Rookie Contract Structure

[St. Louis Sting]

As some of you know from our conversations on Slack, I have at different times thought about the idea of eliminating the standardized rookie contract based on where that player was drafted and replace that system with a merit-based system similar to MLB arbitration. I had not put too much effort into how that would actually be implemented until multiple owners said that they liked the idea, so over the past few days I've been thinking through different solutions and I believe I have one (or at least the outline of one) that would work. What follows here will be a fairly in depth review of my process and calculations for how this would be implemented. If you don't really care about the nitty-gritty details and trust that the math works (it does) you can just comment regarding your preference between the existing standardized contract structure or a performance-based structure. If you actually want to know how I arrived at the proposal and the details please keep reading.



To this point I have only worked through NHL, though the same logic would apply to NBA and MLB (NFL will be different, but easier, since it is points-based). I used the concept of Z-Scores, which calculates a player's relative value in each statistic compared to all other players in the league. A Z-Score can be positive for strong performers or negative for weak performers in each stat. I calculated the Z-Score for each category that we use in our league (G, A, +/-, PIM, SOG, STP, HIT, BLOCK) for every player using full, league-wide stats. I then summed the Z-Scores of all statistics for each player to arrive at their Individual Total Value. Attached is that excel spreadsheet so you can get an idea for yourself: Hockey Z.xlsx (748.74 KB)

I then sorted the players by Individual Total Value from highest to lowest by position. Positions were determined by their listed position on hockey-reference, not Fantrax. If players were listed in multiple positions or a general position (Forward) their position was determined by their position on Fantrax. If listed on multiple positions at Fantrax, their position was based on whatever was listed first. This created a ranking of most-to-least valuable player by position.

After running multiple scenarios, I determined that a standardized starting salary for all rookies of $3 would be ideal. Players would received the following raises based on their performance according to the aforementioned rankings:

C/LW/RW
Tier 1 player (ranked 1-6): Salary + (Salary x 100%)
Tier 2 player (ranked 7-12): Salary + (Salary x 90%)
Tier 3 player (ranked 13-18): Salary + (Salary x 80%)
Tier 4 player (ranked 19-24): Salary + (Salary x 70%)
Tier 5 player (ranked 25-30): Salary + (Salary x 60%)
Tier 6 player (ranked 31-36): Salary + (Salary x 50%)
Tier 7 player (ranked 37-42): Salary + (Salary x 40%)
Tier 8 player (ranked 43-48): Salary + (Salary x 30%)
Tier 9 player (ranked 59-54): Salary + (Salary x 20%)
Tier 10 player (ranked 55-60): Salary + (Salary x 10%)
Tier 11 player (all others): Salary + $2

D
Tier 1 player (ranked 1-6): Salary + (Salary x 100%)
Tier 2 player (ranked 7-12): Salary + (Salary x 90%)
Tier 3 player (ranked 13-18): Salary + (Salary x 80%)
Tier 4 player (ranked 19-24): Salary + (Salary x 70%)
Tier 5 player (ranked 25-32): Salary + (Salary x 60%)
Tier 6 player (ranked 33-40): Salary + (Salary x 50%)
Tier 7 player (ranked 41-50): Salary + (Salary x 40%)
Tier 8 player (ranked 51-60): Salary + (Salary x 30%)
Tier 9 player (ranked 61-72): Salary + (Salary x 20%)
Tier 10 player (ranked 73-84): Salary + (Salary x 10%)
Tier 11 player (all others): Salary + $2

G
Tier 1 player (ranked 1-4): Salary + (Salary x 100%)
Tier 2 player (ranked 5-8): Salary + (Salary x 90%)
Tier 3 player (ranked 9-12): Salary + (Salary x 80%)
Tier 4 player (ranked 13-16): Salary + (Salary x 70%)
Tier 5 player (ranked 17-20): Salary + (Salary x 60%)
Tier 6 player (ranked 21-24): Salary + (Salary x 50%)
Tier 7 player (ranked 25-28): Salary + (Salary x 40%)
Tier 8 player (ranked 29-32): Salary + (Salary x 30%)
Tier 9 player (ranked 33-36): Salary + (Salary x 20%)
Tier 10 player (ranked 37-40): Salary + (Salary x 10%)
Tier 11 player (all others): Salary + $2

All arbitration raises would be rounded up to the nearest whole dollar, and there is a minimum raise of $2 per contract year regardless of ranking in the previous year.

Example: an arbitration eligible Center with a present salary of $12 and who is ranked as a Tier 2 player in his category is awarded a raise of 90% of his present salary or $10.9 so that his new salary is $23.

All drafted players would have the same 5 year control period from the season they are first promoted, and would still be eligible for Restricted Free Agency based on their final salary. Arbitration eligible players can still be non-tendered in the offseason with no salary retention obligation in present or future seasons, or cut in mid-season and only have retained salary in the present season.


I hope this at least makes some sense, but please ask any questions you may have. At this stage the most important part is for me to get a feel on whether people generally prefer the existing rookie contract structure or would prefer a performance-based structure. Thank you for any input!

[DC Patriots]

So, questions for clarity. If we are starting at $3, using the Forward formula, a tier 1 guy would end up being $3 + $3x100% (or $3 + $3), so $6? But the tier 10 dude would be a $1 increase? And the tier 11 dude would be a $2 increase? Or basically, everyone from tier 3 down, regardless, would be a $2 increase that first year, and the major separation on salary would be in later years, assuming the player continues to rank among the top tiers?

So the same situation in a year 2 (for salary in year 3) would put a player who was in tier 1 both years at $12, and the tier 11 at $7, with variability depending?

And then the absolute maximums would be $3, $6, $12, $24, $48? And the minimums would be $3, $5, $7, $9, $11?

How would this affect RFA? Would it still be the same scale? Seems heavy-handed on salary if someone who could make $48 in year 5 to be offered a even a minimal deal under the current structure ($58) or especially a max deal ($68). Maybe a player entering year 4 could be offered some kind of a short-term extension that buys out years 4 and 5 and one RFA season to keep costs down and allow for an extra year of club control while losing the two extra RFA seasons (making them an UFA)? Not to overcomplicate it, but an additional formula based on past years tier rankings? Just a thought.

Sorry, lots of questions to confirm I understand and check my math. I think it's an awesome idea and an interesting structure. Thanks for taking all the time to pull the data, I hope it was an easily pulled spreadsheet and not manual input!

[St. Louis Sting]

Dec 7, 2020 5:19:24 GMT -5 DC Patriots said:

So, questions for clarity. If we are starting at $3, using the Forward formula, a tier 1 guy would end up being $3 + $3x100% (or $3 + $3), so $6? But the tier 10 dude would be a $1 increase? And the tier 11 dude would be a $2 increase? Or basically, everyone from tier 3 down, regardless, would be a $2 increase that first year, and the major separation on salary would be in later years, assuming the player continues to rank among the top tiers?

So the same situation in a year 2 (for salary in year 3) would put a player who was in tier 1 both years at $12, and the tier 11 at $7, with variability depending?

And then the absolute maximums would be $3, $6, $12, $24, $48? And the minimums would be $3, $5, $7, $9, $11?

How would this affect RFA? Would it still be the same scale? Seems heavy-handed on salary if someone who could make $48 in year 5 to be offered a even a minimal deal under the current structure ($58) or especially a max deal ($68). Maybe a player entering year 4 could be offered some kind of a short-term extension that buys out years 4 and 5 and one RFA season to keep costs down and allow for an extra year of club control while losing the two extra RFA seasons (making them an UFA)? Not to overcomplicate it, but an additional formula based on past years tier rankings? Just a thought.

Sorry, lots of questions to confirm I understand and check my math. I think it's an awesome idea and an interesting structure. Thanks for taking all the time to pull the data, I hope it was an easily pulled spreadsheet and not manual input!

Hockey-reference is a wonderful thing lol. Easy to export the Excel sheet, then just had to put create the Z-score formulas. Would have been a hell of a lot easier if I paid more attention in high school computers class instead of playing games. But, on the bright side, I got a lot better Excel this weekend!

Anyways, everything you said there is correct. All players, regardless of tier, have a minimum $2 salary escalation. For the first 2-3 years most rookies would have pretty similar salaries, with the variability coming in later years as players separate themselves from the pack. You are also correct regarding the maximums and minimums over the 5 year window. I know the $48 seems extremely high, though it is highly unlikely that any players perform at a top-6 level at their position from years 1-5. Eichel, Matthews, Laine, Aho, Marner, etc didn't or wouldn't have done it. I believe only Connor McDavid would have been close, but even he didn't due to injury his rookie year. Perhaps in order to combat the possibility of this happening we could implement a "maximum" that a player can earn in year 5? Just spit-balling.

I do also like the idea of offering extensions as you mentioned. That could also help reduce the Year 5 salary to be more manageable, and then forfeit RFA rights to get the player to UFA sooner. Something for me to think about. Thanks for the input!

[Las Vegas Strips]

I think if there is a 5th year cap....maybe $40...than I am fully on board with the proposal. Also am a proponent of being able to extend players to buy out RFA years. Once a player is extended, if could officially end their "rookie contract" so you couldn't do a free drop. This would allow people to keep their great players, but also take a risk of not being able to drop them at no cost....

I'd be curious to see how many players would have hit the maximum in the other sports...

Appreciate the amount of time you put into doing this

[Clayhounds Dawgs]

Looks like a lot more work on Sting part. I would prefer the existing rookie contract structure as I'm, make it simple for us slow folks, but will adjust if that's what is decide by the league.

[Jeff (Haze)]

I was told there would be no math.

I'm in an insane NHL league, much like the MLB league I'm in with the Sting. We have a system in which NHL prospects basically have 2 way contracts. There are certain eligibility requirements and secondary tagging that can be lost or re-earned over seasons. It's a little complicated, but I think it's far superior to the "you've played X games, welcome to the big leagues, kid" system we have here in which you may have a potential star on your hands, but are forced into paying a contract for a player that's not 'fantasy ready' yet.

Haven't had a chance to process all of the above yet, but wanted to get that in there since it seemed NHL-centric.

[DC Patriots]

I wonder about weighting for positions as well. Some clearly more valuable positions. Should QBs be weighted the same as DEs? And 1B the same as C?