Manning over Tebow. Ok, that’s an easy choice in the short term. Surprisingly from Tebow’s wins-losses, but not surprisingly from coaching practices, little interest in a trade for Tebow existed around the NFL. By reports, only the Jaguars (owner, not coaches) and Jets (coaches) showed interest. For teams with QBs by the names of Rogers, Brady, Brees, E. Manning or even Rivers, Romo, and a few others, the disinterest makes sense. For teams with serious QB issues, the lack of interest only makes sense when considered as part of the risk aversion of coaches.
Coaches are notorious imitators. If Joe Montana or Troy Aikman rack up championships based on using a high pass completion percentage “West Coast” scheme, well, then everyone needs one of those. The problem — few QBs match the specific skills of Montana, Aikman, Brady, Manning, or Brees. Even with QBs that clearly don’t match their skill set, coaches will try to cram the square peg in the round hole with only adjustment around the edges.
Why so little wholesale offensive innovation, so little willingness to customize offensive schemes even when the resources available are different? Incentives are the first place an economist looks. In the simplest of economic worlds, managers are risk neutral. Owners take the risks. In more realistic, expanded settings and models, managers bear risks based on the specifics of contractual relationships within firms.
No doubt, coaches are incentivized to win games. Consistent winning keeps a coach employed. Winning big sparks higher salaries and new job opportunities. So, take risks, win games … Maybe not. Taking large risks, walking out on a limb by bucking trends, if unsuccessful, can lead to excessive fan and media criticism and to quick firings and diminish future job opportunities relative to mediocre results. These combinations of incentives produce incremental adjustments to existing methods but few real innovators. Departures occur only when owners or a desperate situation leave little other option. We see much more radical innovation in college football because the talent disparity generates more desperate circumstances. For example, Northwestern gambled on the modified single-wing, spread-option attack in the 1990s. Purdue under Joe Tiller employed a slightly different version. Now, the spread has swept college football.
Radical innovators are often seen as “mad scientists.” Sid Gilman played this role with Don Coryell and Bill Walsh winning many more games and receiving much wider recognition for refining and improving on Gilman’s ideas in ways that then became widely adopted by the league over time. The “mad scientist” label even stuck to Coryell to a certain extent.
After Peyton Manning’s visit with the Broncos, several articles have appeared regarding its meaning for Tim Tebow. The Wall Street Journal’s Jason Gay writes
This is a young quarterback who, for all his shortcomings, inefficiencies and bridling against convention, transformed the Broncos last season. After beginning the 1-4 under Kyle Orton, Tebow guided the Broncos to wins in seven of eight starts to put the Denver atop its division. They lost their final three games, but they slipped into the playoffs for the first time in seven seasons, winning a thrilling playoff game against the Pittsburgh Steelers before falling to New England in the next round.
Yahoo! Sports’ Michael Silver, a tough critic of Tebow, titled a recent column, “Tim Tebow Getting Shafted with Broncos’ Pursuit of Peyton Manning.”
Both writers acknowledge the fact that if Manning is obtainable (presumably on reasonable terms), then he makes the Broncos and most other teams better. It’s not the pursuit by the Broncos, per se, troubling Gay and Silver but the indifference to Tebow in the way handling of the pursuit and the blatant signals about the underlying assessment of Tebow’s future.
The initial predictions that Tebow would fail with the subsequent feelings that his success could not endure strikes at the difficulty of managerial insight/foresight — “entrepreneurial activity” in a narrow sense. As I wrote last August in NFL QB Bias, player shortcomings in obvious ways relative to peers stand out and capture the attention of “analysts” — passing accuracy, for instance — while implicit or less direct outcomes such as yards per completion are pushed to side points. For example, in the playoff game with the Steelers, Tebow completed less than 50 percent of his passes — ridiculously low by current NFL standards. However, his 30 yards per completion ranged off the charts on the positive side. His running ability leads defenses to play in ways that create big opportunities. Instead of defenses stacking the field with 5 or 6 defensive backs, many of whom are small cornerbacks, they play with a lineup resembling something out of the 1970s. Yet, many “analysts” (and seemingly the Broncos) see the low percentage as a long run outcome and the big yards per completion as transitory — not as a fundamental shift, not as an alternative means of winning games over the long run.
It’s easy to dismiss Tebow. After all, who would know better than his current coaches and GM? This is where managerial econ discussions diverge from descriptive/positive econ discussions. Didn’t Babe Ruth’s Red Sox managers know best — who would switch a highly successful pitcher to position player? Weighing implicit costs and looking ahead is tricky business.
On a related point, ironically, Tim Tebow’s performances evoke images of John Elway himself, particularly in the first half of his career. Somehow, this seems lost on most NFL commentators. My lasting memories of young Elway are of him throwing a swing pass at a player’s shoes on one play, and then scrambling around and whipping a 50-yard rope for a TD on the next play. Or, of a player not looking very good for 3 quarters and then playing much more effectively in the 4th quarter by improvising. While effective, Elway’s performances, especially young Elway, do not jump out by standard metrics. While maybe not brothers will Tebow’s stats, they are cousins. Below, I list some of Elway’s stats in his 2nd and 3rd season alongside Tebow’s:
| Elway(84,85) | Tebow (2011) | |
| TD-INT | 40-38 | 12-6 |
| Completion % | 55 | 46 |
| Yards/Completion | 12 | 13.7 |
| QB Rating | 73 | 73 |
| Game Winning Drives | 8 | 6 |
By 1993, Elway developed into a more polished passer as reflected in QB rating, TD-INT ratio and other stats. Nonetheless, his career passing numbers look great only in a cumulative sense. On a per season basis, they are ok. His career QB rating of 79.9 rises slightly above players from his own era such as Jim Everett (78), Jim McMahon (78), Chris Chandler (79) but below players such as Boomer Esiason (81), Bernie Kosar (81), Randall Cunningham (81), Rich Gannon (84), or Dan Marino (86). His TD-INT ratio is a not-so-sparkling 300-226, and he was sacked a ton –second all time. Often, the O-line is blamed, but players like Elway, Roethlisberger, Vick, Tebow hold the ball a long time, leading to high sack figures.
Was John Elway just an “ok” QB? That’s not my theme. Instead, he succeeded in the most important way — by winning games –in spite of rather obvious flaws. His rushing yardage compensated, particularly late in games. He rates second all-time in game-winning-drives. It’s funny how QB running and improvising late in games is viewed as a good trait, but not in the first 50 minutes. But, John Elway as GM (along with a lot of others) holds much less confidence in his playing cousin — Tim Tebow.
With all the news reports about players and coaches on the New Orleans Saints having a system of side payments for knocking opposing players out of the game, I was interested to get the take in Give the Ref a Gavel written by Eldon L. Ham, a lawyer and adjunct professor at the Chicago-Kent School of Law.
Mr. Ham refers to the Saints bounty program as a “ruthless criminal conspiracy” which the NFL should punish via fines and suspensions. In addition, Mr. Ham calls upon legislatures to take action.
Rather than wait for our courts to gradually wake up, state legislatures should accelerate the process by adopting laws defining and criminalizing something we can call “flagrant sports battery.” This could protect not just N.F.L. players, but athletes in high school and college. These laws would not apply to customary hard hits, personal fouls or the normally accepted aggressive play that is part of the game. But they would proscribe aberrant conduct like hit lists and bounties, and penalize other malicious actions.
It is easy to agree, I suspect, that keeping hit lists and paying bounties for putting players out of the game through actions in violation of the rules of the game is outside the bounds of sportsmanship and should be condemned. I suspect also that most people knowledgeable about a professional sporting contest, and surely the participants in that contest, know who the key players on the opposing team are and hardly need a list to be kept to remind them. A law addressing such issues seems like a nice idea, but what would it actually accomplish?
But Mr. Ham also calls for the law to “penalize other malicious actions”. Wow. I hope if any such law ever gets discussed it is far more specific about what constitutes a malicious action under the law than Mr. Ham has been in this op-ed piece. Fans of the NFL are likely to agree that rules regarding what are and what are not legal hits within the rules of the game seem to be applied in ways that are largely random, though possibly with some deference to protecting marquee players, especially quarterbacks. I think these “other malicious actions” will be as hard to define as pornography, we can’t quite say what they are, but we know them when we see them.
The actions described in Mr. Ham’s article are all troubling. Courts should perhaps be more willing to tackle some of these cases, and leagues, professional and recreational alike, should be more active in policing their members to keep these things from happening. But one wonders if these sorts of occurrences are so common place as to warrant passage of laws that would surely be costly to enforce and difficult to prosecute.
The Sports Business Journal recently published “Clubs give winter homes a branding boost” about the partnership between MLB franchises and their spring training homes. There is a box with Cactus League and Grapefruit League in it that has links to charts showing “What … municipalities have gained from, and spent on, spring training sites, according to their leases.” Among these pieces of information are the debt service and the net cost to the municipality to operate the facility in 2011.
The article points out that since 1988 19 of the 30 clubs in MLB have gotten new spring training venues and the rest have gotten renovated facilities, to the tune of almost $1 billion. The article also notes that nearly every club has gotten a bigger share of stadium revenue than it had under the previous lease. “Public officials defend their spending on spring training facilities by saying that most of the funding for the projects comes from tourist taxes rather than out of local residents’ wallets”. In return, the cities get the “marketing muscle” of the clubs.
The key for the cities is the belief that MLB clubs draw tourists who spend lots of money in hotels, at restaurants, on souvenirs, all of which transactions are taxed. By my count from the table, only 13 clubs had attendance at their spring games over 100,000. None had more than 200,000. One assumes that at least some of these attendees are local to Florida and many of them are people who take in multiple games, so that the number of tourists brought to any individual city in Florida is fairly modest.
Consider that in the first quarter of 2011 (January through March), Visit Florida reports that there were 22.9 million visitors to Florida, while in the second quarter (April through June) there were 21.8 million visitors. If every one of the difference was there for Spring Training and for no other reason, then one could assign to the whole state of Florida an increase in tourists of 1.1 million during the period of Spring Training relative to the next quarter of the year. Compared to the previous quarter, winter 2010, the boost would be 1.3 million. Of course, the first quarter of the year is likely to attract a large share of college students on spring break and others from colder climates fleeing the winter, so how many of that million or so tourists are in Florida because of and only because of Spring Training is unknown. But surely it is not the whole million plus. Moreover, that figure is for the whole state, not the small number of locations where MLB clubs have their spring training, none of which includes Miami or Dade County.
Perhaps the attendees, net of any current residents among them, generate enough tax dollars to cover the costs to the local community of the facility. Take as one example, St.Lucie County that had net operating costs of $2.075 million in 2011 for the the facility it put up for the NY Mets. If the 87,413 attendees at Mets’ games in the Digital Domain Park are all from out of the area, they would have to pay nearly $24 apiece in taxes while in St. Lucie County (population 280,000) to cover the county’s operating cost of the stadium. Perhaps they do, as does not seem unreasonable if they stay any length of time. Indeed, the county imposes a 5% tourist tax on stays of less than 6 months, with about 80% of that money going to pay for the St. Lucie County Sports Complex (Digital Domain Park). The remaining 20% goes to promote tourism.
To put this in context, a tax is imposed on all tourists that stay in St. Lucie County, even those that do not do so to attend spring training baseball, to pay for a sports complex/baseball facility that might attract out of county fans about 6 weeks during the year. Martin County, directly to the south of St. Lucie has a similar tax, but of only 4% and hosts no MLB club during Spring Training. Indian River and Okeechobee counties also border on St. Lucie County, neither of which seems to impose a hotel or tourist tax (at least I could not find that they do in a quick look at their county government websites). In other words, it is fairly easy for those tourists interested in avoiding St. Lucie’s tax to pay off the baseball facility.
Moreover, given that Martin County imposes a hotel tax at 4% without the need to pay off a baseball stadium bond, it is reasonable to conclude that St. Lucie could do so as well. That means St. Lucie could impose the same tourist tax and devote those funds to other purposes, like those for which Martin County uses its tourist tax revenues, and the fact that St. Lucie County does not do so means those other purposes are funded out of the wallets of the St. Lucie taxpayers.
Similar arguments likely apply in each of the communities hosting Spring Training. The bottom line is, communities providing subsidies to MLB franchises as means of attracting tourists and enhancing their local economies need to think more carefully about what they are getting in return.
The NFL is approaching the deadline after which players become free agents, and are able to negotiate with other teams. The salary cap puts teams in the position of having to decide which of their free agent players to let go and which to try to retain. Clubs also can choose to designate one of their free agents as a franchise player, which means that player stays with that club for another season and is paid the average of the top five salaries from the previous five seasons for players at his position. (This rule has been changed under the collective bargaining agreement signed last summer, having previously been the top five salaries at the player’s position in the previous year.) Of course the franchise tag idea is rather unusual and particular to sports labor markets.
Nonetheless, at least for a sports economist, interesting economic issues abound with regard to the franchise tag. For example, how does a club decide to use the tag and on which player to apply it? The name “franchise player” suggests a superstar will be tagged, so that the franchise can keep its marquee players. One thinks of this as the football version of the NBA’s rules allowing clubs to violate the salary cap to keep their own free agents (the Larry Bird exception). Yet scanning the lists of players franchised over time one is likely to come away doubting the rule is applied this way. Many of the tagged players are linemen, for example, and not generally considered the face of the franchise. The tag has been applied to punters and kickers. Moreover, some clubs rarely or never use the tag they have (one would have to believe a player is in the top five in all of the NFL at his position to do this, so it isn’t surprising that some clubs don’t use it).
A second set of issues surrounds the reaction of the player to being tagged. One possible response is to pout, hold out, and shirk on the field. Certainly the hold out route is fairly frequent and common wisdom is that some players have underperformed after being franchised. It is not unusual for the press to discuss negotiations getting ugly when a player is franchised. Players naturally want a multi-year contract with a big pay day, especially so for players at positions with high injury risk and relatively short careers. Clubs, on the other hand, need to field a full team subject to a strict salary cap and want to economize on player costs wherever possible to do so.
A second possible player response is to take the tag as motivation to perform exceptionally well in the following season to show one deserves a big contract and to make oneself more attractive to other clubs. Of course, the club may respond by tagging that player again, a not-infrequent occurrence. Indeed, the CBA includes provision for franchising a player three times, though that is a rare occurrence.
NFL fans will surely discuss, argue, and lament decisions made by their favorite clubs over the next few weeks. As a fan and a sports economist, I look forward to the next season to unfold providing us with evidence on how the new crop of franchised players have responded to being tagged.
As long-time readers know, posters at TSE have often argued that entities seeking the right to host mega-events like the Olympics may be engaged in a fool’s errand. Public expenditure rooted in the romantic notion of the Olympics returning to Greece, for example, contributed to the ongoing fiscal disaster there (see here and here, for starters). I’m no stranger to romantic notions myself, having made the pilgrimage to Olympia in 2002. It’s all too easy to fall into the trap.
Recently comes news that Italy has decided to withdraw from the competition to host the 2020 Olympic Games in Rome. As John Powers points out, Italy no doubt has the capacity to be a fabulous host for the games, but given their fiscal woes, opting out for this round is prudent. Spain is in bad shape too, yet is forging ahead with its bid to host the games in Madrid. Perhaps the Spanish government believes that spending on Olympic infrastructure will stimulate the Spanish economy? Count me a skeptic.
Interestingly, Italy’s announcement was made by its Prime Minister, the economist Mario Monti. Monti is known as “Il Professore” and is attempting to lead the “technocratic” effort to reform the Italian economy. Maybe economists do matter. I wish him well.
From Tom Van Riper at Forbes:
According to TiqIQ.com, which aggregates online ticket prices from various sources, the average price Knicks fans are paying online for a game at the Garden has shot to $313.54, up from $229.72 on February 3, the day before Lin’s improbable run began. The Knicks’ President’s Day matinee with the New Jersey Nets is going for $601.89, on average, 92% above the season average so far (though that season average is obviously growing as the season moves ahead with Lin as the headline act). The minimum price to get into the building for the Nets’ game: $149.
There’s more: for the Knick’s following home game against the Atlanta Hawks on February 22, the average online seller is getting over $750. That’s about 300% more than a ticket was fetching less than two weeks ago. Sure, it’s New York. But how many players would have turned mid-season dates with New Jersey and Atlanta into premium events?
I don’t follow the NBA closely, but I tuned into the Knicks game on Feb 7th after reading a bunch of tweets mentioning Jeremy Lin. With the Linsanity storyline still going, it doesn’t surprise me to see the interest in Lin (would that make it Linterest?) reflected in the secondary ticket market.
Update (2/21/2012): John Ourand of the Sports Business Journal had the following tweet this morning:
MSG rating factoid: last night’s Knicks game marked the 7th consecutive game-by-game increase on the NY RSN. Lin’s popularity keeps growing.
Bob correctly notes in the comments to the original post that the increase in secondary market ticket prices doesn’t necessarily mean that demand for Knicks games has increased because of Lin. It may be a supply decrease that is causing prices to increase.
John’s tweets gives us a quantity demanded measure, albeit from a different (but related) market. His second one I think can be safely assumed is at a constant “price” (0 at the margin assuming that the viewers of the NY RSN were already subscribers this season before Linsanity began).
A TSE reader, Jeff Baird, steered my attention toward an Economist article on Draft Dodgers No More: Can The Dominican Republic Avoid Puerto Rico’s Fate? MLB included Puerto Ricans in the draft starting in 1990, causing most observers to expect an uptick in PR player signings. Instead, the draft and its age restriction led to a decline of the inflow of PR players:
whereas Puerto Ricans could previously be signed at age 16, a high-school degree (usually given at 18) is required for the draft. Since the island’s schools do not have baseball teams, its 16- and 17-year-olds had nowhere to train. As a result, the number of Puerto Rican MLB signings fell by 13% in 1991-92. Meanwhile, players from the Dominican Republic (DR) and Venezuela remained free agents. Their numbers soared
Baseball is waning in PR — fewer MLB players, cancelling of the winter season, abandoned fields. The article notes additional influences — better alternative opportunities and competition from other sports — but this 1990 shift may well be a substantial contributor.
Now the gunsights are on the DR. As signing bonuses have exploded, MLB and the players union agreed to cap them. In addition, the article notes the likelihood of an international draft to begin in 2014.
Two elements of the PR story really catch my eye. First, the age restriction. Of course, one would suspect that would initiate a nice business in forged birth certificates, a practice not unknown in the development of Latin players. The other aspect is the draft itself. Superficially, this institutional change seems to be more inclusive. Instead, instituting a system that leads to a one-sided choice in a matching problem as opposed to a two-sided choice may be more exclusive. This is what I explored in The NFL Draft: Shotgun Marriages v. Marriages “For Love.”
If the draft is instituted for DR players, it will be an opportunity to test these ideas. Of course, to the DR players (and the country, as the article notes), the issue goes way beyond academics.
(I just put an idea into a marketer’s mind somewhere but moving on …) To put Tuesday’s developments in perspective, the Pac-12 and SEC released their schedules in late December and early January. The delay also means it’s a sellers’ market, if you’re a football bottom feeder willing to yourself to the highest bidder. There is talk of I-AA schools (FBS) with openings on their schedule getting $800,000-$1 million to come get their butts beat by a BCS school.
That’s Dennis Dodd at Dodds and Ends (via John LaPlante). The price doesn’t surprise me a bit for two reasons. First, payouts to so-called cupcakes have been trending higher in recent years and, second, the conference realignment that switched into high gear when Mizzou began looking to leave the Big XII should have accelerated that trend.
Playing schedules, which are usually set years in advance, had to be completely redone in a matter of months. Contracts had to be broken or renegotiated. Teams that a year ago had all their dates set now found they had open dates that needed to be filled and filled fast. The cupcakes found themselves with new suitors.
Several years ago I asked a handyman, who was doing some work in our house, how he set his hourly price. He said that it depended on how busy he was. If he was very busy, he’d shoot the potential client a higher price than he would if he had time on his hands. That makes a lot of sense because when he’s busy, the opportunity cost of his time is higher than if he’s not so busy and the client needs to make it worth his time.
The sorts of incentives that drove our handyman to set his particular price are alive and well in the market for cupcakes. And, yes, it is damn good to be the cupcake.
A really interesting paper courtesy of Brad Plumer of the Washington Post.
How popular is soccer? Popular enough to bring financial markets to a halt, it seems. A new paper (pdf) from the European Central Bank finds that during the 2010 World Cup, the number of stock trades plunged an average of 45 percent in countries whose teams were playing at the time. (A goal caused a further 5 percent drop.) “We conclude,” write Michael Ehrmann and David-Jan Jansen, “that stock markets were following developments on the soccer pitch rather than in the trading pit.”
But something tells me that FIFA isn’t going to publicize this paper by telling everyone, “Thanks to the World Cup billions of dollars of financial transactions are lost every four years.
