I have always been interested in finding ways to gain an edge with optimization. The idea that you can identify a stat or approach that makes success much easier than the traditional method is something I always keep close in my mind.
A few years ago, before I became an official contributor to this blog, I published a fanpost titled 'A Stathead's Lament,' which was a short stream-of-consciousness piece discussing the value and presence of advanced statistics in the NFL, and if it were possible for a strategy to play out in this sport like it did with Moneyball. Since then I've learned more about the sport, gained new perspectives on football and life and watched the game evolve with exciting new developments. Remember, the average NFL fan can now purchase access to All-22 film of every game from last season!
With that in mind, and with the NFL Draft happily in my rear view mirror, I wanted to drag you along in the passenger seat as I write some thoughts on one of my favorite topics in sports: chasing the ideal of min-maxing. Here is a list of questions I plan to discuss in these articles, which don't have a predefined ending point. Feel free to suggest your own topics in the comments:
- What exactly does the Moneyball strategy entail, and how could it be applied to the NFL?
- The Cleveland Browns made headlines this year when they hired Paul DePodesta out of the New York Mets organization to lead a front office with analytic ambitions. How realistically does their first offseason reflect the system that DePodesta and Sandy Alderson built in Queens?
- What are the current innovations in player scouting and what could we do to improve this field?
- What are the current innovations in on-field schemes and what could we do to improve this field?
- How can we use technology to improve success in the NFL?
- How do we rationalize modern analytic techniques in combination with the classic football mindset?
Today I'm going to tackle the first question on this list: defining "Moneyball" and putting it into football's context. As fascinating as it would be to examine further and look at this through a college lens, I'd like to stick with the NFL for now.
As the name implies, this strategy is about spending. It’s an approach that became popular in Major League Baseball, because the league has no salary cap, and a small-market team like the Oakland Athletics needed a strategy to compete when it couldn't afford the free agents being snapped up by the New York Yankees.
The Athletics adopted a fresh mindset and realized economic lessons could pay dividends on the diamond. They made it a priority to target "market inefficiencies," players who were undervalued by the market but could still contribute to a winning team.
Many people recall Moneyball as being synonymous with introducing the importance of On Base Percentage to the game (after all, if a player gets a hit or walks, he’s in position to score either way). But the real revolution was the economist’s mindset, which transformed the game from a set of unwritten rules to a space of new ideas and innovation.
Players with patient approaches at the plate, pitchers who throw the ball with high rates of spin, strategies that position defenders based on the probabilities of where a ball will be hit rather than canonical positions. These discoveries have changed the game of baseball, and they allowed teams like the A's and the Rays to compete against the teams that spend $150 million assembling a group of all-stars.
Moneyball with a salary cap
Of course, the big difference between MLB and the NFL is that football franchises can’t be free-spending (or, more accurately, they can’t be stingy with their payrolls). A salary floor establishes a minimum amount of money that must be spent in a season, and a salary cap limits the top end. Signing an all-pro like Aaron Rodgers means that your team won't have enough money to also add JJ Watt. The floor is there for competitive balance and collective bargaining, to prevent a team from clearly tanking its season, and to ensure that enough veterans have well-paying jobs available.
That doesn’t mean that it’s impossible to game the system. Instead, NFL teams who wish to innovate under the salary cap want to focus on two potential optimizations:
- Exploiting the existing NFL rules (cash-to-cap, signing bonus prorating, cap room carry-over) to inflate the effective salary that can be spent.
- Making contract choices that proportion the spending in a way that allows for more blue-chip players to belong to the roster.
Let’s talk about those strategies.
Finding money where there isn't any
If you've ever read any of Tom Mitchell’s articles on this site, you understand the salary cap is just a number written on paper. If teams are serious about fitting their salaries under the cap, they can do it. Just look at the New Orleans Saints, who seem to somehow enter each offseason with negative cap space without incurring any penalties by the time their restructuring is over.
Exploiting the growing NFL market
The NFL is a powerful business, and every year it swells with more advertisement and more outreach to new regions. This directly affects the salary cap, which adjusts with the league’s revenues. In 2011, the new Collective Bargaining Agreement set the cap at $120 million. Two years later, it had increased to $123 million. One year later, it jumped $10 million. The next year: another $10 million increase. In the last year, the cap increased approximately $12 million.
This is free money for teams. They might have zero room under this year's cap, but that doesn’t stop them from signing players to new contracts. Pay a big roster bonus in year two, and they’ll automatically have room for it thanks to the annual cap increase.
Another cheap and easy way to generate cap space: Exploiting the carry-over. Teams are required to spend at least 90% of the salary cap each year. A league rule allows them to carry over any unused cap space to the next season and add it to that year’s cap. In addition, the salary floor rule is only based on total cash spent over a four year period. A team can be under the floor without violating the CBA, as long as the total spending reaches 90% by the end of the four years.
That is how you get the strategy used by the Jacksonville Jaguars from 2013 to 2016. After the 2013 season, the Jaguars, who ended up with the 3rd pick in the draft, had $22 million in cap space. They carried that over to the next year. Now the youngest team in the league, they carried over $27.6 million in their following season. In 2015, they had $32 million of cap space, and this year they had a monumental $41.6 million of cap space. They put that money to work, signing Malik Jackson, Allen Hurns, Jared Odrick, Julius Thomas, and Jermey Parnell to major contracts in the last two seasons.
The Raiders took a similar salary-dumping approach, and came away with Kelechi Osmele, Bruce Irvin, Sean Smith, Michael Crabtree, and Rodney Hudson as free agent prizes.
I can’t do justice to this topic, but Tom’s Salary Cap 101 article is a fine explanation of some of the tricks available to teams. Manipulate roster bonuses and signing bonuses. Convert salary to signing bonuses. Sign extensions. If teams want to make room for a contract, they will do it.
Get smart with contracts
The 2015 salary cap was roughly $140 million. Let’s play the Madden franchise mode fantasy draft (at least, how custom roster drafting in franchise mode worked back when I used to play the game years ago). Given that pool of money, what is the best way to fill up the roster?
How you prioritize different positions, and how you assemble rookies, young veterans, journeymen, and high-priced free agents into a unit, will drastically affect the roster composition.
Let’s talk quarterbacks
I’ve talked about this a lot, and I believe that quarterbacks are overvalued in the NFL. There’s no excuse for Sam Bradford or Brock Osweiler to be paid more than Jason Peters, Joe Thomas, or Brandon Marshall. For Nick Foles to make more than Jordy Nelson or LeSean McCoy. And yet here we are.
The market value for a quarterback has skyrocketed in recent years. And with good reason! A great quarterback is a golden ticket to the playoffs, and there’s a reason that names like Brady and Manning continue to hoist a trophy at the end of the season. These players are sometimes making twice as much as the average starter on his second contract.
That doesn’t mean all quarterbacks should be paid that much.
The truth is, teams who sign an average quarterback to a high-paying deal are essentially throwing money away. Is Alex Smith going to lead his team to the Super Bowl? Jay Cutler? Kirk Cousins? They're good players, but they have never elevated their game to the next level like others have. Could $10 million of their salary be better used getting one of the best left tackles in the NFL?
Is there any reason to pay a veteran quarterback $5-8 million to sit on the bench? Common wisdom says a backup quarterback will have a roughly 0.500 record, in the best case. If you’re assuming the average backup will lead your team to a losing record, what difference does it make if you have Josh McCown making $5 million or Jeff Tuel making the rookie minimum? There is a valid argument for veteran presence here, but economically the decision doesn’t make sense.
Wrapping up for today
I've said plenty on this subject, but I’ll write some more thoughts in the future, if you feel like following along. What do you think teams should be doing to manage their salaries? Any topics you’d like to discuss in the future along the analytics spectrum?