Evaluating Nordic Drafting – A Potential Market Inefficiency

Over the last decade, teams have taken significant steps to improve their NHL entry draft approach. To do this, a number of teams have bolstered their analytics staff to identify the current “gaps” in prospect scouting. Whether it’s the Detroit Red Wings being the first team to dive head first into drafting Russian players, and then later Swedish players, or the Tampa Bay Lightning prioritizing small, skilled forwards, teams are looking for any available edge. More recently, the Pittsburgh Penguins have put a premium on overage players, as Namita Nandakumar found that overage players make the NHL faster. What’s the next big market inefficiency?

Over the last 30 years, globalization of the NHL has led to kids all over the world taking up hockey. Sweden and Finland, relative to their population, have produced numerous high quality NHL players and have experienced success in international competition. Finland has won the gold medal at three of the last six U-20 World Junior Championships, two of the last four U-18 World Junior Championships, and are the current IIHF World Championships defending champions. Not far behind, Sweden has won three of the last six IIHF World Championships.

Despite their recent success at the international level, Nordic players are picked later and less frequently than their North American counterparts:

Over the last 15 years, more players have been picked from the OHL in the 1st round than players from the top Finnish junior league (Jr. A SM-liiga) in any round. Furthermore, less than 20 percent of skaters taken in rounds 1-3 are from Sweden or Finland. Teams being more willing to draft these players in later rounds. Why is that? Despite their international success, teams haven’t utilized more of their picks on players from the top Nordic leagues. Is there a particular reason for that, or have teams simply missed out on a potential opportunity? First, we have to answer a few questions:

  1. Do these leagues produce similar quality players when compared to players from the CHL and US?
  2. Do players from these leagues make the league at a similar rate to players from the CHL and US?
  3. Are there enough eligible players from these leagues to have a market inefficiency?

To answer the first question, I collected all draft data going back to 2005 (beginning of the modern-day, seven-round draft) from Hockey-Reference. To assess quality of the player, I utilized Hockey-Reference’s Point Shares. Point Shares provide an estimate of the expected number of standings points that are contributed by a particular player. While not perfect, Point Shares are easily interpretable and are one of the few value metrics that allow for comparisons between skaters and goaltenders.

Using all draft picks between 2005-2014, I calculated the median point share for forwards and defensemen drafted from the CHL, USHL, USNTDP as well as the top Nordic professional and junior leagues. I plotted the median (black line) against all individual observations for each league:

Despite the fact that players from Sweden and Finland are taken in later rounds and less frequently, it appears as if they still produce players of similar quality to those drafted from North America. First and foremost, if a first-year, draft-eligible player makes it to the top league in Finland (Liiga) or Sweden (SHL), they should be held in high regard given how their predecessors have performed. Defensemen drafted from the SuperElit league appear to be of similar quality to those drafted from the USHL, slightly better than those from the QMJHL and slightly worse than those from the OHL and WHL. Forwards from the SuperElit league again appear similar to those from the USHL, slightly better than those from the WHL and USNTDP, and slightly worse than those from the OHL. The lack of players drafted from the top Finnish junior league makes it harder to assess overall quality but it certainly does not appear as if there is a significant gap in quality.

The next major consideration for teams drafting from these leagues is understanding what their development timeline might look like. Similar to drafting overagers, if a team with a closing championship window knows that a player might make it to the NHL more quickly, that could influence their decision to draft that player. To evaluate development timelines for each league, I used Evan Oppenheimer’s elite package for R to collect all playing seasons across all leagues for players drafted between 2005 and 2014. I then grouped skaters by position (F vs D) and draft round (Rounds 1-3 vs Rounds 4-7) to identify if players from certain leagues were more likely to make the NHL (defined as the first season where NHL GP exceeded GP in any other league) relative to where they were picked. Finally, I used the survminer package to plot the cumulative probability of a player making the NHL in each of his first seven post-draft seasons.

Forwards and defensemen selected in rounds 1-3 from the top Swedish professional leagues (SHL, Allsvenskan, Division-1) and Finnish league (Liiga) appear to make it to the NHL earlier and more frequently relative to their North American counterparts. This makes sense as these are professional leagues and the players are likely more “ready” to transition to the NHL. However, it’s important to note that the overall number of players selected from these leagues in early rounds is small, with only 11 players taken from Liiga and 32 players taken from the SHL, Allsvenskan, or Division-1.

Shifting gears to the junior leagues, it’s important again to state that our sample size is small. Only eight players were taken from Jr. A SM-liiga (two defensemen) and 38 from SuperElit. Given the relatively small number for the Jr. A SM-liiga, I’ll reserve making a statement of significance regarding their timelines or success rates. With respect to SuperElit, players appear to make it to the NHL later and at a slightly lower rate compared to their North American counterparts.

Rounds 4-7 tell a slightly different story. Once again, players making the top professional leagues appear to make the NHL earlier and at a more frequent rate. Interestingly, the SuperElit places ~20% of defensemen and ~25% of forwards in the NHL within seven years, a rate that is slightly better than that of the North American leagues. Jr. A SM-liiga on the other hand had zero of twelve defensemen drafted make the NHL but had ~20% of forwards make the NHL.

It’s evident that the Swedish and Finnish professional leagues produce higher caliber players that make the NHL faster and more frequently relative to the North American leagues. Notably, it appears as if the SuperElit league is not far behind the CHL and may actually produce players providing more bang for your buck in the later rounds. Given this finding, one could make the argument that more players from the top Nordic professional and junior leagues should be drafted and drafted earlier. This leaves us with our final question – are there enough eligible players from these leagues to actually have a market inefficiency?

Using data from Corsica.hockey, I identified all draft-eligible players in the 2017, 2018, and 2019 drafts. From there, I looked to see the percentage of players drafted from each league in each respective draft:

On average, the CHL has had ~8-10 percent of eligible players drafted. As the USHL and USDP have gotten stronger, they’ve had a higher percentage of eligible players drafted, with nearly 15 percent of eligible players being drafted this past year. Additionally, NHL teams appear clued in to the benefits of drafting from the Nordic professional leagues, although less than 10 percent of eligible Swedish professional players were drafted this past season. However, NHL teams haven’t really dived into the Swedish and Finnish junior leagues with less than 5 percent of eligible players being drafted from these leagues. Still, some teams have made a conscious effort in the past three years to draft from this region.

The Sabres lead the way, having used 50 percent of their draft picks on players training in Sweden or Finland. Other notable teams on this list include Detroit, who for years has mined Sweden for potential gems, and Carolina which is attempting to relocate the country of Finland to Raleigh, North Carolina one draft pick at a time. While there’s certainly an opportunity for improvement right now, this isn’t an inefficiency that’s going to last long. Eventually teams will start scouting and drafting from these leagues more frequently to the point that we shouldn’t expect substantial production differences in a player selected from Sweden/Finland versus North America. As of now, it seems as if we’re still a few years away from that and as such, there’s a market inefficiency to be had.

So, how should we use this information? If I were to explain this to a general manager, I’d offer up the following pieces of advice:

  1. Build up your scouting department in Sweden and Finland, with more emphasis on the SuperElit and Jr. A SM-liiga. With less than five percent of eligible players being drafted, there may be dozens of gems out there that are currently being missed. Additionally, start looking for other leagues that are producing larger numbers of draft-eligible players. Switzerland and Germany stand out to me as the next two potential gold mines.
  2. We seem to be pretty good at scouting North America, in terms of identifying which players make it to the NHL and which ones don’t. If you have a couple of late round picks, it may be worth spending that pick on a player from Sweden or Finland versus a player from North America.
  3. All things being equal, a prospect drafted from Sweden or Finland has a more flexible development timeline given that they don’t have to comply with the rules of the NHL-CHL agreement. If you’re a contender on a tight window, consider drafting a player from Sweden or Finland who may be ready to come over and help earlier.

A sincere thanks to Namita Nandakumar for her assistance in putting together this article

2 thoughts on “Evaluating Nordic Drafting – A Potential Market Inefficiency

    • Johnny, my fellow intellectual, a question and an observation:

      How is it, exactly, that something gets to be “know” without someone doing “graphs or research” on it?

      If you are running a competitive sports team, it is c r i t i c a l that you are constantly examining the things that everyone else “knows.” The way that people break leagues and win is by finding things that everyone “knew” that were actually kind of wrong, because if you know something everyone else doesn’t you have an advantage. To use the example the article you didn’t read kicked off with, let’s say that everyone “knows” not to let Russian players on their team because they’re soft and lazy. Congrats; you now get to sign a pile of the best hockey players in the world for peanuts because nobody else will hire them. And just like that, at least in part because they bothered to research something “that is know already,” the Red Wings went to the playoffs 25 seasons in a row.

      It was a good post.

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