“He’s a skilled player, but it’s a risky pick.”
You’re sure to hear that line on draft day when it finally arrives, but what does that actually mean? Skill, and risk. In some ways, the two words have become almost synonymous in some circles of prospect evaluation, or at least in the perception of prospect evaluation. Hockey players who demonstrate a high aptitude in certain characteristics such as puck skills have almost become automatically perceived as risky types of players, despite a looming ignorance for whatever their defensive aptitude may be. Hopefully, by now you’re catching my drift that this is obviously a misconception. While those who evaluate players for a living, or even on a semi-serious basis are forced to confront this head-on, as a casual fan or fantasy owner, it’s quite easy to misconstrue the linguistic association of the two terms. In fact, the two factors – skill and risk, MUST be evaluated exclusively from one another.
Many NHL teams, in addition to moving towards an analytics-supported evaluation system, have also continued to develop analytics in terms of draft strategy, which sadly, doesn’t get quite the same amount of press. While some teams are sure to have unique iterations of their supplemental strategies, the concepts are likely very similar across the league. Today, I hope to convey the concept and how it can be applied to the draft, by using the method of comparative risk assessment that I’ve developed at my day job for less fun things, like triage and cost justification.
Quantitative risk assessment (QRA) is the concept of systematically evaluating and quantifying multiple factors that, when combined, produce a quantitative value reflective of risk. The concept is commonly applied in the sectors of health, and environment, but also in economics. One quick glance at some of the economic values being estimated for the MLB draft can quickly show why this is an important tool for NHL owners when it comes to the draft.
The first, and possibly most important thing to acknowledge about risk is that it is relative. That is to say that a player who might be a relatively risky selection in the mid-first-round, may very well be an innocent or safe selection in the early third-round. It might seem obvious when stated in those terms, but it is important to drive home the point that the selection of any one player is not inherently risky, but rather, varies in terms of risk depending on when they are hypothetically selected.
Risk, and more specifically the quantitative assessment of risk, when applied to the concept of drafting is ultimately the difference between two risk factors; 1 – the expected outcome/benefit (player value), and 2 – the expected input/cost (pick value). In common QRA practice, both