Player performance curves and value for money

As mentioned in this space recently, I am the proud owner of a shiny new database full of player performance and salary data from 2003 to 2009. I will be trying to extend it in both directions as I have time. For now, however, the analysis will be applicable to that period’s decisions. Once 2010-2012 are added in it might provide a nice contrast in allocation and relative performance under the conditions of the new CBA.

The jumping off point for this data set is getting a good baseline on the efficiency of spending in the NFL. How much does it cost to squeeze one unit of Approximate Value[1] out of a given position? Approximate Value is a stat from Pro-Football-Reference.com developed by Doug Drinen that works by allocating out a team’s offensive and defensive performance to different positions based on various assumptions. The summaries Doug has produced introducing the stat are extremely helpful, but you won’t be at too much of a disadvantage if you just read on without understanding exactly how AV works. As he says in the introduction they are “simple, intuitive and approximate."

Methodology
  
In the post I wrote about spending on running backs (see here for more) I noted that prior to the current, 2011, collective bargaining agreement, teams frequently failed to spend up to the level allowed under the salary cap. To correct for this, I represented allocation decisions in terms of percentage of team spending. This way you have a team like the 2005 Seattle Seahawks who spent $67 million against the cap give or take a few while they were permitted to get up to $85.5 million. The $0.75 million cap number for Isaiah Kacyvenski – a fine linebacker and fellow 2011 Harvard Business School grad – would be 0.9% of the salary cap but the 1.1% of team spending is a better representation of the allocation decision. The assumption here is that teams were working under a budget set externally (owner, rather than salary cap) and that they had to allocate those scarce dollars according to that budget. If you still have a problem with this approach please do check out that article I referenced earlier.