The NHL’s real problem: bad cost-benefit analyses

It turns out that Don Cherry was right all along – too many Europeans play in the NHL:

IIHF study backs up Cherry’s beliefs: The IIHF study found that the majority of Europeans drafted by National
Hockey League clubs between 2000 and 2006 did not make an impact either
at the professional or minor-pro level. It says those jobs should have
been filled by Canadians and Americans…

And his explanation makes sense, too:

Cherry says junior operators and NHL management give Europeans
special treatment because they spend extra money to acquire their
rights.

"They don’t have anything invested in an Canadian. So, who do you think makes the club?

"I’ve seen it in junior hockey. They bring them over. They’ve paid
$3,000 for the flight. They buy them suits, where our kids get nothing.

"They’ve got this money invested. If he can’t play, do you think they’re going to send him back? Never.

"That used to drive me nuts."

I’ve always liked Don Cherry, and now I like him even more. He understands a cardinal rule of cost-benefit analysis, even if most NHL clubs may not: Always ignore sunk costs.