Free as a Bird

"Help, I need somebody,
Help, not just anybody,
Help, you know I need someone, help.

When I was younger, so much younger than today,
I never needed anybody's help in any way.
But now these days are gone, I'm not so self assured,
Now I find I've changed my mind and opened up the doors.

Help me if you can, I'm feeling down
And I do appreciate you being round.
Help me, get my feet back on the ground,
Won't you please, please help me.

And now my life has changed in oh so many ways,
My independence seems to vanish in the haze.
But every now and then I feel so insecure,
I know that I just need you like I've never done before."


- Posted using BlogPress from my iPad

Mr. Moonlight

The rain sounds perfect this morning.

Hey Wait Mr. Postman!

Remember me?

Starting tomorrow and daily afterwards, I'm swinging a comeback.

Tie yourself in.

Wouldn't Recommend Stirring a Brew

"Excessive vacancy, well maybe

In the shadow of an eye

All the strangers pass through

Where the rules just don't apply"

~ CKY

Camp Kill Yourself!

Cleaning House

GHOST WITH A BONER!

Hooray! My house now resembles just-moved in condition after a hard year of scrapping useless old things. I'm not starting fresh, instead simply freeing up space for new creative thought. Dad always said a cluttered office means a cluttered mind.

Practice doesn't mean perfect. Alternatively thought as an ironic means to an end of infinite learning and development. Conceptually this can be applied to everyday life, work, and self-aspirations; musically it remains the single core aspect of maintaining talent. Every young musician euphorically smiles when they first experience creating melodic sound in desire to replicate the music they admire. Yet inevitably those who practice to develop their own unique craft transcend ideas beyond knowledgable understanding.

Sounds far out but consider the obvious: there is only one Jimi who sounds like Jimi, only one Eric who sounds like Eric, only one Duane who sounds like Duane, only one B.B. King who sounds like B.B. King, and many other legends (hopefully you catch my drift already). Collectively they share the same unique creativity - the passion and ability to play their instruments differently than anyone before them. Thus creating ideas of which none in the musical world knew or comprehended, and it is these same ideas that music lacks today.

Long story short, Chill Bill has influenced the essence of practice back into my routine. Soul refines sound.

I Love Diarrhea Planet

I broke my nose tonight at the most legendary show ever. Long live Diarrhea Planet!!!

Hey look I see some Jeffers Morning Wood (Mustache Ride)

Now is my time to return

And I ride upon the white horse that fears no death.

"Well, I woke up Sunday morning
With no way to hold my head that didn't hurt.
And the beer I had for breakfast wasn't bad,
So I had one more for dessert.
Then I fumbled in my closet through my clothes
And found my cleanest dirty shirt.
Then I washed my face and combed my hair
And stumbled down the stairs to meet the day.

I'd smoked my mind the night before
With cigarettes and songs I'd been picking.
But I lit my first and watched a small kid
Playing with a can that he was kicking.
Then I walked across the street
And caught the Sunday smell of someone frying chicken.
And Lord, it took me back to something that I'd lost
Somewhere, somehow along the way.

On a Sunday morning sidewalk,
I'm wishing, Lord, that I was stoned.
'Cause there's something in a Sunday
That makes a body feel alone.
And there's nothing short a' dying
That's half as lonesome as the sound
Of the sleeping city sidewalk
And Sunday morning coming down.

In the park I saw a daddy
With a laughing little girl that he was swinging.
And I stopped beside a Sunday school
And listened to the songs they were singing.
Then I headed down the street,
And somewhere far away a lonely bell was ringing,
And it echoed through the canyon
Like the disappearing dreams of yesterday.

On a Sunday morning sidewalk,
I'm wishing, Lord, that I was stoned.
'Cause there's something in a Sunday
That makes a body feel alone.
And there's nothing short a' dying
That's half as lonesome as the sound
Of the sleeping city sidewalk
And Sunday morning coming down."

Insider Info

If you read this then you now know about the upcoming power Jeffers Morning Wood

Fucking Righteous

Green Day

Once upon a time nice and genuine people thrived in a twisted world. The ideals of Buddhism and all religions in general rely on the karma of good/bad people. Yet I am unable to achieve or see such circumstances.

When I was young, I detested the Green Day song "nice guys finish last". Nowadays I see the paradox that they broke; I realize no matter how hard a human being tries to be conventional only to be denied their unselfish ambitions. When blood is shed, you better just back up and make the other bleed worse.

Good karma always brought shit luck!

Inconsistently consistent.

Whamola!

Just like that the surprise knockout punch from the unknown knocks the wind out of me.

And then there were two....

I Don't Quit.

Possessed?

Oh Insidious, is my house or am I now haunted?

Dailey News

Whattttttt

Back on Track

Been derailed recently... Focused back on progression through words of a dear friend. Plus a haircut never hurts!

Sage

"I am unsure of things on a daily basis...very signature of the times and more importantly our age. Nothing is stable, we have no money, and we don't know what the fuck we are doing with our lives....don't let that stress you though, it's dumb. Life is short, do what you want and make the most out of every moment you have."

Classic Retweet

That was easy

The Breath You Take

The moment is now, a chance you must take.

I've foregone the standards those who once stood next to me adhere to. Understanding the pressures of uncertainty by finally immersing myself in distorted waters releases the happiness sought. Soul power transcends nominal realities with real perspective. Life lived by lifestyle is enough for me.

New Mornings are about to wake everyone the fuck up.

Weeks have past as I finish transitioning into my new independent days. Time appears manipulative whenever necessary, while sleeping in yet arriving prominent...

...more on this later.

Long live Diarrhea Planet!

And long live every one I know!

Apology

Sorry I've been golfing

Loop Boop Faroop!

Kit has been stomping on too many crabs....

Yeah yeah yeah I know I haven't been posting for awhile...

(already reproduced excuse)

Transitioning into a new life style without familiar foundations creates distortion. A horrific darkness that looms over some-what regular decisions. Yet as usual, the great fruits of life transpire into terror in traditional fashion.

Don't worry, I'll be 777% back now.

Warm up those stupid jumping ship too early stories.

Imagine what swish/swish/swish can do...

Oh wait? But first:

Are you experienced?

Hunter S. Stompson

A new legend has been conceived from similar ingredients of the previous brew. Immediately the music happens and everything has returned to a more advantageous norm. More remarkably is the ability to finally combine four souls towards mutual conquest. Ladies and Gentlemen, the rains caused from The Falcones will soon become storms.

Thanks to the noise marines:

Schmegma

Free as a Bee (Moth)

"I'm free now to direct a movie

sing a song, or write a book about yours truly

how I'm so interesting, I'm so great

I'm really just a fuckup and it's such a waste

to burn down these walls around me

flexing like a heartbeat

we don't like to speak

don't talk to me for about a week

I'm sorry, it just hurts to explain

there's something going on that makes my guts ache

I got guilt, I got fear, I got regret

I'm just a panic-stricken waste I'm such a jerk

I was honest, I swear

the last thing I want to do

honest, I swear

the last thing I want to do

is ever cause you pain

I'm free now

free to look out the window

free to live my story

free to sing along

I'm free now to direct a movie

sing a song, or write a book about yours truly

how I'm so interesting, I'm so great

but I'm really just a fuckup, it's such a waste

to burn down these walls around me

flexing like a heartbeat

we don't like to speak

don't talk to me for about a week

I'm sorry, it just hurts to explain

there's something going on that makes my guts ache inside

I got guilt, I got fear, I got regret

I'm just a panic-stricken waste I'm such a jerk

I was honest, I swear

the last thing I want to do

honest, I swear

the last thing I want to do

is ever cause you pain"

Stomper Stomp

Unfortunately my best friend, ally, and sexcapade co-author, is leaving the band due to life circumstances. I totally understand and am deeply saddened... forever I will dream and think of the music that was never created.

Fortunately Subaru Weekends are immortal and continue to live on!

Life was Deservingly Observant.

So I'm sitting caddy corner at a dance club deep in Atlanta. All I think about is to realize how fun and hilarious this subculture continues to retain stupid ideals.

What makes this a post is simply how retarded the scene is. Sorry I don't fit in; I would back home, but this is the life I decided to forego to find a true inner meaning. And am glad for it.

Nirvana Will Have Her Revenge

"It's so relaxing. To hear that you're asking whenever you get your way. It's so soothing to know that you'll sue me, this is starting to sound the same"

I Need It

No I mean it. But really temptation might be the basis of our reality, however culture continues to define every feeling and action. Not to seem generic, but when you compare the ideals of the modern thought to those of the 20's you realize the correlation between the Speak Easy rebellion to the Sonic Youth Revolt. That's why music sucks right now; it's why everyone around me doesn't get that they have been there and done that while refusing to realize subjection.

Unique.

When shit hits the fan true identity becomes shattered

Locals

What happened to Athens? Why have all the rock driven locals suddenly vanished from the youth ranks and been replaced with hipster "I don't give a fuck" people who show no appreciation for the greater whole?

I am not tarnishing the reputation of the great fans and people I've met around at town, simple asking the world why so many fantastic acts go unnoticed while annoying rock bands flourish in this town nowadays. Hmmmm seems like the game is afoot with this mystery.

Barons of Tang

Btw the Barons of Tang headlined our Friday night set. They are from Melbourne, Australia and absolutely kill their live show. Some of the sharpest antics and incredible grooves blasted out from the Caledonia. Gypsy Deathcore will forever hold a fond place in my heart!

Been Around While

Once again, slack effort on blogging recently. The lack of much spare time can be deemed the culprit, or my own unfinished and evolving thoughts. Life seems to be flying by my eyes but then again thats summer in Athens for you. Fortunately any time spent Subaru Weekending with SDJ engrains all the memories I will retain from this awkward transition phase of my life.

Definitely my first post using my iPad, so if it shows up strange blame technology!

Music has been swirling through many dimensions over the past 2 months. Josie constantly demands to be taught new tricks and my fingers have delicately and violently been perfecting our craft. Swimming in the depths of new influences and experiences, an average walk in the park with her creates melodies and infectious notes that spark the inner soul. By miming others, learning new tunes, and just expanding my musical horizon, I have found myself in love with what I am doing.

This isn't a blessing or a curse, it's simply beautiful

Last Friday The Falcones took he stage under familiar light. However the crowd was raging, a mob scene in most other venues, to our tunes. In response we cut loose the boundaries of the performance and unleashed a rare breed of rock n roll. Had it not been for a slight hesitation, I might have done something really stupid at the end of that set.

- Posted using BlogPress from my iPad

Return Trip

I admit it, I've been way to slack on posts obviously but have no worries because the blog is coming back at you with a head full of steam. Since my last post many new realizations and discoveries have unearthed before my mind, just needed the time away to fully develop understanding about what has been going on. Expect to hear back soon, its time to unleash rock n' roll fury people.

Look out the Georgia Theatre is back!

Coke-Roach Blues

Athens needs a lethal injection. The veins of this town have not run dry,but simply infected with hipster-mediocre "rock". Well its come time to replace that stupid bullshit with the integrity of Athens Rock N' Roll: distort those sounds and smash a heavy a drumbeat more intensely than ever before; because killer tunes crush the delinquent behavior of the scene around.

Or if your seeking a serious laugh...

Nowadays people feel entitled to everything

despite no actual recognition of their achievements

SpiderMoth

Loose Ends

Falcones

Diarrhea Planet

Jeffers Morning

"Theres not a hell of a lot you can do, because it's lights out for you.

She scans the room for a star to consume, when eye contact is made

as it just son fix your grave, it's lights out for you."

Welcome to the rock show: we've got rad punk, infected pop, six-piece crowd surfering, and killer frontmen, all creating the most inspirational forms of conscious. You'll leave with your ears ringing and limbs exhausted. To the unprepared: If any thing goes wrong, always rely on the bass-player.

Oh no, it's broken...

Whenever the Throat Arrow Monster's [pedal board] is disturbed, usually 20 minutes of consoling are in order. For some odd reason, transpiring negative energy by smashing my hand into the crucial green noise marine provoked Josie to instantly resurface. She barked with anger as inebriation fought against her; inevitably no mistress will ever be able to co-exist with that kind of fiery spirit.

The Fruit That Ate Itself

Punky Jorie

"I can't believe someone would attempt to bring you down on your graduation day."

SDJ quietly told me

I'm Taken

Everyone meet Josie!

Criminal Activity

Hey world listen up!

The Falcones Were Raised Better Than That

http://thefalcones.bandcamp.com/

Combinations

Sir Psycho Sexy met the Reaper. The outcome was terrifying beyond doubt; not only can Josie's screams be heard from further away, but her sweet roar pierces through anything blocking our path. The storms brewing around this town attempt to sooth and quiet her, however I've got a different plan in store for this drama.

April 29, 1992

There was a riot on the streets,

Tell me where were you?

Mothball's Senior Thesis

The Efficiency of NFL Team Payroll Allocation

Economics Spring 2011

Prepared by

Charlie "Mothball" Wood

Athens, GA

Mothball7@gmail.com

4/22/2010

Abstract

This paper assesses economic efficiency in paying professional football players lucrative salaries in order to elicit maximum on-field performance. Under the current National Football League Collective Bargaining Agreement team franchises must allocate their player payroll within a fixed salary cap each year. Salaries should be representative of each individual player’s performance production level if efficiently allocated by team management. Exploring statistical data from the 2009 season, I construct a unique index combining variables of salary and performance to measure efficiency by player, position, and team success. My data range includes the majority of starting players from the season as well as team statistics. In order to properly test my hypothesis, I model my approach and interpret my results similarly to Haugen’s 2005 study “Team Success and Personnel Allocation Under the National Football League Salary Cap.”

The Efficiency of NFL Team Payroll Allocation

Efficient allocations of team salary among players determine success in the National Football League. Making the play-offs or consistently achieving above .500 winning records has distinguished the successful franchises over nearly a century of league existence. Inside the NFL labor market teams operate as competitive businesses: each striving for a majority share of the market by employing talented athletes to gain a competitive advantage over the other franchises. Professional football players manufacture the entertainment league customers demand; the product quality depends on their willingness to perform. Salary cap restrictions each season force franchises to structure pay scales appropriately among a 53-player roster. Rational logic suggests the most talented players should receive the highest proportions of team salary; i.e., salary received for their performance should accurately represent the revenue they generate for their team on Sundays. However a growing amount of the league’s top performing players each season receive some of the lowest salaries paid by their team. Even more surprising, the majority of successful franchises from the 2009 season maintained the lowest total salaries in the league. This glaring disequilibrium between salary wages and performance production indicates an inefficient economic trend growing throughout the NFL labor market.

The sports media construes this phenomenon by painting specific top-salary players as lazy and greedy once they receive their enormous payday. Over-paying a player who would have performed equally as well if he had received a lesser salary creates economic rent in this billion-dollar business. Consider the 2009 season: the top performing running-back, Chris Johnson, received a mere $400,000 in salary; while the highest paid running-back, Reggie Bush, received more than $3,000,000 and was not even the starter for his team. The social costs created from this salary disequilibrium diminish the importance of finding value players to contribute towards elite team performance.

Currently the NFL market faces a lockout between the players and owners in the league. Based around a revenue distribution conflict, the lockout has left fans in the dark about the nature of the league’s economic woes. In this paper, I establish an index to measure if the NFL labor market operates efficiently using empirical data from the 2009 season. Holding all else constant, if a team pays a player more salary, the Human Capital Theory suggests the player responds with equal increased performance production. However the recent observed trends in the NFL market spark a flaw in this concept. By assessing suspect efficient translations of wages into performance, I determine sources of disequilibrium in the NFL labor market. To my knowledge, a study of these measurable variables to create an observable model of economic efficiency has not previously been performed.

I. Football Labor Market

Despite economic hardship incurred during last year’s global recession, the 32 NFL franchises spent a staggering $3,417,540,230 solely on roster payrolls. Average salaries for each team ranged between $1.4 and $2.4 million dollars. Naturally gifted athletes dedicate their entire lives training to receive contracts for NFL employment.

Recognized in 1968, The National Football League Player Association represents all players in labor union negotiations with the NFL on salaries, benefits, and compensation. NFL salaries are comprised of game wages, investments, loans, endorsements, and other assets presented to the players. The Collective Bargaining Agreement grants players three tiers of different contract negotiation rights based on seasons accrued in the league. When a player signs with his first team, he qualifies into the rookie tier and is therefore required to sign a contract not exceeding four seasons. After three accrued seasons, a player with an expiring contract becomes a restricted free agent. His respective team has the right to retain his services through a restricted tender above the league minimum salary. If the team fails to tender him, any other franchise may negotiate a new contract. The final tier grants the player unrestricted free agent status allowing him to openly contract with any preferred team.

The conclusion of the Super Bowl Championship Game marks the beginning of the next season. A three-month long free agency period begins, allowing eligible players to sign with new teams. Generally the most talented free agents garner the largest salaries from bidding wars between teams. Common source information on performance statistics and salaries influences players to compare one another and use this as leverage to raise the nominal value of their contracts. Negotiations for a big name player especially tend to unreasonably inflate the nominal value of their final contract, diminishing the lower real value realized after payment. Guaranteeing the majority of a contract’s value to the player instills a negative incentive to relax and decrease his performance. A perfectly efficient contract should pay the player the exact amount their on-field performance merits. Franchises have the right according to the Collective Bargaining Agreement to terminate any player anticipated to make less of a contribution to the franchise’s ability to compete on the playing field (2006 p.41).

Each team has the ability to apply a franchise tag on one free agent each off-season. Tagging a player rescinds his ability to negotiate joining other teams while retaining a roster spot for only the following year. Consequently, the player must be paid the average of the top five salaries at his respective position. Somewhat of a last resort option, exercised franchise tags overpay players resulting in stressed, inefficient pay structures.

Dissatisfied players ineligible for free agency sometime elect to hold out of their contract at the start of the season. Typically players who hold out utilize their elite past performance as leverage to force their team to restructure the salary scale in years remaining on their contract. These situations directly inevitably decrease the resulting contract’s real value; the franchise winds up overpaying the player, and as a result of missed practice time, the player underperforms. Although very few players hold out each season, the media manipulates their high profiles to engender a negative public opinion about their salary frustrations.

II. Influence of Salary Cap

Unlike other major league sports, the salary cap acts as a mechanism to counter-balance unlimited free agency to maintain parity throughout the NFL. The current Collective Bargaining Agreement defines the salary cap as the absolute maximum amount of salary that each team may pay players and/or player affiliates at any time during a particular league year (2006 p.7). The ceiling hard cap is set at 57.5% projected team revenues less League-wide projected benefits divided by the number of NFL teams. Clauses in individual player contracts dictate what percentage of salary paid to each player counts towards the overall cap value of his team. Imposing the salary cap has increased competition among the labor supply of players each off-season.

Managerial strategy under the cap aims to pay top talent as little as possible in order to maximize overall talent at all positions on the team roster. As John Haugen indicates, NFL teams must efficiently allocate salary cap towards combinations of players to be competitive (2005, 56). Time spent assessing players’ statistics, game film, and ability to contribute to the ultimate team strategy pays huge dividends when rising young players sign cheap contracts and successfully perform. Teams focus on building around three to five core players for the long run, while allocating each season’s available salary cap space to role players who can assist the core and maintain a balanced team in the short run. If teams follow this example of building compatible player combinations, then “theoretically teams should be spending the most on the players that help them the most” (Haugen 2005, 58) instead of just employing the most talented players.

The hard salary cap and revenue sharing agreements unique to the NFL result in a more competitive and efficient market compared to other major league sports. By analyzing amounts spent on types of player positions, Haugen calculates the marginal effect of additional money spent on each position group. The following microeconomic budget constraint model illustrates allocation of team resources under the NFL hard salary cap.

Graph 1. Allocation of Team Wages Given a Salary Cap Budget Constraint

The two groups, labeled “Elite Positional Players” and “Average Positional Players”, are imperfect substitutes: as the amount spent on one group increases, the amount on the other group decreases. Convex isoquants in the budget constraint graph represent this property. According to budget constraint model theory, the isoquant tangent to the budget constraint line, or salary cap, indicates an efficient allocation of resources. Isoquants not tangent to the budget constraint line on the graph are inefficient; isoquants beyond the line are unattainable due to the hard cap salary restriction. Managerial strategy allocating increased proportions of available salary to elite players in one position group depreciates the talent of another position. Haugen expands this model in relation to team wins to show that spending more money on elite players without proper allocation of funds to average players leads to inefficient outcomes of team under-performance.

Setting team season wins as the dependent variable and dollar figures each team spends each player position as the independent variable, Haugen’s OLS regression results are consistent with a concept examined in Michael Lewis’s study of Major League Baseball: it is not necessarily how much money a team spends but on whom it is spent that yields efficient outcomes (Lewis 2003). Combining the independent variables results in the following regression equation model:

Wins = α + ß($CB) + γ($DE) + δ($DT) + ε($K) + ζ($LB) + η($OL) + θ($P) + ι($QB) + κ($RB) + λ($S) + μ($TE) + ν($WR)

Following up this model with two additional regressions to control for multicollinearity, Haugen excludes variables found as insignificant in the initial regression. Results from these regression models are organized into the following table. Dollar amounts are expressed in millions of dollars.

Table 1. Haugen Regression Results

Source: Haugen (2005, 58)

Multiple observations can be inferred from Haugen’s results. Positional Beta coefficients numerically indicate how much an increase in money spent on each position affects a team’s total wins. The significance columns in the table represent the coefficients’ p-values. Kickers and tight ends have a larger degree of influence on team success as inferred by their significantly high Beta coefficient values. On most teams, kickers end up scoring the majority of points yet only represent a small fraction of team salary. Tight ends have multiple responsibilities in a variety of different game situations. The few players considered elite at performing these responsibilities garner larger salaries because the position is fundamental to an offense. Another interesting observation is that, in the first two regressions, the coefficient for punters is negative and significant, and in the 3rd regression, the same can be said for kickers. This means that for every increase of $1,000,000 spent on punters (or kickers in the 3rd regression) a team wins ~1.3 fewer games. Perhaps the most striking observation from these results is that players commonly perceived as most important to a team – quarterbacks, runningbacks, wide receivers, and linebackers – do not have significant Beta coefficients. The results indicate teams tend to overpay or underpay players at these positions with inefficient disregard to positional synergies. Therefore Haugen concludes spending more on focal positions does not generate substantial marginal production, but the significant results obtained from kickers and tight ends suggest efficient managerial strategy can have some level of control over successful outcomes in the NFL.

III. Player Contractual Inefficiencies

Individual player’s situations can have an enormous influence on the NFL labor market and franchises’ ability to succeed. Over the past few years I have observed several flawed trends that must be accounted for prior to my empirical analysis. Contractual incentives appear to be a significant culprit in the creation of inefficiency among team players. Depending on the scale of incentive salary versus guaranteed salary defined in every player’s contract, players naturally respond to the incentive and distort the product the NFL strives to produce each week.

Quarterbacks commonly have clauses in their contracts linked to their statistics at the end of the season. When the player achieves the requirements of the incentive clause, additional salary is rewarded. For example, if the incentive is to achieve 4,000 passing yards, then the quarterback might attempt several risky throws to gain increased yardage to fulfill the clause requirements, disregarding his team’s objective of winning. Because making risky throws would not affect the player’s salary, he might be inclined to achieve his incentive agreement rather than making plays to win the game. Negative outcomes stemming from contractual incentives directly influence team success. Green Bay Packers runningback Ryan Grant provided specific evidence of this phenomenon during a 2008 game. In order to earn an incentive bonus worth $2 million, he needed 41 rushing yards in the final game of the season (Graben 2011). Grant repeatedly told his quarterback not to check out of running plays, even when the defense was prepared to stop that certain play. Contrary to this example, New England Patriots coach Bill Belichick agreed to pay a player’s incentive clause before the final game of the season regardless of if he achieved it. This managerial decision eliminated the potential for selfish play, realigning the player’s objective with the team’s objective to win the game.

Rookie salary trends represent perhaps the most glaring flaw in the NFL labor market. Every year the NFL holds a seven round draft in April where each team selects new players from eligible college pools. Determined by the prior season’s win/loss record, least successful teams retain higher draft order positions. Traditionally rookies selected in the first round automatically receive multi-million dollar contracts despite having never played an NFL-caliber snap. The term draft bust describes a player who is selected early in the draft and paid an enormous salary, then never lives up to the potential and hype the player received once in the league. JaMarcus Russell was drafted number one overall in 2006 by the Oakland Raiders and received a contract that guaranteed him over $32 million. The $32 million he received turned out utterly wasted on his lazy work ethic and inability to perform in the NFL; Russell no longer plays in the league. Teams who consistently lose and receive good draft position as a result, tend to continue poor management of player combinations. By preserving the negative cycle of error prone drafting resulting in dead weight salary loss, this trend of inefficient rookie salary structures persists to deepen the social costs busts create. On the other hand, successful teams with later draft order continue to generate success on the field from less talented drafted players. They represent the influence of strong management and the ability to identify diamond in the rough players whose low costs create increased value.

Conversely, there are instances when paying a certain player a high salary can be beneficial to team success despite inadequate translation into performance production. Last year, the Atlanta Falcons dealt a contract worth $57 million to free agent cornerback Dunta Robinson. In his first season with the team Robinson’s statistics regressed and he did not perform like a top five player as his yearly salary amount suggests. However the Falcons’ defense improved dramatically despite his lack of performance production. Examining this odd occurrence reveals a subjective benefit created by Robinson’s presence on the field. Opposing teams refused to challenge him by avoiding throwing the ball his way, thus eliminated his side of the field to defend and allowing the other Falcons defenders to produce better statistics. The incredible 14-2 season the team accomplished this year might serve to justify such an expensive hiring; however, examples similar to this instance rarely occur and usually result in an expensive, inefficient contract.

The concept of Pareto Efficiency implies changes in input allocations will make some outcome better off without depreciating other outcomes. If the economic system lacks Pareto Efficiency, then certain variables must be altered to achieve this equilibrium. Revenue sharing in the NFL attempts to establish Pareto Efficiency. Teams that have lower income and spending money are proportionally distributed additional money from the higher income franchises. Continuing to create mechanisms inside the NFL labor market that induce parity is part of the reason more customers are drawn to the NFL every year. Another example of such mechanisms, the NFL’s Performance-Based Pay Program, attempts to reward over-achieving players whose performance greatly exceeds their salary. Created by the 2002 Collective Bargaining Agreement, the program distributed approximately $109.5 million to eligible players in 2009 (National Football League 2010). Effective only during salary cap imposed seasons, the program computes performance-based pay rankings using this player index:

Total Plays on Offense, Defense, and Special Teams

/

Full Season Salary + Prorated Portion of Signing Bonus + Earned Incentives

The produced number equates to a ranked position. All results are sorted by descending order of over-performance rank and pay is accordingly distributed. Since its existence, the program offers incentives for low-income players to max out their performance production. Creating my own ranked player index off of this official program influences my own measure of efficiency among players regarding their positions.

IV. Empirical Analysis

The Human Capital Theory states that laborers will receive a wage that corresponds to their projected output (Haugen 2005, 28). Awarding a talented player with a salary higher than another at the same position indicates a higher expected performance value. If the player underperforms and returns less performance value than expected by his salary level, the team is inefficiently allocating their resources.

My player efficiency index defines salary by combining the player’s 2009 base salary with any signing bonuses received or incentive clauses earned. The amounts are ranked by position, breaking down all NFL rosters to analyze different categories of players. A player-rating system based on offensive and defensive statistics comprises the measure of individual performance production. These statistics are adjusted to proportionally represent contribution to the respective team. Combining both ranks for each player into a list determines the final rankings. Uniformly using rankings enables my research to examine real values, eliminating the discrepancy between nominal salary levels across the different positions. To determine efficiency:

Salary Rank at Position

/

Performance Rank at Position

A result equaling one indicates a perfectly efficient player whose salary 100% translates equally to his performance. Assuming the NFL is efficient, the results of my index should not be significantly different than one. Since rosters include multiple players at each position, I choose sample sizes large enough to represent the different populations of starters and backups. The population in my empirical analysis is assumed to be normal. Position groups were randomly sampled by drawing numbers without replacement; selected numbers correspond directly to the population salary rankings of all players in the league who play that position. Since teams usually maintain only one kicker per season, my data represents the entire population of 37 kickers who attempted field goals or extra points that season. The following table describes the duties each position group included in my analysis performs.

Table 2. Positional Duties

Quarterback - Offense - Throw ball to offensive players, hand off ball to players, manage game calling decision delegated from coaches, call plays

Runningback - Offense - Advance ball towards end zone, catch passes, block and protect quarterback

Wide Receiver - Offense - Catch passes and advance ball towards end zone, block for other teammates during situational plays

Tight End - Offense - Same duties as Wide Receivers, position requires greater size as majority of duties are to block and protect quarterback

Linebacker - Defense - Tackle ball carrier, cover opposing offensive players, cross line of scrimmage to disrupt quarterback

Defensiveline - Defense - Opposes the offensive line, create a wall to impede opposing offensive advancement, disrupt quarterback

Kicker - Special Teams – Kick extra points after touchdowns, attempt 3-point field goals when team is unable to reach endzone

Upon initial evaluation of my results, one specific error in the index immediately stood out: any deviation from the mean efficiency represents inefficiency. Despite creating additional productivity from over achieving players, under-valuing them also is inefficient according to the Human Capital Theory. The limit constraint for over-valued players also distorts the results of my data because the lower bound cannot be less than zero. Reassessing the original formula to correctly account for over-valued players and represent overall inefficiency, my index simplifies to:

Salary Rank – Performance Rank

Incorporating the previously used 2009 data, my updated index properly eliminates the pervious bias. An index value resulting in zero would indicate a perfectly efficient player. Under-performing players are represented by negative values and over-achieving players by positive values. To correctly account for the produced negative values, the standard deviation of each sample measures the level of inefficiency in each position. Higher standard deviation values indicate greater disequilibrium in the NFL labor market for that position. Broken down into seven position groups, the updated results are presented in the following table; full data tables for each position can be reviewed in the appendix.

Table 3. Overall Position Salary and Performance Efficiency

QB / RB / WR / TE / LB / DL / K

Mean: 0 / -0.4 / 0.63 / -0.026 / -0.037 / -0.173 / 0.27

Sample Size: 51 / 70 / 73 / 78 / 81 / 75 / 37

Min: -40 / -60 / -58 / -62 / -68 / -63 / -23

1st Quartile: -6.5 / -21.75 / -24 / -27 / -36 / -35.5 / -8

Median: 1 / 0 / -1 / -5 / 4 / 7 / 1

3rd Quartile: 7.5 / 22.75 / 25 / 31.25 / 38 / 30 / 7

Max: 30 / 57 / 65 / 57 / 69 / 63 / 29

Standard Deviation: 13.479 / 29.274 / 31.502 / 31.918 / 39.218 / 36.568 / 13.048

Variance: 181.68 / 856.968 / 992.375 / 1018.753 / 1538.08 / 1337.2 / 170.3

The nearly identical standard deviations of quarterbacks and kickers are the closest to being considered efficiently paid positions in relation to the other positional groups. Since teams maintain only one starting player for both these positions, management would spend more time and effort to identify the right guy for the job. Consistent with Haugen’s research, talented kickers significantly influence success if managers allocate salary efficiently to them. The other skill position groups’ standard deviations are higher due to the different types of players at each position. Depending on a team’s strategy, these players can be interchanged based on the nature of the offensive and defensive schemes. When a highly paid player underperforms at one of these multi-personnel positions, replacing the player with a lower cost overachiever tends to be easier than replacing an integral piece of the puzzle like the quarterback. Although success might be achieved with a lower cost replacement, the original managerial misjudgment allocating higher salary to the less effective player still creates dead weight loss from the disequilibrium.

A graphical manifestation of the index values from my analysis provides an easier way to observe the salary and performance disequilibrium between the sampled positions. The following two graphs represent contrasting trends in the data. Additional position graphs, as well as data tables, can be found in the appendix.

Graph 2. Quarterback Salary and Performance Efficiency

Graph 3. Runningback Salary and Performance Efficiency

The shapes of these graphs indicate several of the observed trends in NFL salary economics. Quarterbacks face more scrutiny by teams considering there can only be one starter. Nowadays, the main ingredient to team success greatly relies on elite quarterback performance; therefore teams try their best to find the correct guy and pay him appropriately. Although the graph shows the inefficiency across the salary board, the nearly uniform balance among quarterbacks creates a notion that salary is more appropriately allocated. Comparing the quarterbacks graph to the runningbacks graph emphasizes the intensity of inefficient salaries effects. Highlighted by the skewdness on both ends of the salary range, the runningbacks graph illustrates how lower paid players produce more value than elite big names. In addition to providing increased value, teams who construct positional players with lower paid players avoid the detrimental economic rent associated with allocating immense salary proportions to one top-name player. Corresponding with the concept presented by the Salary Cap Budget Constraint Graph, teams are better off if they allocate evenly across all positional groups. The difference between players paid top ten salary and players in the mid 30s-40s is millions of dollars. Marginal production of the top 40 salaries is minimal, while the marginal cost of paying those players high salaries increases. Instead of paying a few elite players to lead the team, spreading the available salary across the entire team maximizes a team’s chance for success. Compare the Washington Redskins, who spent the majority of their salary cap on three or four star players, to the Packers, who allocated their salary cap across every position. In 2010, the Packers won the Superbowl, while the Redskins failed to even achieve a winning record.

V. Conclusion

Inefficient systems create economic and social costs for everybody. Correcting the flaws proposes overhauling many processes that have become standards in the NFL labor market. Teams with proper allocations of roster salary minimize the effects of contract inefficiency. Perhaps in the future my results can be examined to break down players’ contracts with their teams in relation to previous seasons. Comparing the trends of contract inefficiency over the history of the NFL would narrow down the exact causes of this problem. My analysis identifies the NFL labor market has been stuck in disequilibrium from inefficient contracts awarding uneven salary for performance.

References

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Conlin, Michael, Patrick M. Emerson. 2003. “Multidimensional Separating Equilibria and Moral Hazard: An Empirical Study Of National Football League Contract Negotiations” The Review of Economics and Statistics, 85(3): 760-765 Accessed February 20, 2011 https://www.msu.edu/~conlinmi/ReStat2003.pdf

Graban, Mark. 2001.“Individual NFL Player Incentives – Why Are They Necessary? Do They Distort the Game?” Lean Blog. Accessed March 7, 2011 http://www.leanblog.org/2011/01/individual-nfl-player-incentives-why-are-they-necessary-do-they-distort-the-game/

Hadley, Lawrence, Marc Poitras, John Ruggiero, Scott Knowles. 2000. “Performance Evaluation of National Football League Teams.” Managerial and Decision Economics, Vol. 21, No. 2 pp. 63-70 Accessed March 5, 2011 http://www.jstor.org/pss/3108334

Haugen, John. 2005. “Team Success and Personnel Allocation under the National Football League Salary Cap.” The Park Place Economist, vol. 14 Accessed April 1, 2011 http://www.iwu.edu/economics/PPE14/Haugen.pdf

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National Football League. 2010. “Vikings’ Sullivan leads NFL’s performance-based pay list for 2009” NFL.com. Accessed March 2, 2011 http://www.nfl.com/news/story/09000d5d81719d15/article/vikings-sullivan-leads-nfls-performancebased-pay-list-for-2009

National Football League Players Association. 2006. “NFL Collective Bargaining Agreement” Accessed January 28, 2011 http://static.nfl.com/static/content/public/image/cba/nfl-cba-2006-2012.pdf

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Appendix

Graph 4. Wide Receiver Salary and Performance Efficiency

Graph 5. Tight Ends Salary and Performance Efficiency

Graph 6. Linebacker Salary and Performance Efficiency

Graph 7. Defensive-Live Salary and Performance Efficiency

Graph 8. Kicker Salary and Performance Efficiency