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Valuing players using QA and Value Added in the draft

First I will say this. The costs of all your picks i.e. the base salary you pay are fixed costs. This means in the short term that these base salaries are there to stay (will be paid) because you will sign all of your draft picks, Jim Kelly situations and other anomalies notwithstanding. Forget about late rounders who are cut; they would technically be charged to overhead had I used overhead in this model.

Second, if we are going to do any real analysis of the benefits of drafting a great QB over a great guard, we need to quantify the benefits as well as the costs to determine the "Player" Gross margin. Let's call this the PGM, which is player benefit less player cost. Don't even worry about the overhead, I don't need any gray hair at this point.

Let’s define player benefit as value added to the franchise; counting all of the intangible benefits and tangible benefits the player adds to the franchise, with a heavy weight on benefits that the player contributes to the team during games.

*Disclaimer* The scenario I am about to present has a lot of flaws and discounts many variables. This is why sabremetrics and QA for football is very hard to grasp. Say we have this situation:

We draft Andy Levitre, guard, with a total salary of $2.0m, for the first 4 years. For the 6 years after, he gets paid the tag. We have a grand total of $56.0 million over 10 years. OR

We draft Jay Cutler at the same pick. He gets $2.0m for the first 4 years, then $14.9m (let's say $15m for the sake of easy math) for the next 6 years. This brings us to a total salary of $98.0m for his career (both players last 10 seasons then retire).

The current incumbent costs the team $40.0m over his entire time over 10 years. His name is John Doe, he will 200 td's, 200 picks (all picks, not pick 6's) and gets sacked 500 times in 10 years. (his offensive line is terrible).

Furthermore, let's operate on more assumptions (this is finance). One TD adds $1.0m to the franchise, one INT subtracts $1.0m of value from the franchise, and one sack subtracts $0.5 in value from the franchise (or football team, we are talking about intangible values here). John Doe and the current O-line devalue the franchise by $250.0m in 10 years as is.

In a vacuum, adding Jay Cutler keeps the 200 TD value, but lowers the amount of picks to 100. Sacks stay the same, as the offensive line is still terrible. Therefore, adding Jay Cutler in the draft at pick # 8 only would devalue the franchise of $150.0m over 10 years, giving us a positive variance of $100.0m.

In a vacuum, adding Andy Levitre will allow John Doe to still have his 200TD's, but will decrease the # of INT's to 175 (added time to make better decisions due to a better offensive line), and the number of sacks to 400. Levitre would be an elite guard in this scenario, and Levitre, the O-Line, and John Doe would devalue the franchise by $175.0m.

Levitre, John Doe and the O-line would add a positive variance of $75.0m (Compared to the scenario w/o Cutler or Levitre). This is a smaller positive variance than Cutler added to the team. Since we can count this variance as benefit added to the team, this means that Cutler was the better pick, right?

Wrong. Levitre added $75.0m of value to the team, while he cost $56.0m over 10 years. This leads to a value added margin of $19.0m. Cutler added $100.0m to the franchise, but cost $98.0m, leading to a margin of $2.0m.

We can break this model down further to a year by year basis, using calculus to determine how good his first few years are, where he would peak, and when he would not be worth his money anymore – something that I think the Bills felt about Barnett and Wilson this year.

While my ability to explain this may be poor, what I am getting at is that you need to look at a player’s marginal utility for dollars spent over their entire career. For every million dollars spent on Levitre’s total salary, $1.34m in value was added to the franchise. Would drafting Chance Warmack be a better idea than drafting Geno Smith? No, because having an awful QB or a mediocre QB like John Doe (who is much worse than Fitz) seriously devalues the team by limiting it. If the Bills had an offensive line as bad as the Bears or Cardinals, would drafting Warmack be smart? Hell yes it would, you need a good line to not only enable your QB, but to enable your RB’s to thrive. The PGM in this case would be higher for Warmack on the Bears or Cardinals than on the Bills. In English, the value added for each dollar spent is much higher for a guard going on to a terrible O-Line than a good one. Which leads us to the best metric we can use, marginal utility provided per percentage of the cap used.

This leads to all other sorts of issues, such as how do we measure marginal utility? My above approach would suggest that you would just divide value added by cost. But I don’t think it is that simple. Gross margins are best left in accounting and away from sports, unless you are making a decision on a player from a pure profit or benefit standpoint. What I can tell you is my personal opinion, which is exactly that: one opinion in a sea of pissed off Bills fans. We will see the most bang for our buck at the QB, LB, and CB position, because our 2nd CB position is a liability of epic proportions, we have an anemic LB core that although is getting better, is still suspect, and do I need to bring up the current state of the quarterback position?

I think the Bills need to develop their analytics department as fast as possible.

Just another great fan opinion shared on the pages of BuffaloRumblings.com.

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