Given the NHL regular season has just concluded, let's take a look at how team payroll and team performance relate for just the 2011-2012 season. Since we have only one season (and I admit this is a limited sample size so any conclusions should be viewed cautiously), we do not need to calculate relative payroll, as the average payroll is not changing over time - again only one year. Thus all we need to do is gather the data (payroll from USA Today and Standing from hockey-reference) and calculate the r-squared between NHL team payroll and NHL team winning percent for the 2011-2012 regular season. Having done this, I find that the r-squared = 0.198, indicating that the variation in NHL team payrolls "explain" about 20% of the variation in NHL team winning percent for the 2011-2012 NHL regular season.
I plan on coming back to this payroll and performance over a longer period of time next month.
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