Saturday, December 28, 2013

High Variance Strategy in NFL Coaching - Maximizing the Kick Return Game

Last year I put together some analysis of NFL kick returns. I was really motivated by one big question – Why do teams return kicks?

Initially, I wondered if returning kicks was even the optimal decision for teams trying to win football games. I wondered if the risks of turnovers and poor field position meant teams really should prefer a touchback to bringing the ball out of the end zone.

As a brief review, that’s not the case. Returning kicks is, on average, better for scoring points than taking a knee in the end zone as the returns leave your team with better field position. If you look at it in terms of expected points generated on kick returns vs. generated on touchbacks – the distinction is clear: (Note: this analysis relies on the concept of expected points based on field position – which I’ll assume readers have already seen and grasped)

This data comes from the first 16 weeks of this NFL season, over 2400 kicks. It’s also consistent with last year’s data.

So returning kicks is good, but think about why it’s a good idea. Although it presents better average field position, the average return nets only about four yards of position (and only two yards if the ball is brought out of the end zone relative to a risk-free touchback).

Linking back to material my brother has posted – the upside is directly tied to variance. Returning kicks is much more of a high-variance strategy.

Below – is an illustration of all returned kicks through Week 16 this year. The histogram shows the distribution of expected points.

You see the giant spike between 0.3-.04 which equates to a return between the 18 and 22 yard lines, that’s the most typical result (remember a touchback is worth 0.34 expected points). But there’s also an extremely long tail of positive performance, and these outliers can be worth a lot more (even a touchdown). Those outliers are what make kick returns worth the risks (injury, turnover), which is exactly what we mean when we talk about high-variance strategies.

A touchback has zero variance. That result is predictable and constant. But a return, that could be a whole bunch of possibilities.

OK – so let’s take the idea that returning kicks instead of taking touchbacks is a high-variance strategy as a hypothesis. Now, if that’s true, we would expect to see a couple different trends in the data. Generally, we would expect less talented teams to return kicks MORE often than their better opponents. Weaker teams should be pursuing higher variance plays in an attempt to pick up ground on those other (stronger) squads. In an example – you’d expect the Jaguars to try everything to beat the Broncos because Denver is extremely talented and playing a conventional game will leave the Jaguars at a big disadvantage. That could mean any number of things, more shots downfield, 4th down conversion attempts, surprise onside kicks, and we could expect – more kick returns.

So…is that something we actually observe in the data? Are weaker teams pursuing higher variance strategies in the form of more frequent kicks?

To test this, I went back and looked at my favorite kickoff metric – percentage of touchback eligible kicks returned. This counts the number of kicks that were returned out of the end zone as a proportion of the total number of kicks fielded in the end zone. Obviously – teams will return all kicks fielded short of the end zone, so we need to exclude these. The real decision point is whether or not teams bring balls out of the end zone – this is our true high variance strategic choice.

The data set it built off of play-by-play information, which is the best I can get. Unfortunately, there are a large number of touchback kicks where distance is not recorded and it isn’t specified whether the kick was fielded or kicked out of the end zone. After some initial eyeballing I’m confident these are kicks out the back of the end zone (Matt Prater of the Broncos had a lot of them as an example). So our set of kicks is a little smaller than you might expect. But there are still 950 kicks in our sample.

Then, I took all the NFL teams and split them into three performance tiers based on point differential. Teams with the highest point differential are members of the first tier, teams with the worst scoring differential are in the third tier. Below are the teams and their tier positions.

You can see the usual suspects in both the first and third tiers. And to me, this is where we’d expect to see the biggest change. These third tier teams – they have to do MORE to compete against first tier teams. Alternatively, first tier teams, one might argue, don’t need to take additional risk by sending their return man out of the end zone. If we look at touchback eligible kickoff return percentage across the different matchups – we can see if there’s any difference in the way teams behave. Do third tier teams return more kicks when they face off against first tier teams? Do first tier teams (who don’t need to pursue high-variance strategies) return fewer kicks?

Hmm…there’s almost no difference in return % whether the worst teams are facing other crappy teams or the best teams. That seems a little odd…as we had guessed the worse teams SHOULD be returning more kicks when they face better teams. This indicates that this doesn’t happen.

It’s also not a result of sample size, as most of these cells are large enough (80-120 observations).

As another check, I looked at touchback eligible return percentage relative to specific team talent (via point differential) on a team-by-team basis. I did this to see if there were any teams that really seemed to be demonstrating aggressive tactics at the individual level.

Again, this doesn’t appear to support our thinking that poor teams are pursuing higher variance strategies by returning more kicks. At best, it’s inconclusive. There are a couple teams, like the Vikings, who really push the envelope – but there’s not a major correlation between team talent and return percentage (correlation is roughly -0.15)

Strange, but maybe identifying high-variance strategies before the game starts and following them blindly isn’t really what coaches of less-talented teams spend time on. Is there another way we can test our hypothesis?

Another theory is that if teams aren’t determining to return more kicks as part of pre-game strategy, maybe it’s something they pursue once they fall behind on the scoreboard. This wouldn’t even have to be exclusive to poor performing teams – any team that’s fallen behind might be more likely to run back kicks to try and break a big play to help catch up. What if we examine touchback eligible return percentage by in-game score differential?

The chart below illustrates the return percentage across a set of different score bands, ranging from down by more than 14 points to ahead by more than 14 points.

Again – there doesn’t seem to be any real connection between the scoreboard and aggressive kick return tactics. A team down by more than two touchdowns is just as likely to return a kick out of the end zone as one who is tied. If a kick return out of the end zone is indeed an aggressive play with a higher reward – teams don’t appear to be pursuing it MORE when they need to make up ground or LESS when they have a large lead. (As an aside, I absolutely cannot explain why having a small lead seems connected to a dramatic drop off in returns. I’ll chalk that up to some data wonkiness unless someone has a great insight there.)

But the broader concern remains. Shouldn’t teams which are behind or less talented need to take more chances to win? Why aren’t they doing that and bringing kicks out of the end zone?

My initial guess, though I’d welcome other speculation, is that teams the organizational structure of coaching almost inhibits something like that from happening. This comes with the obvious caveat that I’ve never coached in the NFL (so sure, Bill Belichick or someone else can dismiss all this out of hand as mom’s basement musings – but screw them). But if you’re the special teams coach of an NFL team – your work includes a thorough evaluation of your special teams and your upcoming opponent. All that work and planning becomes a little less valuable if a head coach just says – ‘Hey, I think we should return any kick we get in the end zone’

If the special teams coach is to maintain any kind of control over what his squad does – a simplistic rule like ‘run them out when we’re behind’ may not be sophisticated enough to justify all that pre-work and planning.

But that’s just a thought, based on the idea that coaches know their teams and customize approaches based on their own teams’ skills and the matchup with the opponent. Of course, when you actually look at the data, teams don’t really appear to be all that successful in managing their return game. Below is an illustration of touchback eligible return percentage, but this time charted against the average return position (i.e., return ability).

While we’d expect to see some correlation here – to show that teams with good return games return more kicks and teams with poor return teams take more touchbacks – that’s only true to the degree of a 0.2 correlation.

Some teams seem to get it – the Bills are really bad in the return game, but they rarely return kicks out of the end zone (on a relative basis – still over 50%). At the other extreme are the Vikings. The have Cordarrelle Patterson and, as such, they return kicks out of the end zone over 95% of the time!!!

On the flip side, look at Washington and St. Louis, teams with mediocre return units that run kicks out of the end zone 90% of the time. The Chiefs and Ravens seem odd as well – teams with great performance who could stand to run some more back. Now, maybe the Redskins are pursuing a high variance strategy, and maybe the Chiefs a more conservative one, but the overall results remain inconclusive.

At the end of the day, I come back to the idea of coaches and control over their special teams. For any team to read any of this and think about employing a ‘high-variance’ strategy – it really requires an admission of the role of chance in the outcome of a football game. Running every kick out of the end zone is a strategy based on the concept of inherent variability in outcome. Some returns may get stuffed, and others may go for big returns, but you can’t be sure when one or the other will happen. That view, to me, is fundamentally opposite the idea that with the right scheme and flawless execution – you can create the optimal outcome.

One of those ways of thinking supports the coach as the ultimate authority, while the other incorporates more probabilistic thinking. That gap is why I think we haven’t seen any patterns to support our hypothesis, and no clear evidence of high-variance kick return strategy consistently employed in today’s game.

Monday, December 23, 2013

NFL Coaches on the Hot Seat - A final look at our model

There's only one week left in the NFL regular season, and while a good number of coaches are focused on getting their teams into the playoffs, there are another set of coaches who are left to sit and wonder whether or not they'll still have a job after the season is over.

Those are the coaches I focused on when developing the logistic regression model behind my NFL Coaches Hot Seat Index. And even though there's one week left of action (plus tonight's MNF game), I felt as though the results this week would really be enough to give us a final outlook on who might be staying and who might be going.

To refresh - a brief explanation on the model itself. I was always disappointed with the NFL coach hot seat rumor mill that would creep up over the second half of each NFL season. Not because I don't like speculation, but because it was never really based on anything concrete, anything objective. With that in mind, I gathered historical data on NFL coaching performance going back several decades, and ran some analysis to find statistically significant factors in when coaches get fired.

The two factors I found, and the ones that found their way into my predictive model, were point differential and win change from prior year.

I ran the first analysis after Week 7 of this season, when team's had enough action to give some initial impressions. But now, with most teams having played 15 of 16 games, it's safe to say we have a much clearer picture.

The chart below has our updated data. The model estimates the odds (out of 100%) that a coach will be fired, given his team point differential and expected win change. The win change number is still an estimate (as per Football Outsiders) given more games to play.

This chart is also a little different from the prior version, as I've included not just the Week 15 results, but also the Week 7 results. This will allow us to see which coaches really improved over the second half, and if any got noticeably worse.

Lastly, I included a 'Hot Seat Zone' rating, which is just a basic red-yellow-green color coding based on some admittedly arbitrary cutoffs. If you're a 'Green' rating, you have a less than 10% chance of being fired (some would argue none of these coaches would ever get fired, but it has happened - most recently with Lovie Smith of last years' Bears team. Smith's team recorded a point differential of about +100 and improved by 2 wins, but he was still let go.)

If you're in the 'Yellow' zone, your odds of being fired fall somewhere between 10% and 40%. Certainly not as safe as the Green Zone. Last year, three of 15 coaches in this zone got fired (that's 20% for those scoring at home. Chan Gailey, Pat Shurmur, and Norv Turner)

Last but not least, the 'Red' Zone - which is just about as hot as you can get. Last season, four of six coaches in this zone were canned (Romeo Crennel, Mike Mularkey, Andy Reid, and Ken Whisenhunt).

So where have our coaches shaken out this year?

You'll notice only five coaches fall in the 'Red' Zone this year, but with two exceptions. Gus Bradley is up there, but as noted in the table, he'll likely earn a pass as a first-year head coach. So he (and other new coaches) are excluded from our ratings. Were Gus in his second season, his odds of being fired would be a sweat-inducing 45%, although it's important to note that Gus and the Jags also improved his odds the most of any coach over the second half of the season from a 76% likelihood after Week 7.

You'll also notice that the 'Red' Zone has already seen its first victim, Texans' coach Gary Kubiak. Heart condition be damned, the Texans let Kubiak go earlier this year - when his odds of being fired were already over 50%. I left the stats as is, because it didn't make sense to keep predicting an event that's already come and gone.

Besides Kubiak - who has the most reason for concern. Mike Shanahan of the Redskins, Mike Smith of the Falcons, and Leslie Frazier of the Vikings. These names aren't all that surprising, although other coaches like Tom Coughlin and Greg Schiano may have climbed their way out of danger, these other coaches continued to see poor performance over the last 8 weeks.

Now remember, this is a projection of what might happen to these coaches after the season, based only on historical data. This doesn't include the fact that Mike Smith got a vote of confidence from his owner, or that everyone in Detroit might be sick of Jim Schwartz.

But by and large, these numbers should give us a pretty good indicator. And as an Eagles fan, it's nice to see Chip Kelly showing a big improvement over the second half. After last night's Bears game, I'd doubt you'd find any Philadelphian would would put his odds over 7%, most would tell me I'm nuts. But then, if the Eagles lose in Dallas next week, I'm sure I'll hear from folks who'd want it at 100%.

Saturday, December 21, 2013

Marketing Alcohol and Spirits - Commercial Choices

Granted, I don't watch a lot of commercials anymore. Not since I started watching everything on DVR or on-demand. But even with a dramatic reduction in commercial viewing, that doesn't mean I'm not aware of developing trends.

I started noticing alcohol commercials. Not beer commercials, which are a distinctly different genre, but commercials for hard alcohol. I started noticing them because they all seemed to be the exact same, with slight tweaks.

Doing some YouTube research quickly confirmed the trend and the dramatic shift in marketing tone/tactics for certain hard spirits.

As a point of reference. I've included a couple older commercials below. The first, a Jack Daniels' spot from 1990

Seems like a standard commercial. Emphasizing the history, the quality of production - extolling the virtues of the beverage.

Now, another one, different in tone, from Bacardi (from some point in the 90's)

This one is all about partying and having a good time. Again, seemingly pretty typical. What you'd expect.

But when you consider commercials for the same brands now - there's a clearly different tone and way of messaging.

This is a commercial for Bacardi now.

Yeah - definitely some differences in tone right?

When I've been seeing liquor commercials - there are a couple clear things I've noticed:

- Oriented around a single dominant male character
- Dark lighting
- The character is a man of 'great experience' - by this I mean it's clearly established that he knows what he's doing without specific exposition to tell us that. To borrow a term from my book on the history of action movies, this is the 'man who knows indians' from old Westerns.

It's interesting that the commercials do this last bit in one of two ways. Either by leveraging a celebrity frontman with an established track record (see the above example with Javier Bardem), or a fictional character with some mystique.

Here are several more commercials for hard alcohol that have been on recently. See if you agree on the trend:

Here's one for 1800 Tequila:

And now Jack Daniels:

Moving on to Jose Cuervo:

And Chivas Regal:

This one, for Jameson, is a bit more story to it, but similar

I left out some others (notably the Captain Morgan series, in part because they're so long), but all of these have a very specific pattern.

They all focus on one main individual, trading on their prior experience. In some cases, Ray Liotta or Kiefer Sutherland, these are clearer histories. The others are a bit more obscure, but both the smoke monster from Lost (in the Jack Daniels ad) and Tywin Lannister (Chivas) have a specific track record of bad-assery. This is why they were chosen.

All these men have killed people (in Sutherland's case, like a million different terrorists).

But it's clear in the messaging of all these commercials. To be a badass - drink this drink. The commercials have moved so far away from describing the product that it's pretty clear it's all about the name on the bottle (and not necessarily about having a good time).

All of these, to me, can trace their lineage back to the oldest example I can remember, the successful Dos Equis campaign with the 'Most Interesting Man in the World'.

Those commercials, part of a stunningly successful campaign, seemed to establish this framework. An older knowledgeable man, with great experience, drinks Dos Equis. We don't get a reason why - it's just the way it is. So too with all these spots, which just leverage the history of their actors/characters to skip the part where you establish the back story.

I wonder if any of these campaigns have truly proven effective. After all, not every dark mysterious man can be the Most Interesting Man in the World.

Saturday, December 7, 2013

Movie Theater of the Future

AMC (the leading U.S. movie chain) is currently preparing for an IPO, and as part of their materials filed with the SEC, they outlined their expansion plans for the next five years.

It was pretty interesting to look at the outline of what they expect to deliver, because as the dominant player in movie theaters, it's a pretty clear indicator of where the whole market is headed (plus, the theater two blocks from us is an AMC, so it will likely be highly relevant for us.

The report detailed nine different revenue growth strategies AMC will use to grow within their existing theaters. Essentially, what they're going to start up-selling us to or using as a justification for higher ticket prices. And the details are expectations for the next five years, so its also meaningfully close (I'd recommend checking out the report if you're interested in the movie industry at all, at least I found it interesting)

Below is what they published as expectations over the next five years. The lowest row in the chart is the number of screens AMC is planning to get to in the next five years (it's broken down by region, but that's not important here and the image was too wide if I included all the labels). The row right on top of that is the incremental revenue expected per customer, in case you were wondering.

What you'll notice is that a lot of these strategies still have lots of room to grow. In many cases, only a couple hundred of AMC's ~5000 screens are covered. If you look at them in order of expected expansion in 5 years, it's a pretty good sign to what you'll be able to do when they reboot the Dark Knight in 2017.

"Innovative technology featuring 120+ drink flavor options; Customer customized" - This one is a bit of a yawn, because it only means installing Coke Freestyle machines that you already see at certain restaurants all over the place. Yes, it allows you 120+ permutations of soda, but having tried a ton of them, it's clear there's a reason Coke never tried to sell Blueberry Sprite. Soon they'll be everywhere, but that just means we'll all have to wait behind the most indecisive of us as they explore all their options.

Guarantee of pre-selected seat; Arrive just-in-time and anxiety- free Pre-selected seats will be available at half of AMC's theaters within 5 years. It's a nice idea that I've never had the chance to use. What it will likely mean is that a good portion of the theater's 'best' seats, are going to be allocated to pre-select (and likely, with a price increase). That's good for people who show up late, not so much for those of us who like getting their early.

Motorized, plush recliners with leg rest; Relax at the push of a button Now we're talking. AMC wants to roll out nicer chairs? I'm all for it. Unlike the first two items, this is something I'd actually want to see. Of course, it's something that requires them to physically re-model theaters and take them dark for a bit. But I'd like to see nicer seats and the ability to recline sounds pretty compelling (as long as they keep people from ruining them)

Full service bar serving premium beers, wines and mixed drinks; Enjoy before or after movie I actually think the theater near us has this already, but I've never really considered it when we go to the movies. If we want to go to a bar, we do. Still, nothing wrong with putting in a huge margin business where they have the space.

Casual, in theatre dining provided via seat side service; Conveniently satisfies consumer need for "dinner and a movie" Less excited for this one. I'm a huge fan of popcorn at the movies, but the idea of having a full dinner delivered just strikes me as weird. Call me old fashioned. However, this is also only going to expand to about 500 screens, so only 10% of their space. I don't think I'll have to be too worried about someone getting a chicken quesadilla delivered next to me

Shopping experience featuring broadened menu offerings, including made- to-order options Like the prior comment, I'm not a huge fan of the concession expansion which now includes all kinds of meals. Hot dogs and pizza are sacrilege to me. But again, small numbers here.

The last couple ones are basically bringing in Imax or expanding 3-D. 3-D is the furthest along and is mostly tapped out, I'd argue in part because the movies that actually can take advantage of it are rare and people are sick of getting screwed with an upcharge that doesn't do much.

But regardless, it's cool to think about how the experience will change. Of course, studios will likely be still cramming the screens with existing franchises and reboots to guarantee big openings. No details in the IPO document that talk about how to fix that.