Some Pre-Turkey Day Blog Stuffing : Football Econ 101
Heck, it’s late on getaway-day, so why not a bit of fluff before you hit the stuff…ing. In a rather un-PC titled article, “Patriots vs. Redskins“, Kevin Hassett of the new American.com On-line Magazine writes about how the Patriots are the NFL’s business model franchise. Hasset explains why economic theory supports that “the [NFL] draft is the only place to build a winning team” and that “economics would predict that teams would uniformly put an enormous effort into perfecting their drafts, and avoid sinking excessive dollars into costly free agents.” So who does this the best?
In fact, this model predicts very well the behavior of one team, the New England Patriots. Their head coach, Bill Belichick, who received his undergraduate degree in economics from Wesleyan University in Connecticut, has been an artist at squeezing value-added out of his draft picks, and has won three of the last five Super Bowls.
This economic brilliance was on display in September, when Belichick traded disgruntled receiver Deion Branch to the Seattle Seahawks for a first-round draft pick. The Seahawks gave Branch a $39 million contract, guaranteeing that they would achieve little value-added at that position. So Belichick burdened the salary cap of a rival with a fat obligation, and took home a valuable draft pick for his own team.
Belichick keeps winning because so many others in the league behave so strangely. Two economists, Cade Massey of Yale and Richard Thaler of the University of Chicago, studied years of draft history and found that teams make systematic errors that reflect a serious economic illiteracy. Coaches and general managers place too high a value on the top few picks, and too low a value on picks a bit further down.
Just some food for thought for you as you half-nap, half-watch an uncompetitive football game, with a ball of stuffing and turkey floating in your stomach amidst a sea of gravy, and your mind encased in a post-feast, triptofan induced fog.
Next up: why baseball is proof that trickle-down economics works.