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April 2014

Jesse Kaufman
Shucen Ai
Ashton Addison
Supervisor: David Dobson
Cl i nchi ng the cup:
Dri vers of NHL Pl ayer Sal ari es
Table of Contents

Executive Summary 3
Introduction 4
Analysis 7
Do Olympians Earn a Higher NHL Salary than Non-Olympians? 7
Do Olympians win more Stanley Cups than Non-Olympians? 9
Do Canadians Earn a Higher Salary than Americans in the NHL? 11
Does the NHL Team One Plays for Affect Ones Salary? 13
Does The Number of Games Played Affect Salary? 16
Does Handedness Affect an NHL Players Salary? 19
Does Handedness Affect Points Per Game (PPG)? 22
Determining the Salary of an NHL Player 24
Determining the Salary of an NHL Player 27
Conclusions 29
Glossary 30
References 31
Appendix 32
Executive Summary

NHL players are some of the worlds highest paid athletes. With salaries ranging from $400000
to $14000000, it is difcult to initially understand the dynamics behind the wide range of values.
The factors driving NHL player salaries are complex. Through statistical signicance testing this
report attempts to uncover the truth behind the salaries of NHL puck handlers.

After completing many tests, nine key ndings were chosen to be reported. Tests revealed that
Canadian players do not earn a higher salary than American players. With 52% of the NHL
comprised of Canadian athletes, this was a surprising nding. Olympic status was explored as a
factor inuencing salary. It was discovered that Olympians earn a signicantly higher salary than
non-Olympian players. In addition to a higher salary, Olympians win more Stanley Cups than
non-Olympians. In order to demonstrate the affect of salary cap on player salaries, it was found
that the team one plays for is not a signicant factor. Number of games played (experience)
was found to be a signicant factor, but was limited. To better understand exactly which factors
had the most affect on players average annual salary, a correlation coefcient test was
performed. The results showed that the amount of points players got per game was the most
signicant, followed by total career points and career games played. Further research showed a
high correlation between points per game and total career points variable, removing it from the
equation and leaving us with a multiple linear regression equation of annual average salary =
-568,839.2 + 6,037,650.3(Points Per Game) + 1944.1(Career Games Played). With an R^2
value of 0.655, this equation best explained salaries of the sample of 50 players.

The driving factors of NHL player salaries are key in understanding the business of hockey. This
report attempts to reveal the truth behind the earnings and provide insight well beyond the ice.
#3 Drivers of NHL Player Salary
Introduction

While enjoying NHL hockey is a staple of North American culture, many have not explored the
complexities surrounding the salary of players they know so well. Hundreds of millions of dollars
are spent every year to secure the worlds most talented puck handlers. The story behind the
numbers is as astounding as the earnings the players take home.
$
This research uses sample data from fty NHL players from the 2012-2013 shortened season in
order to analyze the variables which affect the annual average salary of the population of NHL
players. The data was gathered from players of three randomly selected NHL teams: Pittsburgh
Penguins, Chicago Blackhawks, and Toronto Maple Leafs. The players statistical data is
courtesy of the NHL and CapGeek, both credible sources in reporting player data.
$
The salaries of players are limited by a salary cap, the total fund allowance to each team based
on the leagues total revue from the previous season. This is unique to the NHL. The league
salary cap for the 2012 - 2013 season was set at $60 million per team, however teams could
spend up to $70.2 million as the funds were pro-rated for the shortened season (TSN, 2013, pg.
1). The salary cap prevents teams in larger markets from signing a disproportionate amount of
top players to eliminate any advantage over small-market franchises.

Many queries regarding player salaries and their determining factors have been explored in our
research as well as examination of players factors in success.

Research Objectives

1. Do Olympians earn a higher NHL salary than non-Olympians?
2. Do Olympians win more Stanley Cups than non-Olympians?
#4 Drivers of NHL Player Salary
3. Do Canadians earn a higher salary than Americans in the NHL?
4. Does the NHL team one plays for affect ones salary?
5. Does the number of games played affect salary?
6. Does handedness affect an NHL players salary?
7. Does handedness affect points per game (PPG)?
8. How does one determine the salary of an NHL player? (Simple Linear Regression)
9. How does one determine the salary of an NHL player? (Multiple Linear Regression)

Research Limitations

With limited resources and time, our research does not reach its full potential. Without access to
players, variable data collected was limited to secondary sources. A limited sample size of fty
NHL players, due to time constraints on data entry, provides less accurate results. Goalies are
not included in this research as the factors that determine their salaries are much.

Team Background
$
The 3 teams randomly chosen all have a relative strong roster of players as all 3 teams made it
into the 2012-13 Stanley Cup Playoffs.

The Chicago Blackhawks nished their regular season with 77 points at the top of the Western
Conference, and nished number one in the League. After clinching the 2012-13 Presidents
Trophy, which is awarded to the team who gets the most points out of every team for the regular
season, they went on to win the Stanley Cup for the second time in 3 years. This is extremely
rare in the modern day NHL.

#5 Drivers of NHL Player Salary
The Toronto Maple Leafs nished their regular season with 57 points, 4 teams behind Pittsburgh
in Eastern Conference. This shortened season was the rst time they had made it to the playoffs
since 2004. They made it to the nal game of round one series but lost their lead to the Boston
Bruins in the last 5 minutes of the game crushing their hopes of a Stanley Cup. They last won
the cup in 1967.
$
The Pittsburgh Penguins nished their regular season with 72 points at the top of the Eastern
Conference and were second place in the league standings with only Chicago ahead of them.
They made it to the eastern nals before being eliminated by the Boston Bruins, who were then
eliminated by the Chicago Blackhawks to win the cup. They last won the cup in 2009.
#6 Drivers of NHL Player Salary
Analysis
Do Olympians Earn a Higher NHL Salary than Non-Olympians?
Two-Independent-Sample-T-Test

Introduction

The Olympic winter games gather the globes most talented hockey players. These puck
handlers are often NHL superstars proudly representing their country. Does participation in the
Olympic winter games signal a higher salary in the NHL? Of our sample of 50 players, 18 are
Olympians.

Methods

By analyzing and comparing the mean salaries of Olympic and non-Olympic players in our
sample of 50 using a 2-Sample-T-Test, one can calculate the signicance of the difference. We
treat the Olympic and non-Olympic players independently and assume equal variances.

Analysis

%1 = Mean salary of Olympians
%2 = Mean salary of non-Olympians
Ho: %1 < %2
Ha: %1 > %2
95% Level of Signicance &=0.05 (one-tail test)
DF = 48
Critical T = 1.68
T-Statistic: 5.321042
P-Value: 0.000003

#7 Drivers of NHL Player Salary

With a p-value of 0.000003 < 0.05, the probability of a result more extreme than this is very low.
Reject the null hypothesis because there is evidence to suggest that the NHL salaries of
Olympians are signicantly higher than non-Olympians.

Conclusion

While non-Olympians contribute massively to the success of any NHL team, the data shows that
NHL players who are also Olympians make signicantly higher salaries than their non-Olympian
counterparts.
Olympians Non-Olympians
n (sample size) 18 players 32 players
x# (sample mean) $5293518.50 $2520391.69
S (standard deviation) $2038999.99 $1601528.70
#8 Drivers of NHL Player Salary
Do Olympians win more Stanley Cups than Non-Olympians?
Two-Independent-Sample-T-Test

Introduction

Does living the Olympic dream on the rink translate into winning more Stanley Cups? Craig
Adams of the Pittsburgh Penguins has won 2 Stanley Cups and has participated in 2 Winter
Olympic games. Brandon Sutter of the Penguins contradicts this, participating in 2 Olympics and
with 0 Stanley Cups to show. If Olympians make a higher salary, shouldnt they be winning more
Stanley Cups to justify it?

Methods

A 2-Sample-T-Test is appropriate in analyzing these two variables and will calculate if a
difference in means exists. We assume equal variances and normality.

Analysis

%1 = Mean number of Stanley Cups from Olympians
%2 = Mean number of Stanley Cups from non-Olympians
Ho: %1 < %2
Ha: %1 > %2
95% Level of Signicance &=0.05 (one-tail test)
DF = 48
Critical T = 1.68
T-Statistics: 2.1403
P-Value: 0.0187
95% Condence Interval: 0.0285 ' %1 - %2 ' 0.9115

#9 Drivers of NHL Player Salary

With a p-value of 0.0187 < 0.05, the probability of a result more extreme than this is very low.
Reject the null hypothesis because there is evidence to suggest there is a signicant difference
between the mean number of Stanley Cups won by Olympians and non-Olympians.

Conclusion

After the analysis of our 50 players, we conclude it is statistically signicant that Olympians win
more Stanley Cups on average than non-Olympians. Justifying their higher salary, Olympians
bring something special to NHL ice that translates into winning the most important trophy in
hockey.
Olympians Non-Olympians
n (sample size) 18 players 32 players
x# (sample mean) 1.06 Stanley Cups 0.59 Stanley Cups
S (standard deviation) 0.873 0.665
#10 Drivers of NHL Player Salary
Do Canadians Earn a Higher Salary than Americans in the NHL?
Two-Independent-Sample-T-Test

Introduction

The great hockey rivalry between Canadians and Americans lives on after gold medal wins in
Sochi and Vancouver at the Olympic games. While both nations have a great love of the game,
do Canadian NHL players earn more to bring back home?

Methods

A 2-Sample-T-Test is appropriate in analyzing these two variables and will calculate if a
difference in means exists. We assume equal variances and normality.

Analysis

%1 = Mean salary of Canadian NHL players
%2 = Mean salary of American NHL players
Ho: %1 < %2
Ha: %1 > %2
95% Level of Signicance &=0.05 (one-tailed test)
DF = 36
Critical T = 1.6883
T-Statistic = 0.5203
P-Value = 0.3030
95% Condence Interval: -1230604.376416 ' %1 - %2 ' 2079804.194598

Canadians Americans
n (sample size) 27 players 11 players
x# (sample mean) $3759600 $3335000
#11 Drivers of NHL Player Salary

With a p-value of 0.3030 > 0.05, the probability of a result more extreme than this is very low.
Do not reject the null hypothesis because there is no evidence to suggest there is a signicant
difference between the mean salary of Canadian and American NHL players.

Conclusion

While the great rivalry continues on the ice and in the stands, there is no evidence to suggest
that Canadian NHL players take home a bigger salary than American NHL players.
S (standard deviation) $2238394 $2390471
Canadians Americans
#12 Drivers of NHL Player Salary
Does the NHL Team One Plays for Affect Ones Salary?
One-Way-ANOVA

Introduction

While many teams bring in substantially higher revenues than others in the league, a salary cap
is in place to prevent wealthy teams from purchasing the most talented players and to save
costs for the league. This NHL policy answers part of the research question but does not
conrm how less wealthy teams pay their players.

Methods

A One-Way-ANOVA test will discover if the team one plays is a factor in determining an NHL
players salary. We assume equal variances and normality.

Analysis
$
%1 = Mean salary of Pittsburgh Penguin players.
%2 = Mean salary of Chicago Blackhawk players.
%3 = Mean salary of Toronto Maple Leafs players.
Ho: %1 = %2 = %3
Ha: Not all % are equal.
95% Level of Signicance &=0.05
Homogeneity: 0.6013
Levene: 0.2926

Team Mean Difference Std. Error Sig. 95% Condence Interval
Lower Bound Upper Bound
Pittsburgh Chicago 85543.35 705997.805 0.99 -1623057.20 1794143.90
#13 Drivers of NHL Player Salary

Because the Levene test does not provide signicant evidence to reject the null hypothesis, we
can assume equal variances. The signicance of every comparison shows no evidence to reject
the null hypothesis. The six 95% condence intervals all contain 0, providing further evidence
supporting null hypothesis. Do not reject Ho.

Conclusion

Toronto -702581.65 864667.191 0.70 -2795181.42 1390018.12
Chicago Pittsburgh -85543.35 705997.805 0.99 -1794143.90 1623057.20
Toronto -788125.00 864667.191 0.64 -2880724.77 1304474.77
Toronto Pittsburgh 702581.65 864667.191 0.70 -1390018.12 2795181.42
Chicago 788125.00 864667.191 0.64 -1304474.77 2880724.77
Team Mean Difference Std. Error Sig. 95% Condence Interval
Lower Bound Upper Bound
#14 Drivers of NHL Player Salary
Although players are paid differently for other factors, there is no evidence to suggest that the
team one plays for effects salary within the NHL.
#15 Drivers of NHL Player Salary
Does The Number of Games Played Affect Salary?
One-Way-ANOVA

Introduction

With experience comes wisdom. Are players who are getting long in the tooth earning a higher
salary? Although more experienced players may have the strategic advantage over young
entrants, with more games comes age, and with age comes decreased athletic ability.

Methods

A One-Way-ANOVA test will uncover the truth behind number of games played and salary.

Analysis

%1 = Mean salary of players with <250 games experience.
%2 = Mean salary of players with 250-499 games experience.
%3 = Mean salary of players with 500+ games experience.
Ho: %1 = %2 = %3
Ha: Not all % are equal.
95% Level of Signicance &=0.05
Homogeneity: 0.4998
Levene: 3.5503

Career Games Mean Difference Std. Error Sig. 95% Condence Interval
Lower Bound Upper Bound
<250 250-499 -2517115.02 730811.357 0.003 -4285767.39 -748462.65
500+ -3290381.51 718710.995 0.000 -5029749.53 -1551013.48
250-499 <250 2517115.02 730811.357 0.003 748462.65 4285767.39
500+ -773266.48 592279.413 0.399 -2206654.70 660121.73
#16 Drivers of NHL Player Salary

Because the Levene test does not provide signicant evidence to reject the null hypothesis, we
can assume equal variances. The signicance of many of the comparisons shows evidence to
reject the null hypothesis. Four of the 95% condence intervals contain 0, providing further
evidence to reject the null hypothesis. Reject Ho.

Conclusion

A difference in salary exists between players who are more experienced from those who have
fewer games under their belt. Specically players who have less than 250 games experience
had signicantly lower salaries. Players with 250-499 games experience had signicantly higher
salaries than those players with less than 250 games experience but no signicant difference
500+ <250 3290381.51 718710.995 0.000 1551013.48 5029749.53
250-499 773266.48 592279.413 0.399 -660121.73 2206654.70
Career Games Mean Difference Std. Error Sig. 95% Condence Interval
Lower Bound Upper Bound
#17 Drivers of NHL Player Salary
existed between their salary and players with more than 500 games experience. Similarly
players who have over 500 games experience earn a signicantly higher salary than those with
less than 250 games experience. One can condently conclude that experience is one of the
many factors driving salaries of NHL players.
#18 Drivers of NHL Player Salary
Does Handedness Affect an NHL Players Salary?
Chi-Square and Crosstab

Introduction

There is no disagreement that all NHL players have immense skill, but questions remain
regarding salary differences between left and right-handed players. Research by Kilshaw &
Annett (1983) supports the conclusion that left-handers have an absolute advantage over right-
handers visuo-motor speed (p. 253). By grouping salary into three groups of paid less than
$2.5 million, paid more than $2.5 and less than or equal to $4.9 million, and paid more than $4.9
million one can perform a proportion test on the salaries of left-handed and right-handed NHL
players.

Methods

A chi-square crosstabulation will determine the proportional difference between left-handed and
right-handed NHL players. By dividing salary into three reasonable sections that represent low,
medium, and high salary players this is made possible. Through the Marascuilo Procedure
signicant differences can be found.

Analysis

Ho: Uniform distribution
Ha: Not uniform distribution
95% Level of Signicance &=0.05
Crosstabulation
Career Games Annual Salary
Less than $2.5m $2.5m-$4.99m $5m+ Total
ShootsLR L 8 15 9 32
R 10 3 5 18
#19 Drivers of NHL Player Salary


Total 18 18 14 50
Career Games Annual Salary
Less than $2.5m $2.5m-$4.99m $5m+ Total
Chi-Square Test
Value DF Asymp. Sig. (2-sided)
Pearson Chi-Square 5.908a 2 0.052
Likelihood Ratio 6.142 2 0.046
Linear-by-Linear Association 1.702 1 0.192
N of Valid Cases 50
Marascuilo Procedure
Pairwise Comparison Absolute difference in Proportion Critical Range
Group 1 to Group 2 0.389 0.356
Group 1 to Group 3 0.198 0.422
Group 2 to Group 3 0.191 0.378
X2 = 5.908289 P1 = 8/18 = 0.4444 P2 = 15/18 = 0.8333 P3 = 9/14 = 0.6429
#20 Drivers of NHL Player Salary
Categorized Player Percentage By Salary
%

O
f

P
l
a
y
e
r
s
0
15
30
45
60
Left-Handed Right-Handed
28% 28%
17%
47%
56%
25%
< 2.5m 2.5-4.9m 5m +
Conclusion

At the 0.05 level of signicance, we can conclude that there is a signicant difference in salary
for left and right handed players for the categories of < 2.5m and 2.5-4.9m. By comparing the
absolute differences to the critical range, one can observe that group 1 to group 2 is signicantly
different (0.3889>0.3559).
#21 Drivers of NHL Player Salary
Does Handedness Affect Points Per Game (PPG)?
Chi-Square and Crosstab

Introduction

The data shows that some left-handed players earn a higher salary than their right-handed
counterparts, but is that salary truly deserved? The amount of points scored per game is a
powerful measure of an individuals success on the rink.

Methods

A chi-square crosstabulation will determine the proportional difference between left-handed and
right-handed NHL players. Through the Marascuilo Procedure signicant differences between
each group can be found.

Analysis

Ho: Uniform distribution
Ha: Not uniform distribution
95% Level of Signicance &=0.05


Crosstabulation - 2
Career Games Points Per Game (PPG)
0.4 0.4-0.62 0.62 + Total
ShootsLR L 11 11 10 32
R 6 8 4 18
Total 17 19 14 50
Chi-Square Test - 2
Value DF Asymp. Sig. (2-sided)
Pearson Chi-Square .646a 2 0.724
Likelihood Ratio 0.652 2 0.722
#22 Drivers of NHL Player Salary


Conclusion

At the 0.05 level of signicance, we can conclude that there is no signicant difference between
left and right handed players in points per game. This goes against Kilshaws research
regarding the absolute advantage of left handed individuals in visio-motor skills which is
surprising.
Linear-by-Linear Association 0.117 1 0.733
N of Valid Cases 50
Value DF Asymp. Sig. (2-sided)
Marascuilo Procedure - 2
Pairwise Comparison Absolute difference in Proportion Critical Range
Group 1 to Group 2 0.068 0.397
Group 1 to Group 3 0.067 0.410
Group 2 to Group 3 0.135 0.405
X2 = 0.6464 P1 = 0.0134337 P2 = 0.0128298 P3 = 0.0145772
#23 Drivers of NHL Player Salary
Categorized Player Count By PPG
%

O
f

P
l
a
y
e
r
s
0%
12.5%
25%
37.5%
50%
Left-Handed Right-Handed
23%
32%
44%
34%
33%
34%
< 0.4 0.4-0.62 0.62 +
Determining the Salary of an NHL Player
Simple Linear Regression

Introduction

While many NHL teams have strong defensive positions, goal scoring remains the highest
priority. Teams value players who consistently create points, further edging the team towards the
Stanley Cup. Through analyzing the relative inputs of the variables selected, one can observe
that PPG (points per game) has the strongest linear relationship to salary. A model will be
produced that can serve as a predictor for salary.

Methods

Simple linear regression.

Analysis

#24 Drivers of NHL Player Salary
Relative Input to Salary
PPG
Total Career Points
Career Games Played
No. of Stanley Cups Won
Career Penalty Minutes
Years in League
Player Age
Player Weight
Player Height (in.)
Team Win%
-0.2 0 0.2 0.4 0.6 0.8
Correlation Coefcient
5% Level of Signicance &=0.05
DF1 = 1
DF2 = 48
F & = 4.04


Simple linear regression model: y = B0 + B1x
Salary = Intercept + Points Per Game (X)
Coefcient of determination: R-Square = 0.436
Multicollinearity is not a problem as the variance ination factor is 1.000 for the independent
variable.

Assumptions

1. Individual values of error terms are statistically independent from one another and these
values represent a random sample from the population of possible error values at each level
of x.
2. For each value of x, there can exists many values of y, and therefore many value of e. The
distribution of possible e-values for any x-value is normal.
3. Distribution of possible e-values have equal variance for all the values of x.
4. The means of the dependent variable, y, for all specied value of x can be connected with a
line called the population regression model.

Conclusion

The model output by the regression analysis is as follows:
Pearson Correlation Average Annual Salary Points Per Game
Average Annual Salary 1.000 0.661
Points Per Game 0.661 1.000
#25 Drivers of NHL Player Salary

Annual Average Salary = -48,458.29 + 1,838,750.33(PPG)

With a p-value of 0.000, we can conclude this regression model is signicant, and can be used
to determine salaries of players throughout the NHL.
#26 Drivers of NHL Player Salary
Determining the Salary of an NHL Player
Multiple Linear Regression

Introduction

Previous analysis has shown the number of NHL career games played and points per game
produced truly affect salary. To further utilize the data collected, a multiple linear regression
equation will create an accurate prediction of the populations salary.

Methods

Multiple linear regression analysis.

Analysis

95% Level of Signicance &=0.05$
DF1 = 2
DF2 = 47
F& = 3.20


Multiple linear regression model: y = B0 + B1x +B2x
Salary = Intercept + Point Per Game(X1) + Career Games Played(X2)
Multiple coefcient of determination: R-Square = 0.655
Multicollinearity is not a problem as the variance ination factor is 1.065 for both independent
variables.

Assumptions
Pearson Correlation Average Annual Salary Points Per Game
Career Games
Played
Average Annual Salary 1.000 0.773 0.423
Points Per Game 0.773 1.000 0.248
Career Games Played 0.423 0.248 1.000
#27 Drivers of NHL Player Salary

1. Individual values of error terms are statistically independent from one another and these
values represent a random sample from the population of possible error values at each level
of x.
2. For each value of x, there can exists many values of y, and therefore many value of e. The
distribution of possible e-values for any x-value is normal.
3. Distribution of possible e-values have equal variance for all the values of x.
4. The means of the dependent variable, y, for all specied value of x can be connected with a
line called the population regression model.

Conclusion

The model output by the regression analysis is as follows:

Annual Average Salary = -568,839.2 + 6,037,650.3(PPG) + 1944.116(Career Games Played)

With a p-value of 0.000, we can conclude this regression model is signicant, and can be used
to determine salaries of players throughout the NHL.
#28 Drivers of NHL Player Salary
Conclusions

After analysis of data, a clear understanding of the drivers of NHL player salaries has emerged.
Points per game and career games played have been veried as reliable predictors of players
annual average salary through multiple linear regression. The emergence of handedness as
being an insignicant factor is an intriguing development which raises further questions
regarding the reasons why. Although it was additionally discovered that left-handed have an
advantage in visio-motor skills (Kilshaw,1983, pg.193), the conicting conclusion with our data
mysterious.

As fans, players, and researchers this analysis provides intriguing evidence towards the quest
of determining the signicant drivers of an NHL players salary.
#29 Drivers of NHL Player Salary
Glossary

Salary cap
The total fund allowance to each team based on the leagues total revue from the previous
season.

Visio-motor speed
The connection between visual and motor processes.

PPG
Total goals and assists accumulated by a player divided by the number of games played.

#30 Drivers of NHL Player Salary
References

CapGeek. (n.d.). CapGeek.com. CapGeek.com - The denitive source for NHL salaries, salary
cap data and player contracts. Retrieved April 3, 2014, from http://www.capgeek.com/

Kilshaw, D., & Annett, M. (1983). Right-and left-hand skill I: Effects of age, sex and hand
preference showing superior skill in left-handers. British Journal Of Psychology, 74(2),
253.

NHL. (n.d.). 2012-2013 - Regular Season - All Skaters - Summary - Points - NHL.com - Stats.
2012-2013 - Regular Season - All Skaters - Summary - Points - NHL.com - Stats.
Retrieved April 3, 2014, from http://www.nhl.com/ice/playerstats

TSN. (2013, January 7). NHL and NHLPA reach tentative deal on new CBA. TSN Sports.
Retrieved April 3, 2014, from http://www.tsn.ca/nhl/story/?id=412844

#31 Drivers of NHL Player Salary
Appendix
#32 Drivers of NHL Player Salary

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