reamer

Jason La Canfora, the new analyst on the NFL network, wrote an excellent blog this week detailing the cost per win of each team. I know we're not supposed to post full articles, so here's the link:

NFL.com Blogs Blog Archive More Moneyball (The Economics of Wins and Losses)

I am completely unsurprised to find that the Patriots, Colts, and Steelers are in the top four; their sustained success over the past decade is a direct result of their ability to make each and every dollar count. I know we often discuss the Patriots' superior money management in a salary cap era, but this article looks at the entirety of their committed cash, not simply player's salaries. In other words, using sound business principles in the FO, advertising and marketing, scouting, partnerships and sponsorships, etc. Good stuff.

jmt57

Interesting analysis. There was a similar but not identical article at Football Outsiders a few weeks ago that looked at cap efficiency and salary per win. This nfl.com column takes it a step further with those additional costs.

FOOTBALL OUTSIDERS: Football analysis and NFL stats for the Moneyball era - Authors of Pro Football Prospectus 2008

Not that the info would ever become public, but it would be interesting to see how profitable each team actually is, and a correlation between profit and wins. From looking at that list I'm guessing the Bucs, Chiefs and Titans might be the most profitable teams in the NFL.

spacecrime

Profit per win is a weird measure. The easiest way to increase profit per win is to have fewer wins.

aurakilla

wont a team earn less if it wins less o_0


like say more pats fans buy more jerseys then lions fans

jmt57

Yeah, I kind of got off topic a little bit. Not really looking for profit per win, but curious to see whether or not there is any correlation to winning organizations and profitable organizations - or if there is no correlation at all. For example, perhaps teams like the Bengals and Bucs are more profitable in their losing years than in their winning years; is it a case of being either profitable or a winner? Do certain teams consistently rank in the top third or bottom third in profit regardless of whether they are winning or not? Does winning result in higher profits, or does it cause expenses (such as salaries) to increase and therefore result in lower profits?

Those were the kind of questions I would be curious about - but as I said earlier, one I'm sure we'll never know as that P&L information will surely remain private.

ctpatsfan77

On a minor note, the Patriots were 11th in actual $ paid from 2004-2008. The average team spent $502.2M, as did the median team. The Patriots paid out $512.3M, $20M less than the Colts, about $5M less than the Steelers, and over $50M(!) less than the Cowboys.

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jmt57

They're going to have more demand for their tickets - resulting in more sellouts, less no-shows (who spend zero at the stadium), and the ability to raise prices without an adverse affect on attendance.

In regards to apparel sales, my understanding is that with the exception of what is sold at the stadium on game day, that money is split equally among all 32 teams.

JoeSixPat

I think you've got it backwards - as evidenced by the fact that the teams with the fewest wins have the most costly price per win... it's not about profit if I understand this correctly - its about return on investment with "wins" being the return.

Every team spends hundreds of millions of dollars - the only difference is that some teams spend that and win, and some teams spend that and lose.

In general I'd agree with you that this whole analysis has limited practical application except to emphasize how much teams like Oakland spend to be bad.

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jmt57

Regarding how profitable these teams are, there is one publicly owned team: the Packers. And the numbers are revealing.

Last year Green Bay had a $20.1 million operating profit - though they ended up with only $4 million in net income due to some fairly large investment losses. They had $247.9 million in revenue and $227.8 million in expenses; more than half of their expenses was player costs of $138.7 million.

With the current setup I would guess that the biggest disparity from one team to another would be the cost of a stadium. Some teams get sweetheart deals from local city, county and state governments, while other teams have to foot most of the bill themselves. If the CBA is not resolved and there is no salary cap - or salary floor - I'm guessing that we will see many of those teams with a higher amount of debt owed on their stadiums opt to reduce their largest expense - player costs - in an attempt to become more profitable.

spacecrime

No, I think cost per win is a very valid analysis tool. I was merely commenting on another poster's thoughts about profits and winning, which is very different than cost per win. But he was thinking more on the lines of correlating the two, perhaps as a graph with team profit as the abscissa and number of wins as the ordinate. I'm betting the graph will trend upwards as the team profit increases.