Sunday, September 11, 2022

Not So Jolly Rodgers

"I just want to win."  How many times have you heard an athlete say this?  Coincidently it seems to happen significantly more often during a contract dispute.  "I just want to win" can be translated to "I just want more money."  It is like a pirate flagging you down saying "we just want to talk." Do they really?  Or, do they want all of your possessions?  

The athletes asking for huge paychecks saying they "just want to win" are either lying to themselves or they don't understand how a team works.  Let's put on our captain obvious hat for a second and give you the play breakdown for the finances of a football team.  NFL teams can have 53 players on a regular season roster with 48 suiting up for the game.  Lets say we round it to 50 for easy numbers.  We have to keep it simple because we're about as smart as the average football player with 4 concussions. 

The 2022 salary cap for the NFL is $208 million.  208/50 = 4.16 million.  So if you paid out the full $208 million (which most teams dont) and paid all the players equally (which no teams do) each player would get $4.16 million for the 2022 year.  It does seem to be the case that there are better players than others which means some players will be paid higher or lower dependent on their skills.  What do you think happens when a single player gets 10x that amount? (Of course we realize teams can go over the cap and some do, but this adds other significant costs to the financial puzzle.)

There are no doubts that the highest paid athletes are usually some of the very best.  Lets take Aaron Rodgers for instance.  The 2021 MVP of the NFL.  Who signed a new contract to be paid $42 million dollars for 2022 ($59 million for 2023!).  (Thats right he is paid 10x what the team average would be for full salary cap spend)  Rodgers now makes 20% of the entire team payroll.  If one player makes 20% that leaves 80% for the other 52 players.  This takes that average salary for the rest of the team down to $3.19 million.  Remember skill and compensation are linked.  What if for instance that Rodgers gets hurt?  That is the financial equivalent of 10 players getting injured at the same time.  If a team had 10 injuries in a game we think they would have a difficult time competing.

Rodgers had some off season criticism for some of the talent left around him.  Weird.  It is almost like they paid him so much they couldnt afford anyone else.  The addition of logic to this party just does not calculate.

The obvious problems is that money doesnt necessarily lead to wins.  (it does seem to help if you spend it properly though, especially in baseball)  Why is that?  Could it be because of overpaying for talent?  It looks like you are trying to win and it sure feels good for the fans when you have "that player" on your team.  When that player leads you to a #1 seed for the playoffs it feels even better.  But when the team gets knocked out of the playoffs in the first round... it seems a little less gratifying having "that player" on your team.

We are not saying that the best most talented athletes shouldnt get paid.  They should.  But we're not sure they understand the relationship of their impact to their team finances.  Every dollar the star gets is a dollar that doesnt go to another good player that could play on your team.  If you are the star player (good for you) and you really want to win there are a couple options to put that money to work.  

1. Take a lower salary in return for a guarantee the team will use the money you would have gotten to attract other talented players that can help you win.  2.  Take your maximum salary possible then give your own money towards other talented players on the team.  Have you ever heard of a quarterback offering financial compensation to their own teammates to incentivize play?  (We're not talking about like buying the O-Line a steak dinner if you dont get sacked)  We're talking about actual cash bonuses.  Like $500,000 if you catch 10 TD's.  Have you heard of a quarterback wanting to win so bad he gives $1 million of his own money to another player on his team?  Do you think the other players would play harder for the team?  How about an Aaron Rodgers team bonus pool?  You really wanna win?  Take $10 million of your own salary (yea tough year when you make only $32 mill instead of $42 mill) and put it in a team bonus pool based on whatever incentives you think are important to the team.  It could simply be a hard practice gets a rookie $5,000.  Run this out rout properly 10 times and there's a bonus.  Some of the veterans might not respond to 10 or 20 thousand but we bet some of the rookies would.

3.  Feel good about being the highest paid player.  Screw the team and bank cash until you can buy yourself an island.  Who really wants to win a stupid game anyways?  Its not like the fans judge success by wins and losses.  Its all about the 0's in the bank.  Just ask Tom Brady.  
 

Fart of the Deal

The belief in equaling out a trade deficit is admirable if you have no idea what a trade deficit is.  Let's take a life example.  Say yo...