other with salary as the dependent variable. The independent variables for the Vezina regression include save percentage, goals against average, age, and minutes played. The independent variables for the salary regression include save percentage, last season’s save percentage, minutes played, minutes played last season, and age. The salary regression uses a log linear ordinary least squares model with a sample of goaltenders that were free agents in the period between the 2002-2003 and 20062007 seasons to avoid long-term contracts. They find age, minutes, and save percentage to have positive and significant effects on Vezina votes, and save percentage, last season’s save percentage, minutes played, minutes played last season, and age to have positive and significant effects on salary. Berri and Brook (2010) find that NHL general managers correctly identify save percentage, goals against average, and wins as significant performance measures, but they also find that there is a large variation in pay with respect to a low variation in performance, leading them to question general managers who pay more than the minimum salary for a goaltender. Berri and Brook (2010) provides a solid foundation in the methodology of researching the goaltending position, particularly in the choice of dependent, and independent variables. 5 Berri et al. (2005) looks at the competitive balance between both players and teams in professional sports. They note that “fan attendance in baseball is maximized when the probability of the home team winning is approximately 0.6”, and that when the probability of winning exceeds 0.6, attendance begins to decline.2 With the idea of maximizing team revenue in mind, Berri et al. (2005) focus on the National Basketball Association (NBA), which is found to have the highest level of competitive imbalance. The authors calculate competitive balance by dividing the actual standard deviation of team winning percentage by the ideal standard deviation of team winning percentage, which is derived from the ideal winning percentage of 60%. They hypothesize that the high level of competitive imbalance in the NBA comes from the varying height of the players. They argue that within a sport, there is initially a great difference in skill across the player population, which declines as time goes on and more players reach their “biomechanical limits”. In basketball, however, it is more difficult for players to reach their “biomechanical limits” because unlike in other sports where “training can overcome natural deficiencies in natural ability, speed, agility, and even weight”3, players cannot train themselves to be taller. This idea of biomechanical limits could possibly help to explain the trend of NHL teams acquiring larger goaltenders. If the effect of goaltender height is the same pre- and post-lockout, the idea of biomechanical limits, and not simply the reduction in equipment size, could be responsible for the growth of NHL goaltenders. III. Data 2 3 Journal of Economic Issues, Vol. XXXIX No. 4, pp 1030. Journal of Economic Issues, Vol. XXXIX No. 4, pp 1034. 6 Performance measures and other on-ice statistics are extremely important in testing the role of height in the goaltending position. NHL.com has up to date performance statistics for all of the players examined in this study, as well as their physical characteristics like height, weight, nationality, and amateur league. These data are publically available. Given that this study revolves around a popular professional sports league, most salary data are easily accessible, particularly because of the close attention paid to each teams adherence to the NHL’s salary cap. The salary data for this study are from USA Today’s website, which has salary data on the major professional sports leagues in the United States. USA Today has salary data on NHL players from the 2000-2001 seasons through the current season. Just as in Berri and Brook (2010), the data set is limited to goaltenders playing 1,000 minutes or more in each respective season. Goaltenders below 1,000 minutes of playing time are omitted in order to eliminate outliers within the data set caused by things like luck or “one game wonders”. This control allows for a much more accurate examination of starting goaltenders or goaltenders who split time but still play a substantial amount of minutes. The summary statistics in Table 1 offer a glance at the average NHL goaltender of the past 11 seasons. The average goaltender in the data is 29.14 years old, stands 6’1.7” tall, weighs 195.63 pounds, has a save percentage of .908, goals against average of 2.64, 2,638.07 minutes played per season, wins 21.6 games per season, and has a salary of $2,368,158. The three Major Junior Canadian leagues account for over half of the goaltenders in the sample, with the Quebec Major Junior 7 Hockey League (QMJHL), Ontario Hockey League (OHL), and Western Hockey League (WHL), contributing 23%, 15.7%, and 11.9% respectively. It is also interesting to note that the two predominant nationalities of goaltenders are American and Canadian, representing 15.2% and 49.1% of the goaltenders in the data set respectively. IV. Methods In order to evaluate the impact of height on the success of an NHL goaltender, Berri and Brook (2010) offer a good starting point. Measuring performance can be difficult with goaltenders given the interconnectedness of statistics like save percentage, goals against average, and wins. It makes sense that as goaltender’s save percentage rises, his goals against average falls and wins increases. To avoid this collinearity, Berri and Brook (2010) run separate regressions, one for each performance variable. The methods used in Miller (2008) can be applied directly to the methods used in Berri and Brook (2010) test pre- and post-lockout effects on NHL goaltenders. I test the three performance variables used by Berri and Brook (2010) to isolate the impact of height on save percentage, goals against average, and wins. I stray away from their use of Vezina votes as a measure of on-ice performance because only the top goaltenders receive votes for this award. There is also a degree of randomness in single season success, as a goaltender could have one stellar season and receive a great deal of Vezina votes in a career of otherwise below average play. Because only a small percentage of goaltenders receive Vezina votes, goaltenders like Tim Thomas of the Boston Bruins (who at 5’11” and 3 inches below 8 the average height of his peers has won the Vezina Trophy twice in the past 4 years), can skew the results of a test based on the Vezina Trophy, thus misrepresenting the population of NHL goaltenders as a whole. I use each of the performance variables as the dependent variable in their own respective regressions. I use height, weight, age, nationality, and amateur league as the independent variables for these regressions, any of which could have a possible impact on performance. I also use log-linear regressions for each performance variable, based on higher r-squared results compared to the linear model. I also use White Standard Errors to correct for heteroskedasticity. The first model gives a general idea of how size effects on ice performance over the entire sample of seasons 2000/2001 to 2011/2012. ln(Perfi) = ß0 + ß1 heighti + ß2 weighti + ß4 age + ß5 age squared + ß6 nationality + ß7 amatuer leaguei + ei Next, I identify any change in the effect of size from the pre-lockout period to the post-lockout period by running the same regression for each of the performance variables in the pre- and post-lockout periods. Pre-lockout (seasons 2000/2001 to 2003/2004): ln(Perfi) = ß0 + ß1 heighti + ß2 weighti + ß4 age + ß5 age squared + ß6 nationality + ß7 amatuer leaguei + ei 9 Post-lockout (seasons 2005/2006 to 2011/2012) ln(Perfi) = ß0 + ß1 heighti + ß2 weighti + ß4 age + ß5 age squared + ß6 nationality + ß7 amatuer leaguei + ei I test the impact of size on salary using similar methodology. I begin with a log-linear salary regression for seasons 2000-2001 through 2011-2012. A salary regression is run for each of the performance variables (save percentage, goals against average, and wins), where the respective performance variable is an independent variable. I use the performance variable from the prior season to estimate the salary of the current season. ln(Salaryi) = ß0 + ß1 Lagged Perfi + ß2 heighti + ß3 weighti + ß4 agei + ß5 age squaredi + ß6 nationalityi + ß7 amatuer leaguei + ei These regressions estimate the effect of size on salary over the entire sample of seasons. Similar to the strategy used above, I estimate pre-and post-lockout salary regressions as well. These estimations identify any changes in the effect of size on compensation from the pre- to post-lockout periods. Pre-lockout (seasons 2000/2001 to 2003/2004): ln(Salaryi) = ß0 + ß1 Lagged Perfi + ß2 heighti + ß3 weighti + ß4 agei + ß5 age squaredi + ß6 nationalityi + ß7 amatuer leaguei + ei 10 Post-lockout (seasons 2005/2006 to 2011/2012) ln(Salaryi) = ß0 + ß1 Lagged Perfi + ß2 heighti + ß3 weighti + ß4 agei + ß5 age squaredi + ß6 nationalityi + ß7 amatuer leaguei + ei V. Results Table 2 shows the results of the first regression, in which save percentage, goals against average, and wins are used as dependent variables across the entire 11 season sample. Height has a positive coefficient for each of the performance variables. However, it is only statistically significant in the save percentage regression, where its coefficient is .000821. When applied to the average goaltender in the sample, this coefficient translates to an increase in save percentage from .908 to about .912 for a five inch increase in height. Despite its statistical insignificance, it is also important to note that height’s positive coefficient in the goals against average regression translates to an increase in goals against average for an increase in height, which is obviously unfavorable. The contradictory effects of height on on-ice performance are resolved in the following test, where a regression is run for each performance variable for the period before and after the lockout as seen in Table 3. Here, the coefficients on height are positive in the save percentage regressions, and negative in the goals against regressions. The most important result of these regressions comes in the comparison of the save percentage regressions pre- and post-lockout. In the prelockout period, height has a positive, insignificant impact on save percentage. In the post-lockout period, however, the coefficient on height is .001622 and statistically significant at the 5% level. The magnitude of the post-lockout coefficient is nearly 11 double its counterparts in both the pooled season regression and the pre-lockout regressions. When interpreted, a five inch increase in height is estimated to increase the save percentage of the average goaltender from .908 to .915. The results of this regression provide some evidence that the role of height in goaltending performance is a post-lockout phenomenon. Table 4 shows the results of the salary regression for the entire 11 season sample. All performance variables are significant at the 1% level, reinforcing the idea that compensation of NHL goaltenders is strongly tied to how well they perform on the ice. Save percentage has a coefficient of 15.05, meaning that a one percentage point increase in save percentage is estimated to raise next year’s salary by 15.05%. In other words, the average goaltender in the sample is predicted to gain $356,351.89 in salary for every one percentage point increase in save percentage. Similarly, a reduction in goals against average by .1 goals is predicted to increase next year’s salary by 3.56%, or $84,188.02 for the average goaltender. For an increase of one win, next years salary is predicted to increase by 4.02%, or $95,436.77. Needless to say, small changes in on-ice performance have heavy impacts on compensation, but what about height? Table 4 also shows that the model predicts an average increase of about 5% in salary for each additional inch of height across the three performance regressions. These coefficients are statistically significant at the 5% level in both the goals against average and the wins regressions. Using the goals against average regression as an example, a one inch increase in height is predicted to increase salary by 6.111%, or $144,718.13. It is important to note that performance controls 12 are included in the salary regressions, which suggests that apart from height’s effect on on-ice performance, taller goaltenders are predicted to be paid a premium purely for their height advantage. The results in Table 5 solidify the importance of the three performance variables in determining salary, as well as providing further evidence that goaltender’s pay may change simply based on height. In the pre- and post-lockout salary regressions, each of the performance variables experiences an increase in the magnitude of its coefficient in the post-lockout period, suggesting that on-ice performance has a greater impact on salary after the lockout than compared to before. Save percentage experiences the biggest increase in its coefficient, growing from .127 to .164 in the post-lockout period.4 Height also experiences growth in its coefficient from the pre- to post-lockout periods, suggesting a rise in the impact of height in determining salary. Height is significant in the post-lockout salary regression even though the wins performance variable is used. Its coefficient is .0558 and predicts that a one inch increase in height will increase salary by 5.58% or $1,32143.22 for the average goaltender in the sample. It should be said that weight has an inconsistent impact on both performance and salary regressions and is largely insignificant. Age has an overall positive impact on both performance and salary, and is significant in most regressions. The results for both nationality and amateur league dummy variables are inconsistent throughout the tests, and are furthermore difficult to interpret given the large number of nationalities and amateur leagues in the data. Coefficients are divided by 100 because save percentage is measured in decimals and not percents. 4 13 VI. Conclusion From the results of both the performance and salary regressions, I find evidence that the size of a goaltender positively affects both his on-ice performance and compensation. With that being said, it appears as though height had a greater impact on both the dependent variables in the post-lockout period. Because the coefficients on height both increase in magnitude and statistical significance in the post-lockout period, I find that there is evidence that smaller goaltenders are being substituted for bigger ones in the NHL, due in part to a bigger goaltender’s ability to make up for the reduction in equipment size post-lockout. More specifically, I find evidence that height has a positive and significant impact on save percentage in the post-lockout period. This finding provides support for the tendency of NHL general managers to gravitate toward taller goaltenders in both the entry draft and composing the roster their teams, as they have accurately identified that taller goaltenders tend to stop more pucks and give their teams a better chance to win than their shorter counterparts, holding all else constant. I also find evidence of an inefficiency in the market for NHL goaltenders. There is weak evidence that beyond a goaltender’s on-ice performance, premiums are paid to taller goaltenders simply because of their size. This idea is particularly interesting because it allows for a possible exploitation of the inefficiency. While NHL general managers correctly expect taller goaltenders to perform better on the ice, my estimates find that they are overpaying for height. This inefficiency begins in the entry draft, where future potential, rather than current skill, is heavily emphasized. NHL general managers should recognize that height’s positive impact 14 on performance, but should not pay the taller goaltender more money for the same on-ice performance. If NHL general mangers can identify this inefficiency, they could obtain shorter, high caliber goaltenders for a cheaper price. Identifying this inefficiency is especially important given salary cap restrictions, where paying one player more money means paying another player less. Appendix Figure 1: average save percentage per season 15 Figure 2: average goals against average per season Table 1: Summary Statistics Salary Mean 2,368,158 Standard Deviation 2,045,068 Minimum 350,000 Maximum 10,000,000 16 Save Percentage Goals Against Average Wins Height Weight Age Minutes Played Nationality USA Canada Russia Sweden Finland Czech Republic France Latvia Switzerland Slovakia South Africa Kazakhstan Amateur League QMJHL OHL WHL USNTDP USHL SWEDEN RUSSIA SWISS FINLAND OPJHL HIGH-USA FRANCE CZECH MJHL OJHL NAHL CZREP CIS .908 2.639 21.595 73.1657 195.632 29.142 2638.071 .012 .400 10.766 1.727 15.685 4.445 1023.563 .860 1.56 2 67 161 19 1003 .94 3.98 48 78 235 43 4697 .152 .491 .038 .058 .094 .061 .012 .012 .031 .017 .013 .019 .359 .500 .192 .233 .292 .240 .107 .107 .172 .130 .115 .137 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 .230 .157 .119 .019 .027 .058 .038 .031 .083 .035 .040 .012 .025 .011 .025 .013 0.23 .050 .421 .365 .324 .137 .162 .233 .192 .172 .275 .182 .197 .107 .156 .107 .156 .115 .421 .312 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Table 2: Performance Regression (all seasons 2000-2011) 17 Height Weight Age Age Squared R-squared Ln(svper) .000821*** (.000468) .0000193 (.0000448) .00202 (.00157) -.0000352 (.0000259) .1031 Ln(gaa) .00616 (.00545) -0.000863 (.000549) -.0388** (.0180) .000659** (.000299) .118 Ln(w) .000409 (.0221) .00189 (.002055) .136*** (.0734) -.002165*** (.00119) .136 * Statistically significant at the 1% level. ** Statistically significant at the 5% level. *** Statistically significant at the 10% level. Table 3: Performance Regressions (Pre- and Post-lockout) Height Weight Age Age Squared R-squared Ln(svper) Pre-2004 .000742 (.000801) -.0000079 (.0000652) .00247 (.003458) -.000334 (.0000581) .255 Ln(svper) Post-2004 .00162** (.000758) .00000489 (.0000654) .00202 (.00210) -.0000347 (.0000348) .173 Ln(gaa) Pre-2004 -.00510 (.00978) .000327 (.000809) .120* (.0387) .00185* (.000655) .335 Ln(gaa) Post-2004 -.00207 (.00805) -.00109 (.000753) -.0344 (.02315) .000565 (.000387) .157 Ln(w) Pre-2004 .0565 (.0416) -.00482 (.00335) .598* (.159) -.00951* (.00273) .328 Ln(w) Post-2004 -.0497 (.0311) .00423 (.00298) -.0138 (.0815) -.0000545 (.00132) .138 * Statistically significant at the 1% level. ** Statistically significant at the 5% level. *** Statistically significant at the 10% level. Table 4: Salary Regressions (all seasons 2000-2011) Save Percentage Ln(salary) 15.0476* Ln(salary) Ln(salary) 18 (lagged) Goals Against Average (Lagged) Wins (Lagged) Height Weight Age Age Squared R-squared (3.299) -.356* (.0937) .0424 (.0259) .00221 (.00254) .420* (.0911) -.00600* (.001478) .396 .0611** (.0266) .00136 (.00255) .399* (.0912) -.00565* (.00148) .382 .0403* (.00260) .0460** (.0223) .000579 (.00218) .354* (.0771) -.00509* (.00127) .594 * Statistically significant at the 1% level. ** Statistically significant at the 5% level. *** Statistically significant at the 10% level. Table 5: Salary Regressions (Pre- and Post-lockout) Save Percentage (Lagged) Goals Against Average (Lagged) Wins (Lagged) Height Weight Age Age Squared R-squared Ln(salary) Pre-2004 12.655** (5.602) .0217 (.0371) -.00102 (.00472) .283 (.233) -.00266 (.00385) .695 Ln(salary) Post-2004 16.431* (4.137) .0341 (.0401) .00124 (.00340) .220** (.10688) -.00307*** (.00173) .381 Ln(salary) Pre-2004 Ln(salary) Post-2004 -.384** (.183) -.416* (.110) .0285 (.0396) -.00106 (.00486) .136 (.218) -.000262 (.00356) .692 .0534 (.0408) .000192 (.00345) .208** (.10575) -.00293*** (.00171) .371 Ln(salary) Pre-2004 .0341* (.00619) -.00281 (.0398) .001825 (.00422) -.0967 (.1735) .00322 (.00289) .768 * Statistically significant at the 1% level. ** Statistically significant at the 5% level. *** Statistically significant at the 10% level. Works Cited Miller, Gregory J. 2008. Does Player Size Affect Productivity in the ‘New NHL’?. West Chester University, West Chester, PA. 19 Ln(salary) Post-2004 .0405* (.00336) .0558*** (.0313) -.00187 (.00284) .239** (.0920) -.00338** (.00150) .574 Berri, David J., Stacey L. Brook, Bernd Frick, Aju J. Fenn, and Roverto VicenteMayoral. 2005. The Short Supply of Tall People: Competitive Imbalance in the National Basketball Association. Journal of Economic Issues XXXIX (December): 1029-41. Berri, Davd J., and Stacey L. Brook. 2010. On the Evaluation of the ‘Most Important’ Position in Professional Sports. Journal of Sports Economics 11 (April): 157171). 20