Saturday, July 31, 2010

Book Review: NFL Record & Fact Book 2010

Another year, another edition of the NFL Record & Fact Book. I'll point you to my review of the 2009 edition for a basic description. Those of you familiar with the book know about what's there.

For my fellow obsessives who care about such things, I'll note the changes I see from the 2009 edition, good and ill.
1. Well, ok, this isn't a change, but once again the only thing we get about each game the previous season is the final score. The line score, scoring plays, and recap present in 2008 and previous editions is still missing.
2. Individual game scores for Sunday Night Football and Monday Night Football are now gone, replaced by a team's record by year and overall for each of SNF and MNF. Thursday individual game scores for past years are gone as well.

I guess the damage isn't too bad compared to last season, though of course that still makes it a lesser publication than it was only a few years ago. And, yes, as I noticed in last year's review, the same information is all or almost all available on the NFL's website and most or all of the stuff is also available online on P-F-R, but I'm sure I'll still keep The NFL Record and Fact Book 2010 on my end table until February and have it near me for quick reference when working on Football Outsiders Almanac 2011 as well.

Book Review: Stagg's University

Stagg's University: The Rise, Decline, and Fall of Big-Time Football at Chicago by Robin Lester tells the story of intercollegiate football at the University of Chicago from its origin with the origin of the University in the early 1890's until its abolition after the 1939 season. What's remarkable about how the book is just how modern the story seems. The issues of college football we argue about these days are hardy perennials:
  • Promotion of a football program for the university as a whole;
  • Exorbitant coaching salaries, linked to the revenues football brings in;
  • The continual battles between the coaching staff and the admissions staff over whether athletes can be admitted in the first place, and then the challenge of remaining eligible;
  • The division of faculty members and university administrators among those who support football, those who tolerate it as a necessary evil, and those who see it as detracting from the school's proper mission, and their concomitant reactions to support of the football program and the football players;
  • The challenge of remaining relevant with an aging coach and a university with declining resources relative to its peer competitors;
  • The influence of alumni and non-alumni supporters of the football program and their often outsize influence on the program and the university, including a proto-Bobby Lowder who served as a backflow channel for the football coach to the rest of the board of trustees;
  • Regional differences in perception, as Stagg's Yale pedigree earned early respectability for Chicago and the 1920's series with Princeton was one of the first between true regional powers;
  • A student body whose attitude towards the football team ranges from wildly supportive to tremendously apathetic to downright hostile to sports' outsize influence; and
  • The issue of what to do with a flailing football program that refuses to be resuscitated.
Like I said, a true modern story. What wasn't modern, but was instead quite unusual was Chicago's decision to withdraw from football competition altogether. Lester does a good job of laying out why and how such a decision was possible and actually supported by almost every constituency other than those die-hard alumni and non-alumni supporters.

As an alumnus of an undergraduate institution with a mostly flailing football team (Georgetown Univ.), the section on just how UChicago institutionally made the decision to drop football was something I was particularly interested in. It started with a period of long-term irrelevance, as Chicago declined precipitously after 1924 and fell from its national profile. Amos Alonzo Stagg's long coaching tenure ended after 40 years, and successor Clark Shaughnessy, despite being a tremendous innovator, lacked the same history of success and institutional and other support Stagg had enjoyed. Declining attendance had changed the football program from self-supporting and turning a profit to needing support from the rest of the university, which support the rest of the university was hard-pressed to provide thanks to lack of institutional support and declining financial condition thanks to a bad economic environment (including the Great Depression) creating lower enrollment and fewer donations.

In some ways, UChicago's peak from before its decline actually facilitated the dropping of football, as the decline from national champion and regular top 5 program meant the school preferred to drop the sport rather than compete with athletic peers who were its inferiors in terms of national prestige and academic reputation. Plus, of course, its president at that time, Robert Maynard Hutchins, who despite being an occasional tennis player once said "Whenever I feel like exercise I lie down until the feeling passes." Obviously, not the kind of administrator who was going to be hugely supportive of football, though Lester makes a reasonably convincing case Hutchins was not always intent on dropping football but instead was more than happy to do so when the right circumstances permitted it.

Anyway, if that's the kind of thing you're interested in, it's a reasonably interesting story. Stagg's University is an adaptation of Lester's Ph.D. dissertation at the University of Chicago, which means it has most of the same pluses and minuses of that genre. There's an index and footnotes (lots and lots of footnotes), both unusual for football books, but which I almost always enjoy. On the downside, Ph.D. dissertations, particularly at UChicago, are not necessarily noted for their extreme readability. Personally, I think "evince" is a greatly underused word and enjoyed Lester's use of it where appropriate, but I know not everybody has the same attitude. Beyond the words (and "evince" is not the only example I could have used, merely the one I enjoyed and noticed the most), it's definitely written in an academic style, replete with complex sentence structure. It bothered me not a whit, but again, I know not everybody likes that, so consider it fair warning. Overall, Stagg's University is probably not of enough general interest that I can wholeheartedly recommend it, but I regret neither purchasing not reading it.

Disclaimer: UChicago Law graduate.

Total Titans

New post up at Total Titans, the first in what will almost certainly be several roster predictions: the 53 man roster at the start of training camp.

At least one book review post up later today, since I finished Stagg's University.

Thursday, July 29, 2010

Total Titans

New Total Titans post, this one the OT positional analysis. Yes, I'll have my first roster prediction up by the time the first practice of training camp starts on Saturday afternoon.

I also responded to some questions from the SBN Jaguars site, Big Cat Country, about the FOA2010 chapter and what I think of some of the Jaguars players. Yes, too many typos.

Sunday, July 25, 2010

Total Titans

New post up at Total Titans, this one on whether CJ's low success rate in 2009 means bad things for 2010. Likely answer: no, not really.

Expanded Season Revenue: The NFL's Real Math Problem

Apologies to FO's colleague Doug Farrar, whose article over at Yahoo's Shutdown Corner, inspired the title for this post. Alas, Doug's article didn't answer the question whose answer I really wanted to know: how much more would the NFL make if the regular season was expanded to 18 games and the preseason was cut to 2 games? In fact, I haven't seen an answer to this question anywhere, and I think it's an important one as the CBA is set to expire in March 2011, so I thought I'd take a look at the question myself.

This question is an important one because, if the regular season is expanded, the players would see a reasonable increase in their real workload, one for which they would expect to be compensated. The first blush answer is that they'd be getting 19 paychecks instead of 17. As former Buccaneers defensive end Steve White pointed out, though, this is nonsense: the 19 paychecks instead of 17 is an accounting fiction. A similar argument would be if you went from being paid once a month to twice a month: you'd be getting more checks, but the same amount of money. The only way the players get more money if they're paid 19 times instead of 17 times is if the two additional games actually make more money. So, do they?

Well, let's look at how NFL teams make their money. Thankfully, we have somewhat detailed information on one team's financial revenues, the publicly-owned Green Bay Packers. Let's take a look at the statement of income, and the sources of income listed there:
I. Home games (net) and road games;
II. Television and media;
III. Private box income;
IV. NFL Properties income;
V. Marketing/Pro Shop (net); and
VI. Other-Local Media, Concessions and parking (net).
Let's take a look at each of these categories in turn:

I. Ticket Revenues
I've retitled this "ticket revenues" to try to simplify the category. For fiscal year end 3/31/09, the Packers earned slightly over $47 million in ticket revenue from their 20 games, 4 preseason and 16 regular season. As people have frequently written, NFL season ticket holders pay full price for all 10 home games, including preseason games. Whether or not this is a good business practice for the NFL is a topic for a different post, but unless NFL teams raise ticket prices, they will not see any bump in ticket revenue from season ticket holders in an expanded season. Any bump then will be from an increase in the number of tickets sold.

The NFL in recent years has enjoyed excellent attendance. Per ESPN's figures, total regular season attendance was 17,146,404, for a total of almost 67,500 per game. Per The Official NFL Record and Fact Book 2010, regular season paid attendance was actually 16,651,126, or an average of 65,043 per game. Preseason attendance, thanks largely to those season ticket holders, was also very good: 3,810,074 total, or an average of 59,186 per game once you subtract out the Hall of Fame game. For a 10 game home regular season slate, the average team thus drew 638,720 fans.

For simplicity's sake, I will assume that the average regular season attendance will also be the average regular season attendance for the 2 additional regular season games, and preseason average attendance will also remain the same. The new, expanded regular season slate sees the average team draw a total of 644,577 fans per game, a total of 5,857 additional fans. Using the Green Bay Packers as representative, which they almost certainly are not, they would make an additional $433,505 in ticket revenue from both home and road games from the expanded season. This is a revenue bump of .92%.

II. Television and Media
Ah, the single largest category of the Packers' income. 38.1% of their income from FYE 3/31/09 came in this category, and the broadcast networks should be falling all over themselves for the right to pay NFL teams more money for two additional regular season weeks, right? After all, 19 weeks instead of 17 weeks = 12% bump in revenue, right?

Well, let's not be too hasty. First, who does the NFL make money from? Well, beginning this year, DirecTV is paying $1 billion a year for the NFL. That's an easy 1.12 billion, an extra 117 million in revenue, right? No, almost certainly not. It's not clear how many subscribers there are with Sunday Ticket. Per this article from August 2009, there are about 2 million of us paying something like $300 a year for Sunday Ticket. That's $600 million in revenue, and DirecTV paid the NFL $700 million in 2009 and will be paying that $1 billion this year. Is DirecTV insane?

I guess it's possible, but almost certainly not. DirecTV's Sunday Ticket subscribers pay DirecTV not just that $300 for Sunday Ticket, but also an additional amount of money for regular monthly subscriptions. Some of that $1 billion reflects the weekly operating profit, such as it is, but some of it reflects brand value to DirecTV for the subscriber exclusivity. How much of the $1 billion goes to each figure? I'm really not sure, but I'd estimate at least half is the existence of the subscribers in the first place. The per-week revenue thus looks more like $30 million dollars, so a 2 week bump might move the contract from $1 billion to $1.06 billion. That's a nice extra chunk of change, but only half of the bump in the length of the regular season. That's not too bad, because the other contracts will pay us more, right?

This is, once again, likely overoptimistic. CBS, Fox, and NBC get the right not just to regular season games, but also to postseason games, including the Super Bowl on a three-year cycle. Figuring out how much revenue they get off those games is a difficult exercise, requiring a much more detailed knowledge of ad rates and revenue and ratings than I possess, so I'm going to do some extraordinarily rough approximation. For regular season games, I will ballpark it at 15 million viewers per game, based off this article and this one. For playoffs, I will estimate 25 million viewers for each wild card game, 30 million for each divisional round game, and 45 million for the conference championships, plus 90 million for the Super Bowl. Again, for simplicity's sake, I will assume each viewer is worth the same amount, which probably isn't true. I will also ignore preseason revenue, since it's almost certainly a minuscule part of these contracts.

ESPN is probably easiest. They're paying the NFL $1.1 billion a year, so they're closest to a 12% bump. This is almost certainly still overoptimistic; as with DirecTV, getting ESPN is optional, so they're almost certainly including some brand value in that huge amount. I will conservatively estimate this at maybe $100 million. That's $58.8 million per week, or an extra $117.6 million the NFL might be able to expect from two extra weeks of Monday Night Football.

For CBS and Fox, I'm not including any brand value in my calculation. This is almost certainly wrong in a way that overstates the potential increase in revenues. After all, brand value was why Fox paid the NFL so much money in the first place, since it induced the creation of new Fox affiliates. By now, though, both networks have affiliates all across the country and won't see that sort of big bump, so I'll ignore any value to other shows. Using those viewership numbers, each network draws roughly 550 million viewers a year. That assumes 26 regular season games, 1 wild card game, 2 divisional round games, 1 conference championship, and a Super Bowl every 3 years. With the expanded season, they'd each show 3 additional games (1 double-header, 1 single week), so they'd see an increase to 595 million viewers, or 8.2%. Per this article, Fox and CBS paid an aggregate of about $1.335 billion before signing extensions with increases roughly 4% in May 2009. Post-extension, that amount was $1.388 billion, so an 8.2% increase on that increases the amount to a hair over $1.5 billion.

With NBC, the math is similar to CBS and NBC. After the 2009 extension with a similar 4% increase, they paid roughly $624 million per year. Assuming the same 15 million per game, 25 million per wild card and 90 million per Super Bowl every 3 years, an expanded season increases NBC's total viewership from 335 million to 365 million, an average increase of about 9%. That's an increase of about $55 million in our hypothetical TV contract world.

Overall, adding up those television contracts, we have a total bump from $4.112 billion to $4.459 billion, or 8.4%, far short of the almost 12% bump needed to pay players the same amount per game.

III. Private Box Income
$12.8 million dollars or revenue, or a slightly over 5%. I don't think ticket revenue is included. For realism purposes, I'll assume a regular season game is three times as valuable as a preseason game. An increase from 8 regular season games to 9 thus increases the value of this category about 7.7%. I'm not very confident in that number, but that sounds reasonable, and I don't think it's completely insane.

IV. Licensing Income
I've re-described this as licensing revenue. I think that's where almost all of NFL Properties' income comes from, but (Other NFL income) and the good-size increase in this category of late leads me to believe NFL Network revenue is also included in this category. Estimating the potential increase in this category from an expanded season is difficult. My inclination is to think licensing revenue would expand very little, if at all, from an expanded season, but that NFL Network might provide more revenue, especially if it picks up another regular season game, which seems likely (though, again, there's a brand value issue there). I think a reasonable increase is no more than a 5% bump in this category from an expanded regular season.

V. Marketing/Pro Shop
This is another category where the potential increase is difficult to quantify. In a most optimistic world, I'd assume all of the revenue comes from gameday, and people at regular season games spend an above-average amount, say 50% more than people at preseason games. I doubt this is actually true, but I'm trying to weight this analysis in a way that mildly but reasonably in favor of increasing revenues. In that case, that'd be a 6.1% increase in this category. That's almost certainly much too high, but I'll stick with it.

VI. Other-Local Media, Concessions, and parking
Local media is very difficult to quantify; a true evaluation would require something at least as detailed as the TV contract analysis. It might reach the 12% regular season bump, but probably not. It actually might fall, since it includes the Packers' revenue from televising 4 preseason games. Concessions and parking will probably follow attendance, more or less. I'm tempted to use for this category the same .92% increase I used for attendance, but I will instead very roughly guesstimate it at 2% increase.

Conclusion

All of the above numbers should be taken with a MASSIVE grain of salt. All of them also, though, represent my best guess at a reasonable but optimistic estimate of how much additional revenue might be out there from expanding the NFL regular season from 16 to 18 games. Plugging those increases into the actual numbers from Green Bay's financial report gives an estimate total revenue amount of almost $262 million, an increase of 5.67%. On a per-game basis, the players aren't making the same amount, they're making over 6% LESS. Obviously, the owners can offset that by doing things like raising ticket prices, but I don't think they're too too interested in double-digit percentage increases in the current economic climate. The "enchanced" season doesn't look like a winner for the players.

What's really going on?
While in law school, I fell under the baleful influence of a professor who once said that his mantra was, "First, I figure out what's really going on. Then, I figure out what the law should be." Why is Roger Goodell advocating for the players to play less and make less money per-game? Doesn't he know that the NFL won't really make that much extra money from moving to an 18-game season? The question to that is almost certainly yes, so why does he do this?

First, I think he's right (shudder... I hate acknowledging that) that there really is a level of popular discontent over the 4-game preseason, especially from media people and season ticket holders who feel like they're getting screwed. These people, especially the latter, are probably wrong, but as I mentioned way up there, that's a subject for a different post. Proposing an expanded regular season allows Roger Rex to make nice with these people.

More importantly, though, it's a negotiating tactic. By this point, the owner's strategy is clear: they're going to approach the players with their dream offer. This is a revenue pool that's roughly 18% smaller than the current revenue pool, plus an expanded season. The expanded season will enhance the size of the revenue pool, so the players won't make 18% less but maybe 12% less. It's not being presented in quite this manner, but that's what's really going on. The NFLPA's current strategy is trying to present the expanded season and the size of the revenue pool as two separate issues, focusing on what seems like an essential fairness when it comes to playing 18 regular season games instead of 16. What I think they're trying not to do is to draw an explicit linkage between an expanded season and a decrease revenue amount. When they do that, the NFL will then be able to make a relatively persuasive argument that "Ok, we'll drop the 18-game season idea, and give you less money, and you agreed to that." That is what the NFLPA is trying to avoid.

Frankly, I don't think the NFL is, or at least should be, particularly serious about the 18-game season. If my numbers are close to right, it doesn't make anywhere near as much money as you'd expect from a basic 16 to 18 game comparison, and the players really don't like it. It is, instead, primarily a negotiating tactic and media ploy, and should and will be dropped when the labor negotiations get serious.

UPDATE (8/4/10 2031 CT): Thanks to Chris at Smart Football for linking to this. For those coming here directly, see this discussion of the article at Football Outsiders. One of the commenters there brings up a very good point, that I focused on revenue rather than profits. This is quite true, and it's a different calculus from that perspective. Focusing on profit, something like 58% of the $14 million in added revenue will go to player costs. The other question is how much non-player revenue costs increase. Since the NFL would be sticking with the 20-game season, I don't think non-player costs would go up very much if at all. In that case, at least $7 million of that $8 million might be straight profit for the NFL.

If so, then an 18-game season seems much more like a financial winner for NFL owners. If that is indeed the case, then it's possible the NFL might see the 18-game season as much more than the kind of negotiating tactic I thought it was. The problem remains, though, that you have to get the players to agree to it first. To use an example from the FO thread, it's like paying the independent contractor $20/hour to work from 9-5, then asking him to stay from 5 until 6 and paying him $10 for that added hour. 9-6 for $190 might make sense; $10 on top of $180 for that extra hour is a tougher sell.

UPDATE #2 (5/25/11 2246 CT): In January 2011, NFL outside counsel Bob Batterman at a press conference estimated the additional revenue from the move to an 18-game season at $500 million. The numbers I set forth in this post produced additional revenue of approximately $450 million. I don't absolutely trust Batterman's comment to be the absolute best estimate possible, but I don't think it's an indication I wasn't completely down the wrong path.

My thinking on the likelihood and desirability (from a financial perspective) of the 18-game season has changed over time, both before and since I wrote this post. As it currently stands, I believe it's likely to be part of the eventual settlement between the players and owners, but that's a subject for a longer post I have yet to write. I just want to note, though, that I don't necessarily still agree with the analysis in either the post or the earlier update.

Friday, July 23, 2010

Total Titans

New Total Titans post, this one with some thoughts on Chris Johnson's new deal, featuring some salary cap yap and thoughts on who has leverage in what situations.

Saturday, July 17, 2010

Total Titans

New post up at Total Titans, this one asking just how good Jacob Ford is.

Monday, July 12, 2010

Book Review: Bowled Over

Bowled Over: Big-Time College Football from the Sixties to the BCS Era is the third Michael Oriard book I've "reviewed" on here, after Brand NFL and The End of Autumn. Whereas The End of Autumn was his autobiography, Brand NFL and Bowled Over represent a sort of history of football since Oriard's playing days at Notre Dame in the late 1960's and the NFL in the early 1970's.

Bowled Over is basically two halves. The first half covers the turmoil of the late 1960's, which included both generational change and the rising number and importance of black players. This comes to a convenient narrative end with the introduction of the one-year renewable scholarship in 1973. A couple issues I had with this section. First, race is a tricky subject, and writing about times when you were young and at the forefront of a supposed social revolution (Oriard himself was fairly politically sensitive and participated in anti-war demonstrations while at ND), so it feels like he's exaggerating just how serious and how important the conflicts were.

Second, he emphasizes the change in power relationships with the introduction of the one-year scholarship. When he doesn't mention, though, is that the late 1960's were a pretty anomalous time in college football history. From 1950-65, college football had extremely limited substitutions, and teams essentially operated with a single platoon. Oriard mentions Bear Bryant's Junction Boys, but doesn't mention that Bryant really didn't need the 75 players he ran off, since the 35 that were left were more than he needed for his team, even taking into account injuries. Players who quit the team didn't necessarily have to give up their scholarship, but that's a problem fairly easily solved-don't actually give them the scholarship until they pass through some sort of initiation process. Plus, in the era, teams weren't subject to the 85-man scholarship limitations, and big schools like Alabama regularly had 150 or more players on scholarship at any given time. Also, before the late 1940's, scholarships tended to be informal in nature, the result of boosters paying students for phantom jobs, jobs they could quickly be axed from if they quit the football team. Really, football coaches have had the power for over 100 of the past 110 years of college football, and Oriard seems to place undue weight on that brief historical interlude where it was otherwise.

The second part of Bowled Over is a fairly conventional history of the last 35 or so years of college football history, focusing on the increasing influence of money. Oriard plumbs Dunnavant's Fifty-Year Seduction well, much more than I did in my brief review, and it provides some of his best material, while much of the rest seems to come from John Sayle Watterson's history of college football, which has long been on my to-read risk. Obviously, Oriard seems to decry the purity of this game, but goes farther than most "football people" in thinking seriously about whether or not college football can be saved. Ultimately, he seems to hope some other, outside force will essentially save college football from itself, since the money interests are so entwined with the game, plus CFB's history (in Oriard's view) has always been primarily about money. There's a way I think about this: Then a miracle occurs, and it feels much too much like wish-casting to me.

Ultimately, I found Bowled Over deeply disappointing. It's a well done, scholarly book, with the sort of footnotes and evidence of research you expect from somebody who's a tenured professor, but I deeply disagree with Oriard's viewpoint and analysis too much to whole-heartedly recommend it.

For more, see this interview with Oriard, this post on student demand for college sports, and, hey, what do you know, the Department of Justice is scrutinizing the one-year scholarship.

Sunday, July 11, 2010

Total Titans

New post up at Total Titans, this one on predicting who gets cut to make room for the unsigned draft picks. Alternatively, July NFL blogging can be boring, but it's time for me to come out of hibernation, so I write about what there is.

Saturday, July 10, 2010

Self-Publicity

I just wrote a new post at Total Titans on how much the defense was responsible for the 8-2 finish. That post was the first of several I'll be doing over there on the Titans' team chapter in Football Outsiders Almanac 2010, which was unleashed on the world Thursday. Go buy it from the FO store if you haven't already, dangit, it's the first book that lists my name among the authors.