How to Build a Team

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This is a post that I’ve been meaning to write for a while, but I’ve kept putting it off. In the wake of the Frank Clark trade I figure it’s time.

Trading valuable draft picks for a player and then signing them to a new, market rate contract is just about the worst thing a team can do. Sure, Clark will make the team better in 2019, but in the long term it will only hurt us.

To understand why let’s simplify things. Instead of dealing with the NFL with it’s 53-man rosters and positional values and scheme fits, we’re going to talk about an imaginary professional tennis doubles league.

Our team, the Kansas City Tennis Club, is a new expansion team looking to fill it’s 2 roster spots from the pool of free agents.

This is an easy choice, Bob Smith and Jim Brown are the two best players, so we grab them.


But of course every professional sports league needs to pay its players, so we need to take salary into consideration.

But as the owner of the Kansas City Tennis Club, I can easily afford the $70 for those two guys, so our roster looks the same.

Now let’s say the league doesn’t like rich owners like myself being able to outspend other teams, so they institute a salary cap of $50. So while Bob Smith is a good player, we can’t afford both him and Jim Brown so he has to go.

Now let’s introduce draft picks. The key here is that, just like in the NFL, draft picks are on very cheap contracts. They may be good or bad, but because of how cheap they are you can surround them with expensive players. If they turn out to be good you’ll have an unbeatable team.

Notice that our draft pick doesn’t even have to be all that good for the team overall to be better. Even with a skill level of 25 would make the team better than our one built purely from free agents.

Let’s go back to our salary cap team. Now our GM sees a player on the Seattle Tennis Club team called Clark Frank. This guy is really good, with a skill level of 80, and at $40 he has the price tag to match. So we give Seattle our draft pick to get him on our team.

Unfortunately since Clark Frank took up so much of our salary cap we had to go cheap for the rest of our team.

But notice something interesting. Even though we gave up our draft pick, our overall team skill isn’t any better! Because we had to downgrade the rest of the roster to make room for our new star, the team overall didn’t improve.

This is caused by the player’s market being efficient. In economic terms “efficient” means that everybody has the same information, so the price you pay reflects the quality of player you’re getting.

In short, every player has the same exact value on the open market.

As you can see when we played around with building the team, if you only have market rate players you’re not going to be able to build a particularly good team. Even if they’re elite players, if you have to pay them elite money it still doesn’t help you.

This means trading for elite players makes no sense if you have to pay them market rate. I can get market rate players in free agency without having to give up picks, so why would I trade for them.

The NFL is a bit more complicated, but the logic still applies. Clark’s contract extension will mostly kick in in 2020, but why not spend that $20 million on free agents without giving up a draft pick? Unless the Chiefs have identified something that no other team has noticed, those free agents would have contributed just as much to our win-loss record as Clark.


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TyroneStramtoReidBDChiefsFanAnthony StrattonIcemanx44 Recent comment authors
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Tyrone
Tyrone

I like this because it confirms the opinion I already had.

StramtoReid
StramtoReid

All I know is, if we picked up a starting CB in the draft, we don’t have to sign a free agent CB for 10 million next year, and we lose the salary of a second round draft pick, because we traded for Clark.

If my math is right. Clark makes 21 million a year, if we drafted a cb, it would cost us 2 million a year, a loss of 8 million a year, the loss of a second round pick 1 million.

We cut Houstom, which is 5 million a year dead money.

It is costing us, 35 million a year for Clark give or take.

BDChiefsFan
BDChiefsFan

interesting article.

Icemanx44
Icemanx44

I guess it ultimately comes down to whether or not you believe the value was there. If I have $10 for food until Friday and it is Tuesday, I probably won’t spend it on eating out for lunch that day, but if I have $20 on Thursday, knowing more money is coming tomorrow I would be more likely to spend a little on eating out for lunch. Due to the structure of the contract if we don’t sign any one else to a large contract this year (CJ95 being the only true candidate for that at the moment) we will role salary from this year into next year and pay the vast majority of Clark’s paycheck for next year using said money. This will negate the idea of having to have lesser talent surrounding Clark, also we have a pretty young team, and not too many expensive players at the moment. True when CJ, PM and to a lesser extent KF get paid it will lower our flexibility but luckily we get to spend more money each year so it shouldn’t be to bad.

Anthony Stratton

Welcome to AG!

BleedingRedAndGold

Good piece, Tony, as you break down the business POV quite well. Thing is, business values aren’t the only ones that apply to NFL teams. Military analogies tend to be overdone with the NFL, but there’s an element of truth to them that still applies, because when the dust settles, what matters is winning, not economics. Militarily speaking, the most expensive thing is having the second-best army in a war. That isn’t to say that straight-up spending wins wars, of course. WWII Germany would have been a lot harder to defeat if they had invested more into their medium tanks instead of pursuing bigger and bigger monstrosities of inefficiency.

And KCSD has a point about scarcity. While there’s nothing inherently wrong with your model, it has limits. By the logic of your model, KC shouldn’t have traded for Alex Smith, but if not him, who was on the open market who could have produced the same or better results? When Reid got here, he needed a QB who could handle the complexity of his system in short order so he could get it installed. Whatever else has been said about AS11, he had the brainpower to do just that, and the tandem logged an impressive run of winning seasons. Cont’d.

BleedingRedAndGold

Now obviously the duo coudn’t get as far as we’d have liked toward the biggest prize, but that’s a different equation. With that, AS11 moves from scarce peak performer to Mr. Efficiency, and as we have seen, efficiency only takes you so far. At some point you have to have peak performers, and peak performers seldom come cheap. And in draft terms, Mahomes didn’t come cheap, since he cost the team 2 first-round picks. That’s expensive, but the results speak for themselves. 2:15PM was also rather expensive in terms of time spent waiting for a player like him to come along, but if we hadn’t waited, we wouldn’t have gotten him.

As it happens, I prefer the way things worked out at QB to any plausible scenarios that could be generated with minimized hindsight.

Team Player
Team Player

Great analysis but there are multiple variables. Scarcity for one. Laffer curves are a real thing.

But it’s a great first step towards science Saturday, Salary cap edition