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Let Freedom Ring - Busting the Myth of the Salary Cap

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Old 01-10-2009, 09:22 AM   #1
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Let Freedom Ring - Busting the Myth of the Salary Cap

Interesting piece from Baseball Prospectus, a very reputable site known for some of the best statistical analysis in sports.

The article examines the flaws in the NFL, NBA and NHL salary cap/revenue sharing systems, and asserts that baseball has the best system for balancing franchise profitability with parity on the field.

Before I give my opinion, I thought I'd present this to the group here and solicit thoughts, as it may be relevant to the NFL as the league heads for an uncapped season in 2010.

Baseball Prospectus | Let Freedom Ring
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Old 01-10-2009, 10:37 AM   #2
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Re: Let Freedom Ring - Busting the Myth of the Salary Cap

Very interesting article. There's a major flaw in the reasoning however. The clincher to his argument of MLB having the most parity is that MLB has a postseason that "naturally create[s] tremendous parity."
That is a more a result of the nature of the game than it is the expanded playoffs, or any systemic element of MLB. It simply wouldn't translate in the NFL. In baseball, the best team wins 60% of the time, while in football that number is typically above 80%. The baseball playoffs are a crapshoot, but in football the best team typically wins (last year's results an obvious exception; or not, but that's an entirely different conversation).
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Old 01-10-2009, 01:01 PM   #3
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Re: Let Freedom Ring - Busting the Myth of the Salary Cap

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Very interesting article. There's a major flaw in the reasoning however. The clincher to his argument of MLB having the most parity is that MLB has a postseason that "naturally create[s] tremendous parity."
That is a more a result of the nature of the game than it is the expanded playoffs, or any systemic element of MLB. It simply wouldn't translate in the NFL. In baseball, the best team wins 60% of the time, while in football that number is typically above 80%. The baseball playoffs are a crapshoot, but in football the best team typically wins (last year's results an obvious exception; or not, but that's an entirely different conversation).
Excellent point and one I had thought of immediately when reading the article. In addition, football is a sport that lends itself to dynasties because of the nature of the QB position. Montana's 49ers, Bradshaw's Steelers, Brady's Patriots, Manning's Colts, Aikman's Cowboys, etcetera. When one player touches the ball on every snap for the offense, and you have an EXCELLENT player at that position, you have a sport that lends itself to less parity. Baseball does indeed have a position that impacts the game like the QB does: pitcher. But the difference is pitchers only throw once every five games. QBs play every game.

Parity is indeed more intrinsic to baseball as a sport than football. All the more reason why football needs a cap, while baseball can (arguably) be successful without it. But to suggest that baseball's financial system is responsible for baseball's parity would be wrong.

Anyway, I'm still interested in what others think about this. Whether it's a comparison of parity in the various sports, or the logic the author used when suggesting cap structures for baseball, or the argument he makes that with a cap small market teams are destined to go out of business.
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Old 01-10-2009, 03:39 PM   #4
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Re: Let Freedom Ring - Busting the Myth of the Salary Cap

The intrinsic nature of baseball can be attributed to a larger sample size. The signing of a quality free agent in baseball has approximately 10x the amounts of chances to actually "improve" a team over all. It's all about the sample size. In football free-agents get 16 games to make a difference. Miss a game because of injury...it's like missing 10 games in baseball. Miss 4 weeks...it's like missing 40 games. The small sample size really skews the effects of talent. Similarly like Schneed has pointed out a superior talent that literally wins you two or three games is like signing a baseball player who single-handedly wins you 20-30 games. That doesn't exist. The best players in the history of baseball at best won games for their teams maybe 15 times a year on average.

I think what the author is missing is that potentially the argument isn't about hard/soft/no cap but more about whether it makes financial/logical sense for the likes of NY to compete with the likes of Buffalo in anything. It seems clear that a completely socialistic system would probably kill everything off since Snyder/Jones/Kraft types would stop trying so damn hard to make money(hurting the product in unpredictable but probably catastrophic ways). The mixture approach seems to work in the short run but it has to be managed and tweaked constantly to account for chaning environments and situations. Faced with also trying to appease a demanding players union I think the mixture approach might be doomed to fail in the long run since unions rarely seem to care or even understand complex market equations. It'd very hard to co stantly be finding the right emixture while also keeping the players happy when the players expect to never ever lose money. So it comes to to accepting a complete free market which undoubtedly kills offf the Buffalo types. I think we should should start preparing ourselves for that.
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Old 01-12-2009, 11:39 AM   #5
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Re: Let Freedom Ring - Busting the Myth of the Salary Cap

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So it comes to to accepting a complete free market which undoubtedly kills offf the Buffalo types. I think we should should start preparing ourselves for that.
so what if the buffalo-types are killed off? Football is just entertainment. The purpose of entertainment is to please as many people as possible. Teams like the bills, bengals, jaguars, vikings, etc have very small fan bases when compared to teams like dallas, washington, san francisco, etc.

If theres a system that results in the teams with the larger fan bases winning more... then so what? teams that are in small markets could disappear, but more likely... they would move to a market that has the fanbase to support it. For example, the vikings could move to LA, the Bills could move to Toronto, the Jags could move to mexico, etc.

In the end, there would be no cap, and teams with the most fans would generate the most revenue, and therefore be in good position to improve by spending more money on players. but all 32 teams would still be in a position to remain competitive, since all 32 teams would be geographically located where they would have strong fanbases.
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Old 01-12-2009, 12:52 PM   #6
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Re: Let Freedom Ring - Busting the Myth of the Salary Cap

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Originally Posted by FRPLG View Post
The intrinsic nature of baseball can be attributed to a larger sample size. The signing of a quality free agent in baseball has approximately 10x the amounts of chances to actually "improve" a team over all. It's all about the sample size. In football free-agents get 16 games to make a difference. Miss a game because of injury...it's like missing 10 games in baseball. Miss 4 weeks...it's like missing 40 games. The small sample size really skews the effects of talent. Similarly like Schneed has pointed out a superior talent that literally wins you two or three games is like signing a baseball player who single-handedly wins you 20-30 games. That doesn't exist. The best players in the history of baseball at best won games for their teams maybe 15 times a year on average.

I think what the author is missing is that potentially the argument isn't about hard/soft/no cap but more about whether it makes financial/logical sense for the likes of NY to compete with the likes of Buffalo in anything. It seems clear that a completely socialistic system would probably kill everything off since Snyder/Jones/Kraft types would stop trying so damn hard to make money(hurting the product in unpredictable but probably catastrophic ways). The mixture approach seems to work in the short run but it has to be managed and tweaked constantly to account for chaning environments and situations. Faced with also trying to appease a demanding players union I think the mixture approach might be doomed to fail in the long run since unions rarely seem to care or even understand complex market equations. It'd very hard to co stantly be finding the right emixture while also keeping the players happy when the players expect to never ever lose money. So it comes to to accepting a complete free market which undoubtedly kills offf the Buffalo types. I think we should should start preparing ourselves for that.
I would say that a player that can make a team two to three wins (consistently) better at football doesn't exist, unless were talking a player like Peyton who is not only the best in the league, but also calls his own plays, giving the offense an advantage even on plays where he doesn't throw.

Let's call Matt Cassel the average NFL quarterback. Probably an assumption on the high end, but it'll do for this point. How many more wins are the Pats worth with Tom Brady?

I tracked down this estimate table from the 2006 season. While some quarterbacks can, in fact, be worth more than 2 wins in a season, those seasons usually either fall in the outlier category, or under the category of Peyton Manning.

Back to Cassel, if we say that he was worth 0 wins above average, and that Tom Brady were, conservatively, the average of the top five QBs in a random year, we could safely say that (all else equal), the Patriots are somewhere between one and two wins better. Probably near 1.5.

Or the baseball equivalent of 15 wins. i. e. one of the best player in the game.

Read more here: This post is pretty simple, but no less brilliant

I should note that in baseball, that 15 wins figure is being compared to replacement level, or freely available talent, where as I'm comparing Brady to a league average QB in the same offense. So it's not exactly apples to apples.

However, the roster limits normally account for this. Football teams tend to roster a backup QB who generally has some playing experience and whom they believe to be better than replacement level. That's not the case in baseball, as the bench players tend to be on par with the best players on the AAA team.
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Last edited by GTripp0012; 01-12-2009 at 01:08 PM.
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Old 01-12-2009, 01:04 PM   #7
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Re: Let Freedom Ring - Busting the Myth of the Salary Cap

Now, the greatest QB seasons of all time (Manning 04-06, Brady 07, Marino 84, Young 94) are 3+ wins better than average, and since the position is so volatile, probably 7-8 wins better than the very worst seasons of all time. So there's a ton more variance in football than in baseball, which as FRPLG and Schneed pointed out, is a sample size issue.

So while I would agree based on that that QB is the single most position in sports, it's still not an important enough position to make or break a team. A great quarterback can consistently get an above average team into the playoffs, but the rest of the roster is so important in football because you have to build strong consistently to sustain winning.
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