Valuation of NHL draft picks using functional data analysis

Evaluation of player value in sport can be measured in several ways. These measures, when captured over an entire career, provide insights concerning player contributions. Professional sports teams select young talent through a draft process with the goal of acquiring a player that will provide maximum value, but these expectations diminish as the pool of players grows smaller. In this paper, we develop valuation measures for draft picks in the National Hockey League (NHL) and analyze the value of each pick number with these measures. Specifically, we use different measures of player value to provide an expected value of that measure for each pick number in the draft. Our approach uses functional data analysis (FDA) to find a mean value curve from many observed functions in a nonparametric fashion. These functions are defined by each separate year of draft data. The resulting FDA model follows the assumption of monotonicity, ensuring that a smaller pick number always provides more expected value than any larger pick number. Based on a cross-validation approach, measuring value on annual salary provides the best predictive results. The proposed approach can be extended to sports in which an entry draft occurs and player career data are available.