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30 Jun 2009

Moneyball, NFL Style

Jason La Canfora of NFL.com has the NFL Management Council’s list of committed cash per team over the last five years, and he’s used those numbers to put a specific value per win for each team over that same time period. Not surprisingly, the Patriots, Colts, Chargers and Steelers top the list, and the Lions and Raiders bring up the rear. It’s an interesting list. Committed cash takes away some of the vagaries of the non-guaranteed portions of player contracts, but five years is a LONG time in any sport. I would love to see year-by-year variance, and maybe postseason wins should be factored in. What do you think?

Posted by: Doug Farrar on 30 Jun 2009

23 comments, Last at 01 Jul 2009, 5:14pm by Bobman

Comments

1
by Boston Dan :: Tue, 06/30/2009 - 11:11am

Pats rule the world.

2
by MJK :: Tue, 06/30/2009 - 11:24am

Not exactly shocking. The four teams that top the list are also the four teams noted for having the best front offices in football. All it does is lend credence to this popular wisdom.

Still, this bodes well for Kansas City's future.

4
by Temo :: Tue, 06/30/2009 - 11:34am

Furthermore, since all the teams spend similar amounts of money (see below), this seems more of a list of winning teams than economical teams.

6
by J.D. (not verified) :: Tue, 06/30/2009 - 12:02pm

Exactly. Every team is between $449M and $567M, with most of the teams between $480M and $520M. So this is basically just a list of wins over the past five years, with some minor reordering.

11
by Lance :: Tue, 06/30/2009 - 5:05pm

Yeah, pretty underwhelming. With a hard salary cap and most teams spending more or less the same amount on players, you don't need a number cruncher to figure out that the teams with the most wins will also be the ones with the best money-to-wins ratio.

3
by Temo :: Tue, 06/30/2009 - 11:26am

It looks like cash spent by team in the NFL is way less disparate than in other sports, which is expected.

For example, the New York Yankees are spending $206.8 million in 2009 on their big league club, while the Florida Marlins are spending $35.5 million. The Yankees are thus spending 483% more than the Marlins-- and that doesn't even include luxury tax money and money used for prospects. The standard deviation of big league payrolls is $34,676,116.

Meanwhile, the Dallas Cowboys only spend about 26% more than the Bucs, and the league as a whole has a standard deviation of $5,344,109 per year.

8
by shake n bake :: Tue, 06/30/2009 - 4:14pm

A hard salary cap and floor will do that.

Teams can't spend more than the cap or less than 87-90% of the cap.

5
by Independent George :: Tue, 06/30/2009 - 11:55am

Causation, correlation, or self-correcting feedback loop?

Lousy teams draft higher, have more open roster spots for FAs, and have to offer more cash to sign FAs to fill those spots.

7
by JMM* (not verified) :: Tue, 06/30/2009 - 2:11pm

Are playoff wins counted in the totals?

9
by Never Surrender (not verified) :: Tue, 06/30/2009 - 4:15pm

I am so relieved that JLC left his beat covering the Skins. But there's the downside that he will likely be linked to by FO with some regularity.

Oh well. I suppose I'd rather have occasional, NFL-based JLC than 24/7, Redskins-based JLC. In a just world he'd be out on his ass by now, but what are you going to do.

10
by usedbread (not verified) :: Tue, 06/30/2009 - 4:39pm

I'd like to be able to read Doug Farrar's assessment of the article, but the huge ad is blocking everything. I understand that bandwidth isn't free, but this is ridiculous.

12
by jimbohead :: Tue, 06/30/2009 - 5:14pm

doesn't FO have a cap analyst now that does this, except better? His article on current cap situation was awesome. Perhaps an application of his approach to the last 5 years would yield interesting results, in terms of overall ownership quality, and trends of improving and declining management quality. I'm thinking here about the Raiders precipitous decline over the last five years, and wondering if there are other similar, hidden stories out there...

13
by Bright Blue Shorts :: Tue, 06/30/2009 - 5:15pm

Yup it's all a bit poor. With baseball the point was that Oakland A's spent about $45 million and performed as well as the Yankees/RedSox who were spending almost three times that at $120 million.

But secondly there was an assertion that baseball teams usually win at least 45(?) games per season, so it was about how much cash does it cost to buy the wins above that. There's a lot more variance/multiplier between the top teams winning 100 games and the bottom ones only achieving 60.

In the NFL, I'd guess 50% of the teams win/lose within 2 games of 8-8 (i.e. 6 - 10), and probably 95% of them between 4 and 12, with the occasional outlier beyond those numbers.

The lack of variance in the two main stats (i.e. money spent and wins) really doesn't make it a good report.

14
by Phyrre56 (not verified) :: Tue, 06/30/2009 - 5:41pm

So what's the takeaway from this article? The Raiders should stop paying their players?

The reason the teams at the bottom are bad is because they've overpaid. That's obviously a scouting problem, not a financial problem. So the Raiders have bad scouting, personnel planning, etc. That just means they're bad, not inefficient. Other teams making the same scouting decisions would have the same outcomes.

19
by Bright Blue Shorts :: Wed, 07/01/2009 - 7:59am

The reason the Raiders are bad is little to do with the financials or scouting, it's the organisational structure and how the coach is allowed to operate.

Jon Gruden managed to succeed there, Lane Kiffin was beginning to turn the team around and Tom Cable has continued that. But in between them, there is a littany of poor coaching (Mike White, Joe Bugel, Bill Callahan, Norv Turner, Art Shell) that has been undermined by Al Davis.

Likewise look at other teams have created immediate turnarounds. Invariably it's the same players present, but a new regime getting more out of their talents.

15
by Ben Stuplisberger :: Tue, 06/30/2009 - 6:05pm

The list could be interesting if not for the above mentioned criticisms. This statement bothered me though:

"The Raiders are, in these terms, three-times as poorly operated as the Patriots."

A more interesting list would compare profit margins of each team. If the Raiders lose like mad but still make money, they are not poorly operated. I would guess that lack of success would hurt some teams more than others from a business standpoint. Losing consistently may be killing the Lions, but I don't know how badly it's effecting the Raiders and Chiefs.

Obviously, winning has a crucial advantage, provided a team can do it consistently. The more a team wins, the wider their appeal becomes across the country, so the more jersey's and other merchandise they can sell.

17
by Bobman :: Wed, 07/01/2009 - 1:30am

Plus, if you win enough games you get more prime time TV slots, further expanding your potential fan base, further expanding your potential merch revenues (and your players' endorsement marketablity). In addition, if you win enough to host a playoff game, that's 60,000 tickets x $50 plus concessions and local TV revenues for that game. Good enough to host two, and you double it.

So winning DOES have a correlation with income in a few ways--and it's probably stronger if all other things are held equal, such as stadium size, metro area population, owning your own cable TV network (back to the Yankees), etc. But win as much as you want in a teeny market and you still won't rake in what an 8-8 team grosses in NY.

Maybe a more accurate way to put it would be "the Raiders, as a football team..." as opposed to "the Raiders, as a business...." Although I assume that over the long-term, these two concepts converge--to take it to its absurd extreme, if you have ten consecutive 0-16 seasons, you will be out of business. And if you have ten consecutive 19-0 seasons, your star players can get arrested weekly for snorting cocaine off a teen hooker's backside while firing RPGs at the White House and drowning kittens, and still you'll have a very broad, very devoted fan base willing to pay a king's ransom to cheer them on.

21
by chowder (not verified) :: Wed, 07/01/2009 - 4:53pm

Maybe not the kittens... Americans are very protective of their furballs.

To be honest, Bobman, i thought you'd be the one to wonder if the author included a certain $250k (or $750k) in what the Pats "spent" to win 63 games. No offense intended.

16
by Jerry :: Tue, 06/30/2009 - 7:09pm

I wonder if the numbers become more interesting if you subtract out each year's salary floor.

18
by Bobman :: Wed, 07/01/2009 - 1:34am

That would increase the relative differences between payrolls. Maybe along with that you could remove a number of wins as a floor (6? 8?)which would give some teams a large negative number and others a large positive number--further spreading the $/W ratios and emphasizing the value aspect. Instead of the #1 and #16 teams being $5M per win apart, they might be $20M apart because of adjusted salaries and adjusted wins (with floors removed).

Probably mostly the same teams in the same spots, tho....

20
by BD (not verified) :: Wed, 07/01/2009 - 11:26am

It would not affect the results, just put the numbers on a different scale.

A comparison between two variables (i.e., correlation) is not affected by an arithmetic transformation. In English, if you were comparing height to weight with inches and pounds, then converted to centimeters and kilograms, you would obtain the same result.

Doing something like squaring the differences between salaries would accomplish what you suggest by magnifying the differences, but I'm not sure it would be meaningful.

22
by Bobman :: Wed, 07/01/2009 - 5:04pm

BD,

Different scale--yes, it changes the numbers and the relative distances between the numbers. I did not intend to suggest I change your 6-2 height to cm and my 5-7 height to cm to see how different they are (there isn't any) but to emphasize the differences, say we deduct a baseline of 5 feet tall--then your number is suddenly twice mine! (14" to 7") No you are not twice as tall as I am, but if you reduce all the "meaningless" stuff that contributes to a baseline (filler, if you will) then you are monstrously tall compared to me.

But it needs context: If we were competing in archery or diving or baseball, then that difference is essentially meaningless. But if we were playing hoops, or I was a DB covering in you as a WR, suddenly it is huge and very meaningful.

I realize that I did say to combine two adjustments which would cancel each other out. I meant to suggest that in general over an X-year span, an NFL team will probably average 8 wins per season plus or minus. Therefore those filler wins are meaningless--everybody is expected to get them (sorry Detroit, not you). It's the marginal wins--those over or under the 8--that are the REAL thing we are searching for. We want to know who is bad and who is good, not who is average. Right now, all teams are positive in their efficiency since they have + $ spent and + wins. But if you subtract the baseline wins, you'd have positive and negative numbers, and those tending toward zero are about average. GMs could be graded on their season-to-season cash-to-wins metric, given a raise based on a positive ratio or fired if they go negative...

I assume that if you subtracted baseline cash as well as baseline wins, then the results would be about the same as the original study--which aligns with your English to metric conversion and would not be terribly helpful.

23
by Bobman :: Wed, 07/01/2009 - 5:14pm

Okay, just ignore what I said above. I just tested a few numbers and forgot one simple item--as a denomenator approaches zero, the result approaches infinity. So the teams with near-average wins in the scenario I proposed above would appear to be the most egregiously inefficient on the negative side, and the most payroll-efficient on the plus side.

I vote for leaving the numbers as-is.

It was a bad idea and I will sit in timeout for five minutes as punishment (or resume doing the job I am being paid for). Starting... now!

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