A Mental Model For Valuing Players In Free Agency

by Max Mulitz

Adam Harstad has a fantastic piece explaining that players do not  gradually decline as they age, they continue performing at more or less their average level of output until they hit a wall. This probably isn’t precisely true. For instance we know speed declines as players age, but they also improve by gaining experience and technical skill. Larry Fitzgerald is an example of a player whose style of play has changed as he’s gotten older and lost some of his speed, but who has maintained a very high level of production. Still, given that our model of player aging should be some balance of year to year decline and risk of falling off a cliff, Adam’s data is a strong case that the risk of “death” has a far larger impact.

When teams consider how to structure a players’ contract, they must consider the possibility the player maintains his approximate level of production through the life of the contract as well as the possibility the player stops producing after each year of the contract. Every year of a players’ career carries some risk that the player will, either due to injury, loss of athleticism, or off field issues, no longer be a viable NFL player. A teams’ risk in each year is simply how costly it would be to the franchise in terms of percentage of the salary cap paid over the life of the contract if the player stopped being productive in that year. Good contracts (for the franchise) balance saving salary cap space with protection in the event of a players’ drop off. There is some utility in estimating a players’ risk, but becoming overconfident in a specific individuals’ durability creates fragility.

This mental model is limited to established starters going on their 2nd or 3rd contract. Players who have not yet been given the opportunity to play significant snaps do not have an established baseline of production and are not likely to get relatively large guaranteed contracts.

 

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