The American Sports Landscape
On May 14th, 2019, fans of the New York Knicks, the basketball franchise in the global financial center of the world, will be packed around their televisions. No, the Knicks won’t be playing in the second round of the NBA playoffs, which will be occurring at this time – these fans will be watching the NBA Draft lottery, which will determine the order of selection for the 2019 NBA Draft.
The concept of rewarding sports teams that fail is actually uniquely American. In the European soccer model, the worst performing teams in a league in any given season are sent down to a lower league. An example of this phenomenon is the English Premier League, where there are twenty teams in the league, and three teams sent down to the Championship division. There is a $200M per team difference between the revenues in the Premier League and the Championship, a massive penalty for a failing team.
Obviously in the US, all of the major four sports leagues reward failure in the form of the draft system. The draft system forces players who want to enter the sport to join a certain team that selects them in this draft, usually selecting these young players out of the college system. Generally, the worst teams in the league have the first picks in the draft, to differing levels of extent. The NBA has the most even odds of the first selection of players between bad teams and good teams, with the worst team in the league only having a 14% chance of receiving the 1st pick in the draft, and a 48% chance of picking as far back as 5th. The NHL’s worst team has a 18.5% chance of receiving the 1st pick, and can have their selection as low as 4th, with a 50% chance of landing at #4.
The NHL and the NBA, the two American sports that have a lower percentage of American-only fans than the other two (which have both been considered America’s favorite sport at some point in time), have some sort of a lottery system that limits, to some extent, the benefits of losing. The MLB and the NFL have no such system. The worst team in the MLB and the NFL receive the first picks in their respective drafts, no questions asked.
In three of these sports, there is a history of teams strategically using this system to succeed by losing. In the NBA, the “Process” era Philadelphia 76ers, from 2013-2017 most famously, and most dramatically, leveraged losing, but many teams in the history of the NBA, including the Oklahoma City Thunder, used multiple seasons of designed losing as a team building strategy. This tactic, “tanking”, has come to be generally known as something that is tried and true (entire websites are devoted to tracking the best tankers), to the point that the NBA league office changed the draft lottery odds to lower the chances of the worst team winning the first pick.
In the NHL, the year before the 2005 lockout, there was a flurry of attempts to fail in order to have a chance to get the prized prospect of the 2004 NHL Draft, Alexander Ovechkin. Teams that had been bad that year received an additional benefit when the NHL had no season in 2005, and the Pittsburgh Penguins were able to win the lottery after failing to make the playoffs the previous three years to select Sidney Crosby. The Penguins and Washington Capitals used terrible performance to each get two future Hall of Fame caliber players in Alexander Ovechkin and Nicklas Backstrom (Capitals) and Evgeni Malkin and Sidney Crosby (Penguins). These four players formed the basis of the biggest rivalry in the sport for the better part of the last decade of hockey.
Even Major League Baseball has come around to understand the value of losing in the current system. In 2013 the Los Angeles Dodgers had the largest player payroll in the MLB, paying over $200 million to their players for that season. The 2013 Houston Astros had $11 Million in payroll that season. The Astros made a conscious decision that they were going to lose over the 2011-2013 seasons to build their prospect base and reap the rewards of the top picks in the MLB draft. What was the result of those three years? The Astros won the World Series in 2017, have won over 100 games in back to back years, and have a roster loaded with talent.
Three of the four sports leagues understand and are aware of the benefits of losing in the current American draft system, but one league stands alone in ignorance: the NFL. No NFL team has gone through any sort of process to generate multiple years of high, valuable, draft picks, despite there being seemingly more of a clear path in this sport than any other major sport – the NFL not only has the draft system like the other four major sports, but also has a salary quirk that allows the path of losing on purpose to be even more valuable.
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The National Football League
This understanding of the draft system and its inherent benefits stops at the NFL. Never has a team implemented a strategy that requires any sort of prolonged losing to obtain draft capital. Additionally, the NFL has added benefits that would help if teams were to think long term. In the NFL, each team has a hard salary cap that they can not go over, which for the 2019 season will be at $188 million. In the NFL’s collective bargaining agreement, there is a stipulation that allows for unused salary cap from the previous year to be rolled over to the next year. So for any given year, a team can have more than the listed $188 million as the salary cap, and could gain a massive competitive advantage for the following year if they were to choose to withhold the gratification of signing free agents to receive a greater benefit in future years. So why is this team building tactic essentially unused? Why is there such a rush to hastily improve bad teams and no attempt at a system that would create some sort of long term success, or at least increase the likelihood of long term success?
The NFL is a distinctly American institution like few entertainment products in the world. The sport is known internationally as American Football, and while most sports with revenue numbers the size of the NFL’s have fairly large amounts of support from different pockets of the globe, the NFL doesn’t. It’s a business that makes over $8 billion in revenue annually, off of just 21 weeks a year in essentially just one country, the United States. The NFL is arguably the most American institution in the world, so it is fitting that the league suffers from one of the most American sins – a need for instant gratification.
As technology gets better and better, one of its biggest features is cutting down on “wasted” time. Netflix cuts out the waiting every week for a new episode of a TV series by releasing entire season on their service to binge. Amazon has made two-day shipping of almost everything in the world the expectation for many. Google and Wikipedia have made looking information up in an encyclopedia a twenty-second process instead of a multi minute process. This has largely created a younger generation of Americans who is used to the benefits of technology in their everyday life; who have not lived without the internet for any of their lives. It has also created an older generation who scolds the younger generation for a lack of patience and hard work; a lack of being able to wait for success to come over time. This older generation consistently acts as if the younger generation is the driving force of the immediate gratification problem that plagues Americans. This is, of course, fallacious, but one way that is very useful to show just how faulty this concept is is by using the prism of the most American sport, American Football. From the management, to the fan base, and even the players, the consistent thread is a need to get what they want right now, regardless of the potential negative impact that would come in the future.
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The Oakland Raiders, from 2017-19, had the most conducive possible environment to attempt to lose and build up draft capital. The Raiders had just hired Jon Gruden to an unheard-of 10 year, $100 million contract, which locks in Gruden as the head of the Raiders until 2028. If there ever were a time to make long term decisions, it is when the organization is paying a coach for 10 years.
The Raiders, pre-2017, had a decision to make on their stadium for the future. The state of California had made it well known that the act of using tax revenue to build stadiums was a thing of the past, and it would not be a path for the Raiders going forward. However, the San Francisco 49ers, who had played in Candlestick Park in the city limits of San Francisco, had just moved to Levi Stadium, 40 miles outside of San Francisco. Oakland, which had previously seen times of economic hardship, was having a boom in real estate valuations and overall economic activity. With the rise of the Golden State Warriors, there was proof that the massive new tech money was willing to come into Oakland for sporting events and were willing to spend large amounts of money on sports (something that people weren’t sure would be the case, and historically for Oakland, money didn’t flow into the city). But as with Brooklyn, NY, the times have changed in Oakland, and the housing market has changed the city, setting it on the path for a steady rise. Not only would an Oakland football team be 30 miles closer to San Francisco than the 49ers, but they would be laying roots in an area that might soon be a shooting star.
So the Raiders were faced with a choice. Build the stadium with a standard loan and mortgage, the way that almost all buildings are built, and have the chance to become the team that is closest and most tightly tied to both Oakland and San Francisco, the tech capital of the world, or go take the taxpayer funding of the city of Las Vegas, a tourist city where opposing fans will habitually fill the stadium. An American Football team was faced with a choice of looking at the long term or looking at the short term. Of course, the Raiders chose immediate gratification. So the team decided to leave the area of the country that is producing as much or more young wealth than anywhere in the United States, and instead headed to the land of slot machines and Michael Jackson Cirque Du Soleil shows. Immediate Gratification won.
The Raiders had a new problem. They were approved to move to Las Vegas in March of 2017, but couldn’t move until a stadium was finished, which wouldn’t be until 2020. So the Raiders were stuck, with fans from Oakland that knew the team was ditching them for taxpayer money, a stadium that was falling apart at the seams (with a baseball infield on it), and needing to think about the team that they would be bringing to Las Vegas in 2020.
As noted before, the NFL has a couple of massive incentives in place for teams that would want to be good, or splashy for lack of a better term, by a certain future date. First, there is no lottery and the worst team simply is awarded the first pick. The 2020 NFL draft will likely have Alabama star QB Tua Tagovailoa in it, who was already a household name by his sophomore year in college, and would be a perfect building block for a team that would want to make a splash moving to a new city. Additionally, the Raiders would be able to enter the offseason before the new stadium with a massive amount of cap space, and they would be able to make a serious push in free agency to drive up interest by rolling over unused cap space from the 2019 season. Adding the number one pick and having over $100 million in salary cap space is a marketer’s wet dream, and unlike in other leagues, where there is a factor of draft luck involved, it was something that was not only possible, but easily attainable had the Raiders put their minds to it.
In the 2018 season, on cue, it looked like the Raiders might have become the first team in the NFL to embrace a long term rebuild. They moved their young but struggling wide receiver Amari Cooper to the Cowboys for a first-round pick. Cooper was in the middle of the last year of his rookie contract, and was due a hefty raise in the offseason. The Raiders did extremely well to turn half a year of production into a first round pick: four years of a cost-controlled player. Cooper’s cap hit jumped from $6 million to $13 million for 2019, is a free agent after this year, and will have to be paid a market rate in 2020. The Cowboys’ Stephen Jones, CEO and son of Jerry Jones (the owner), in a statement emblematic of the thinking of the NFL and America writ large, said regarding the draft pick that was traded away: “When the Raiders pick with our pick, we’ll be watching Amari [Cooper] highlight tape.” Disregarding the future four years of your franchise for the immediate gratification of having 8 games of a player is really not too dissimilar to disregarding the heightened chance of heart failure or diabetes after a week long bender of Big Macs and McFlurries, as is the American way.
“When the Raiders pick with our pick, we’ll be watching Amari [Cooper] highlight tape.”
The Raiders also traded away their star linebacker, Khalil Mack, who was holding out for a market rate All-Pro edge rusher deal. The Raiders got two first round picks, a third round pick, and sixth round pick in exchange for Mack, a second round pick, and a conditional fifth round pick. Mack was then made the highest paid defensive player in NFL history, with a six year, $141 million contract. This type of trade is the sort of savvy move that does not exist in the NFL for the most part, and even NFL front offices thought the Bears won the trade for the star player. When the MIT Sloan Sports Analytics conference awarded the Raiders the best transaction of the year for the move, the Raiders thought that the famous sports conference was pulling a prank on them. According to Daryl Morey, the Houston Rockets general manager and the founder of the MIT Sloan Sports Analytics conference, “[Team president] Marc [Badain] thought I was making fun of him… I had to tell him several times that I wasn’t kidding. I guess they took a lot of heat for that.” Even when an NFL team makes a couple of good moves in a row, you can’t even know if the team is doing it with a conscious plan in mind or not.
Unsurprisingly, the Raiders upper management thought that these two moves that were building for the future, and not something that would be seen immediately on the field, were not creating a baseline for future success, but a failure that needed to be punished. On December 10th, they fired their general manager, Reggie McKenzie. The Raiders proceeded to go from seemingly rebuilding to going back to the traditional way that teams are built, to win right this minute however many games possible, repercussions be damned. The Raiders used a third and fifth round pick to acquire Antonio Brown, and proceeded to fully guaranteed $50 million over three years to the wide receiver who will be 31 years old when the season starts. Next, the Raiders signed Trent Brown to a four year, $66 million contract, which makes him the highest paid offensive lineman in the history of the NFL. Two moves that are extremely focused towards wins on the field for the next year of football, for a city that will not be their home long term, and for a fanbase that had the fourth lowest attendance in the league the previous year. Now, the Raiders will enter Las Vegas most likely with a middling pick and Antonio Brown off of what could easily be his worst year of team success, which could bring some serious chemistry problems. They will not have a large amount of cap space either, with the Antonio Brown, Trent Brown, and Derek Carr contracts on the books. They will likely go as a mediocre team into a city that has more options for entertainment than any other city in the United States.
Visakan Veerasamy for Referral Candy had a great quote: “The older I get the more obvious it becomes that you can win at lots of things just by deciding that you’re going to stick with it longer than everybody else. Have long believed this to be true, but now I think I can start to say with conviction that I *know* it to be true.” A team that follows the same gameplan year after year to win now will eventually win now at a level that the front office finds agreeable at some point, even though the other teams in the league are attempting to do the same thing. The Process-era 76ers, more than anything else, were extremely consistent in their plan and their process. The four years of the process was not all successes – somewhat far from it. The team was also pretty unlucky, getting the #1 pick only once. They missed on two top six selections fairly badly in Jahlil Okafor and Nerlens Noel. The team perhaps sold low on some players, such as Thaddeus Young (who has been a consistently productive player since his trade from the Sixers) for a relatively low draft pick. But the team continued on one plan, with vigor, and woke up with the same thought process every morning as they had the night before, over and over and over again. This is not what the Raiders did, nor what most any NFL team that shows even signs of rebuilding does. At the first sign of excess losses, they cowardly go back to win now mode.
This is, of course, not just a Raiders problem, but a problem for the entire league. The New York Giants passed on developing a quarterback in the 2018 draft, Sam Darnold, to instead choose Saquon Barkley and kept Eli Manning (at a high price) in order to win for that season. The team went 6-10 and decided to ship out superstar wideout Odell Beckham Jr. for draft picks less than 9 months after that draft. The city-sharing Jets finished the 2018 season 4-12 with rookie QB Sam Darnold, and not a ton of talent on the roster. They were in a position to go for a year or two more of a rebuild, and use the cap carryover system to spend huge in Darnold’s third or fourth season, while he is still under a cheap contract but with more development from the other players around him. Instead, the team decided to give the largest contract ever for a middle linebacker (CJ Mosley) and give the most guaranteed money to a running back ever (Le’Veon Bell) because being able to win a couple more games in the 2019 season is more important to the team than what the franchise might look like in 2021. Washington lost their QB Alex Smith last year to a compound fracture in his leg, the same injury that ended the career of their former QB Joe Theismann, but will have Smith’s contract on the books for the 2019 year, which makes it extremely difficult to win this upcoming year. Instead of taking the cards the team was dealt and attempting to lose to get Tua, someone the team could build around in 2020 and later, Washington traded for Case Keenum, a journeyman QB who most likely won’t win the team a Super Bowl, but also probably won’t be bad enough that the team would be the worst in the league.
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When the New York Jets signed Le’Veon Bell this offseason, the fanbase was ecstatic. They didn’t care about what Le’Veon would look like three years from now when he is a 29 year old running back, in a league that devours running backs and spits them out broken and mangled. They didn’t care that CJ Mosley and Bell would both be aging and expensive when QB Sam Darnold would be starting his second contract, which is likely to be a large extension and hypothetically when Darnold would be at his best. What they cared about is that the Jets would win more games in 2019, and even better, the Jets would likely win more games than the Giants. The optics of the situation were the the Jets had just gotten a superstar (never mind that they had paid market value for Bell, and that the Steelers’ running game without Bell did not seem to be much worse), and the Giants had lost a superstar (never mind that the Giants got compensation for Beckham via a first round pick, third round pick, and young cost controlled player), and it was as simple as that.
On top of immediate gratification, the expectations for that gratification in a given season is often completely outsized. The Cleveland Browns, an expansion team in 1999 after the the previous Cleveland team left to become the Baltimore Ravens in 1996, have been one of, if not the worst, franchises in any American sport. In the twenty years since 1999, they have a grand total of one playoff appearance, and only two seasons where they did not have a losing record. The team is 95-224 all time, good for a winning percentage below 30%, far and away the worst of any NFL team in that time period. The team has never won a playoff game, with that one appearance being a first round loss to their division rival, the Pittsburgh Steelers. SB Nation YouTube extraordinaire, Jon Bois, put together a video titled “The Browns Live In Hell”, to explain just how godforsaken this franchise is. Last year, they had their third best season in the history of the franchise, finishing with seven wins, eight losses, and one tie. Instead of simply being extremely happy with such an outlier season for the team, the fanbase instead has set large expectations for the 2019 season, with many fans thinking the Browns can win the whole thing, the Super Bowl. Deadspin interviewed fans after the acquisition of WR Odell Beckham Jr, and the fanbase is filled with Super Bowl visions. The local radio hosts are joining in on these expectations, as Tony Grossi of Cleveland’s ESPN 850 radio station suggested that “Odell Beckham Jr. may be the final piece to the Browns’ Super Bowl puzzle”. A team that had a combined one win in both the 2016 and 2017 seasons, now just two years later, has a fanbase that has some level of expectation of a Super Bowl championship. It is, of course, patently absurd, and yet completely unsurprising for NFL fans.
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At the top, top, levels, American Football players are extremely well paid. Aaron Rodgers makes $33 million per year, and Drew Brees makes $25 million. However, on the whole, the NFL median income is lower than most think, coming in at $860,000. The average career length (median data not available for career length) for a player is 3.3 years. So roughly, for a large percentage of the NFL player population, earnings are around $3 million before they are age 26, and then are unable to perform in American Football again. This, of course, is the lucky few who are even able to play the sport at the highest professional level, leaving out players who were lucky enough to play in the college system but weren’t good enough to play professionally, or the players who played in high school but couldn’t play in college. A massive funnel of young people all hoping to find one of the few jobs in the world that will pay someone under 26 over $800,000 a year.
At what cost? In 2017, Dr. Ann McKee a neuropathologist at Boston University, published a study of 202 deceased football players’ brains. Of the 111 brains that were donated to the study from NFL players, 110 had the brain condition chronic traumatic encephalopathy, otherwise known as CTE. Some symptoms of this condition are behavioral problems, mood problems, thinking problems, and an increased risk of dementia. CTE is caused by continued head trauma, something that occurs incredibly frequently in American Football. In the Boston University study, of the other 92 brains that had were examined from players who didn’t make the NFL (college players, high school players or semi-pro players), 72% of the brains also had CTE. As Kevin Guskiewicz, the research director of the Center for the Study of Retired Athletes, at the University of North Carolina puts it, “These guys who are 50 and 60 years old tell me that when they were playing they were only concerned about next week, not 10 or 20 or 30 years down the road,” he said. “They were always thinking about the next game.” Of course they were.
“When they were playing they were only concerned about next week, not 10 or 20 or 30 years down the road… They were always thinking about the next game.”
The harsh physical reality of the coming years of the players puts this entire system in context. Why would these people want to think about the future? Why would they want to think about anything past the right now? Should the players be looking forward to the dementia coming later in their lives? Should the fans be looking forward to another story like Junior Seau’s, the fan favorite linebacker who committed suicide and purposely shot himself in his chest so his brain could be studied? Should the owners be looking forward to yet another lawsuit over collusion or hiding the studies that showed the inherent danger of the NFL? Should the Americans be looking forward to rising oceans, or the next mass school shooting? No. Why think about the negative future when you can just live in the here and now? In the here and now, one can construct a world of their own: a world where the Browns will win the next Super Bowl, a world where the Jets will be better than the Giants, a world where you can be the 24 year old that gets a $600,000 paycheck, a world where the United States is the greatest country in the world.
Every now and then, the world gets a view of the grand point of American Football, like on February 2, 2019. Super Bowl 53 was a terrible on the field game, finishing at 13-3 and a Patriots win. The Halftime Show was largely panned, a performance by Maroon 5. Yet, 98.2 million people watched. 98.2 million Americans. 98.2 million, driven by immediate gratification. Five million dollars per thirty seconds of advertising, and the companies had 98.2 million people who were ready to make an impulse purchase to feed their immediate gratification. And there, of course, is the entire point.
by RJ Garcia, Northwestern University