The Optimal Contract Allocation in the Presence of Salary Caps: The Case of NHL

Using the example of the NHL, this article examines how a more even distribution of salaries is associated with the achievement of success by teams. To answer the question of interest, I collect the data on thirteen NHL seasons that include both regular games and playoff games. I hypothesise that in the regular season, the positive correlation between more evenly distributed contracts and points scored by the team will have less impact than in the playoffs. As the estimation results reveal, in the playoff games, a more uniform distribution of wages has a much more important role, both in terms of satirical significance and in terms of economic influence. These findings highlight the importance of the importance of a more even distribution of contracts not just for the NHL, but also for any organisations which market success depends on the performance of teams with potentially heterogeneous employees.