Freakonomics and the NFL

[patsfan13]

So some of us get frustrated when BB trades down and gets an extra pick here and there instead of getting out binkey. Then we look at the roster and see that not all of those stockpiled picks make the team, and that makes us crazy and think perhaps BB is crazy.

Caught this video on the NFL network on the value of draft picks is the 3rd DE statistically a lot better than the 4th or 5th... seems it may not matter. IOW there is a lot of luck involved.


Food for thought as we approach another draft and see BB trade down:

NFL Videos: Football Freakonomics: Draft Luck


and the paper they refer to in this piece:

The Loser's Curse: Overconfidence vs. Market Efficiency in the National Football League Draft | Berkeley.edu PDF

In this paper we offer some evidence on both of these important concepts in an unusual but
interesting context: the National Football League, specifically its annual draft of young players. Every year the National Football League (NFL) holds a draft in which teams take turns selecting players. A team that uses an early draft pick to select a player is implicitly forecasting that this player will do well. Of special interest to an economic analysis is that teams often trade picks. For example, a team might give up the 4th pick and get the 10th pick and the 21st pick in return. In aggregate, such trades reveal the market value of draft picks. We can compare these market values to the surplus value (to the team) of the players chosen with the draft picks. We define surplus value as the player’s performance value – estimated from the labor market for NFL veterans – less his compensation. In the example just mentioned, if the market for draft picks is rational then the surplus value of the player taken with the 4th pick should equal (on average) the combined surplus value of the players taken with picks 10 and 21.

Yale School of Management


Call me crazy but I'm guessing BB and E Adams are sorta familiar with this stuff, maybe even talked to the authors...

 

[VrabelJr]

Here let me sum up this study that probably six figures worth of salaries were wasted on: Don't put all of your eggs in one basket.

 

[jmt57]

That's a very interesting piece that unfortunately will be ignored by the masses due to its length and highly technical jargon. The loud volume of 'you have to use that pick', 'trading down is bad', 'you need playmakers', and the 20:20 cherry picking hindsight of 'look who they could have drafted, he's an idiot!' will drown out any statistical evidence that the draft is such a crapshoot that more picks is better than fewer picks.

And yes, my guess is that Belichick and Adams are already familiar with it, just like when BB called a very surprised Cal-Berkeley professor named David Romer about an analysis he had done regarding the probabilities and expected outcome of going for it on 4th down back in 2005.

 

[patsfan13]

Since the draft statistical best guess, the path to success lies in having more picks. This is exactly what we have seen in the Pats drafts. It is the anthesis of trading multiple picks to move up.


I think this approach has kept the team consistently competitive and avoided the feast or famine results of many other franchises.

 

[robbomango]

Great post,

The losers curse seems like a great read for fans interested in the drafting process, looks worth getting threw the economic geek speak at 1st glance imo. Definitely won't have mass appeal, to jmt's point.

Amusing video summarising the probability of an ugly truth

 

[nabwong]

Thanks for the articles PF13.

Honestly, I don't understand why pats fans are annoyed or angry when we trade down. For example.

This year's #1 = This year's #2 + next year's #1.

We have a FREE #2 every year. This is partly how we're able to sustain this dominance for a long time. What BB is doing is not a secret. Also, it's not to our advantage to make this aware to other teams. Who cares? The less they know, the better for us. They'll be more willing to trade with us (because they have to) and they won't have their egos bruised.

 

[PatsWickedPissah]

Without any doubt BB and Ernie are familiar with this study.

OT: I found this interesting...

"their findings about the market for football players could extend to other labor markets where organizations select talent, such as CEOs and new graduates, whose future performance also can be difficult to predict. “In our judgment, there is little reason to think that the market for CEOs is more efficient than the market for football players. Perhaps innovative boards of directors should start looking for the next Tom Brady (pick number 199) as CEO rather than this year’s hot young prospect"

As an investor, an MBA guy and former corporate exec, I could not agree more regarding the over value that Board's of Directors place in "name" CEOs and the inherent lack of "value" that their lavish compensation packages represent to the company and its stockholders

 

[patsfan13]

We have read that BB has roster values for each position roster spot, wonder how ROI analysis like this is incorporated into the cap/roster management equation.


BTW for folks reading this you can get the jist of the argument just from the 3 min vid at nfl.com.

 

[PatsWickedPissah]

Any doubts that BB had read this paper are dispelled here...

"While we do not elaborate this finding since it is not the focus the paper, it is clear that teams giving up a second-round pick next year for a third-round pick this year are displaying highly impatient behavior. Though it is not possible to say whether this behavior reflects the preferences of the owners or the employees (general manger and coach) who make the choices (or both), it is a significant arbitrage opportunity for teams with a longer-term perspective."

Paper published in 2006. BB has been working this arbitrage strategy with "impatient" teams since.

 

[cmasspatsfan]

Someone should send this to felger so he doesnt sound like such a moron come draft time, then again it might be too challenging a concept for felger to grasp.

 

[nabwong]

Someone should send this to felger so he doesnt sound like such a moron come draft time, then again it might be too challenging a concept for felger to grasp.

That's my point. Let him talk out of his ass. Let everyone think that they're taking advantage of the Patriots Organization.

 

[patsfan13]

Any doubts that BB had read this paper are dispelled here...

"While we do not elaborate this finding since it is not the focus the paper, it is clear that teams giving up a second-round pick next year for a third-round pick this year are displaying highly impatient behavior. Though it is not possible to say whether this behavior reflects the preferences of the owners or the employees (general manger and coach) who make the choices (or both), it is a significant arbitrage opportunity for teams with a longer-term perspective."

Paper published in 2006. BB has been working this arbitrage strategy with "impatient" teams since.

Yup, one of the advantages conferred by the stability and continuity of the Patriots management team. The can cut deals with GM and coaches who have to win 'today' because their jobs are at risk......

Of course B Kraft and now Jonathan buy in and makes this sort of style possible. When B Kraft is interviewed he frequently talks about the importance of stability.

The way BB runs the football operation is reflective of this philosophy.

 

[Palm Beach Pats Fan]

Someone should send this to felger so he doesnt sound like such a moron come draft time, then again it might be too challenging a concept for felger to grasp.

Too many big words for someone like Felger to ever process.

 

[robbomango]

I can see BB grinning behind closed doors as teams froth at the mouth trading up. He probably wishes it was never written given his secretive nature. What study:confused2:

 

[Wotan_the_Wanderer]

Yeah, Freakonomics has been pretty good debunking accepted myths through statistical research and their last SB podcast, though nothing new for seasoned and well-read football fans, took the "defense wins championships," "icing the kicker," and "home field advantage" to task or put it into better context while presenting them in such a manner that it's more palatable for the average Joe.

On Massey and Thaler, there was a AP business article that addressed the issue and study.

In their study, Massey and Thaler single out the New England Patriots as a franchise that understands that buying expensive stars imposes costs elsewhere on the roster.

The Patriots have won three Super Bowl titles in the past four years, led by quarterback Tom Brady. The sixth-round draft pick who was a fourth-stringer as a rookie might be the poster boy for the economists' research: Brady has the best record as a starter of any quarterback with at least 40 starts in the game's modern era.

Until he signed a new contract in May, Brady was a financial bargain. His previous contract had a total value of about $30 million; it was worth less than the signing bonus alone given to Indianapolis quarterback and two-time league MVP Peyton Manning when he signed a new contract last year.

But Patriots coach Bill Belichick argues teams don't have much choice about how much to pay draft picks. First-round picks may be overpaid, as the economists suggest, but the league has a pay scale that largely predetermines how much rookies can expect.

"The 10th guy makes more than the 11th. The eighth guy makes (less) than the seventh guy. The 15th guy makes more than the 16th guy does," Belichick said.

Study disputes value of top picks - Houston Chronicle

Massey and Thaler I suspect were even discussed here on Patsfans and received brief mentions:

http://www.patsfans.com/new-england...reiss-pats-sit-down-cromartie.html#post811108