Just when we thought the Chip Kelly era couldn’t surprise us anymore, Eagles owner Jeffrey Lurie pulled the big one on us.
Kelly, who arrived to the team with as much fanfare and expectation as any new NFL coach in recent memory, suddenly finds himself packing up his office and looking for the next destination for his traveling road show.
Lurie, never one to seek the spotlight, was forced to confront a gaggle of reporters to inject some clarity into what exactly happened down at NovaCare.
We didn’t get all the answers we would’ve liked, but we did get some interesting nuggets. And fortunately for me, lots and lots of smart writers have already chimed in with good takes on how all this went down (for my money, Sheil Kapadia’s report on ESPN is most directly aligned with my own stance on things).
But the changing of an Eagles administration can’t go by without some commentary, so I’m throwing out some thoughts based on everything I’ve heard since the Eagles executive team was blown up in the biggest Christmas present WIP and 97.5 the Fanatic have ever received.
1. We can finally confirm what happened this past off-season – Kelly demanded personnel control. It was a strong logical inference that Kelly went to Lurie with the demand for total authority over personnel, because Lurie wouldn’t just go out of his way to completely reorganize the front office. It seemed clear that Kelly, of the back of two 10-win seasons, was looking for more control (whether it was because he genuinely felt he deserved it, or because he was looking to head-off Howie Roseman in a power grab, remains unclear. Probably a mix of both).
2. Lurie at no point considered stripping Kelly of his personnel duties, and had already decided to move on – This was probably the most interesting thing to come out of Lurie’s discussion yesterday. As an external observer, what seemed clear was that Chip was a terrible personnel guy, but that he had strengths as a coach. When I heard he was released, my first thought was that Kelly tried to pull back on the personnel control, Kelly balked, and they agreed to part ways. This seemed reasonably logical, Kelly’s failings as a personnel guy are obvious, but no one likes to give up power. However, Lurie specifically noted that he never considered adjusting Kelly’s role. That’s an indicator of far bigger problems internally.
3. We finally understand why Howie Roseman didn’t leave when he was demoted – In the immediate aftermath of the announcement, I think a number of folks were really curious why Lurie, who had only just recently ceded total control to Kelly and verbally backed him, would turn around and fire him 15 games later. People saw that as wishy-washy, that Lurie flip-flopped on a coach he was so enamored with, and were surprised it happened so quickly.
But people should pay more attention to Lurie’s actions rather than his statements (remember, a verbal commitment to someone when you promote them is what you have to say. Lurie couldn’t give Chip full control and say, ‘well, we’ll see what happens now’).
What had always confused me about giving Kelly control was that Howie Roseman didn’t leave the organization. The fact that he was working on the other side of the building and never seemed to explore other opportunities was a huge indicator that Lurie wasn’t all-in on Chip. In the corporate world, the loser of an executive power struggle never sits comfortably in a minimized role, they leave, unless they have reason to think they’ll be back on top.
4. There’s a public resistance to Roseman, but I still like him – With Kelly out the door and Roseman winning another power struggle, his detractors are certainly coming out in full force. He does not have many fans in the Philadelphia area. But to me, I think his upside outweighs his downside. If we were to look at his record, he’s made a lot of pretty decent moves. The Eagles have certainly had a good amount of talent during most of his tenure. What I like most about Roseman is he understands value. He knows the value of accruing draft picks, he knows the value of locking players up, and he knows better than to just give away assets for nothing.
I believe Roseman, if he had full control, wouldn’t have given up assets like Evan Mathis, LeSean McCoy, or DeSean Jackson, for essentially nothing (I know he was GM when D-Jax was released, but I’m still assuming it wasn’t Roseman who was pushing for that move).
Roseman can make draft trades better than anyone and ensure that most of the time, the Eagles are constantly acquiring picks. No one is perfect in the draft, which is why you should acquire as many picks as possible. And while Roseman’s draft record has some notable misses (Watkins/Jarrett in 2011 – which may have been more Andy Reid, and Marcus Smith in 2014), looking at top picks in 2012 and 2013 (Cox, Kendricks, Johnson, Ertz, Logan) are pretty good hits. Roseman also takes shit for the ‘Dream Team’ in 2011 – but while the Nnamdi Asomugha deal looks awful in hindsight, it was perceived as a great move at the time. Those Dream Team signings also brought in Evan Mathis and Cullen Jenkins, so they weren’t all terrible moves.
The biggest problem Roseman has, from what I can see, is that a lot of people seem to dislike him and perceive him as a bean-counter with an endless appetite for power. Some of this is sour-grapes from people who’ve lost out to him in the past, some of it is (my view) the same type of stereotyping that Joe Banner had to deal with when he was in the same role. If Roseman’s name were Johnson, and he played some college football, half of what we hear disappears.
At any rate, Roseman looks like he may be the Littlefinger in the Eagles’ Game of Thrones saga, but I’m glad he’s back.
5. Chip had many failings during his tenure – but inability to get along with people is probably most directly responsible for his departure – Chip had a lot of issues, it’s starting to emerge that players didn’t really like him, executives didn’t like him, he didn’t really have a great relationship with the media or fans. Winning solves a lot of that. But being a smug asshole becomes much more grating when you aren’t succeeding. Bill Belichick has earned the right to be an asshole, but Kelly seemed to revel in being a dick when he hadn’t accomplished much of anything at the NFL level. That kind of attitude means you’re on a shorter leash, not a longer one. Contrast that with Andy Reid, who by all accounts I’ve seen is reportedly an awesome guy. Getting along with everyone, just being a good human being to other people and having good relationships, maybe that’s what kept Andy around Philadelphia for an extra year or two. Something for Kelly to consider in his next job.
6. I’m disappointed the Eagles are going to lose some of what Kelly has brought them – What sucks about ditching the Kelly administration is that there were areas where he was bringing new ideas and new thinking into the team. Granted, some of those ideas seemed to blow up in his face, but I believe there’s still a ton of value to getting some of those right.
People like to make fun of sports science, because it’s an easy target, and custom smoothies are naturally funny. But a coach who is bringing in leading researchers and trying this stuff is absolutely what you should want in an organization. The future of sports training is only going to get more scientific, not less, and Kelly’s attempts to leverage that were absolutely well-intended even if the results were hard to see. You want you coach looking for ways to get that extra edge (and if you’re the Patriots, that includes cheating), and I’m disappointed that some of what Kelly was pushing for will probably be thrown out the door with him.
7. I’m happy the Eagles decided to hire Chip – judging the process and not the outcome – I was listening to 97.5 yesterday, and the hosts were going on about how they can’t trust the same coaching search committee to do a good job when they screwed up in hiring Kelly. I think that’s just lazy thinking. While it’s clear bringing in Kelly didn’t have the results we all wanted, that’s judging the outcome rather than the process. Kelly represented bringing in ideas and approaches that were relatively novel in the conservative NFL. He was, by design, a high-variance strategy. There was a chance it would all blow up (and here we are), but there was certainly a chance he’d get it right and be a huge source of advantage for the Eagles for years.
I don’t mind Lurie taking a risk on that potential. I’d prefer that to just hiring someone who’s a big name coordinator or a former Super Bowl winner (e.g., Bill Cowher). This doesn’t mean I think the Eagles should always go out and hire the riskiest option available – but Kelly represented a chance to try something distinctly different and had a reasonable chance of succeeding (and still does by the way). You can’t argue the Eagles weren’t interesting the last three years.
8. The Eagles had better lose this game against the Giants – The Eagles are currently projected to pick 12th overall, but if they lose to the Giants they’ll leapfrog them in the only relevant results from this Sunday’s game. If I were Lurie, I’d be calling plays myself and starting all the backups. No good can come from winning this Sunday. Of course, Pat Shurmur as interim coach, might be trying to make himself look good. I’m worried, let’s hope the Eagles administration, having just hit ‘Go’ on a major rebuild, understand how the NFL draft order works.
Thursday, December 31, 2015
Tuesday, December 22, 2015
Sports Genetics
We recently came back from our winter vacation (first one without our baby, and a blowout of SPG points as my Platinum status is expiring) - and because our vacation was a relaxing beach destination, it actually gave me the chance to get some good book reading out of the way.
I'm not sure I read any books in 2015 until this trip, and the causes are threefold:
1. New baby - obviously something of a life change there
2. New job, trading consulting for corporate life - you'd think this would create more time, but it really works out to trading 2-3 hours of daily work time into 2-3 hours of daily commute time. On the plus side, I'm absolutely crushing my podcast listening queue.
3. My weekly Economist - I really need to take the throttle down to 26 issues a year instead of 52. There's just too much content and it starts to sound similar after a while. I'm now at the point where I can't hear the acronym OECD without immediately following it with, 'a group of mostly rich countries'. Next subscription, I'll take it down a notch.
Anyway, I got through three books while we were in Mexico:
- The New Rabbi: A book detailing the succession planning for a rabbi at a major conservative synagogue. Super-interesting, although it happened to be about my childhood synagogue where I spent hour after hour of agonizingly boring hebrew school - it was really interesting inside baseball office politics stuff.
- The Prize: The new book detailing Mark Zuckerberg's $100M gift to the Newark school system and what came of it. Also really interesting and at times infuriating.
- The Sports Gene: A book which outlines a number of recent studies/research into the science of genetics and its links to athletic performance.
The Sports Gene book was really interesting (and recommended), in part because it raises a ton of weird ethical questions around hypothetical scenarios that I, as a new parent, haven't really considered.
The author traveled all over the world, talking to genetics experts and world-class athletes, with a particular focus on many recently-identified genetic mutations that confer huge potential advantages in sports. As a few examples:
- Genes that influence what share of your muscles are 'fast-twitch' vs. 'slow-twitch' - which has major implications for sprinting vs. endurance events
- Genes that influence your responsiveness to training - which may explain why some high-potential college athletes plateau vs. unheralded walk-ons who rapidly progress
- Genes that influence your red blood cell count, your arm/leg length, your Achilles tendon stiffness - all of which could significantly help you in some (but not all) competitive sports
I didn't think the book was perfect. It really plays it down the middle on nature vs. nurture (which to be fair, it's not like there's an answer on), and for all its research on genetics impact on athletic traits it just hand-waves away the potential for genetics impact on academic traits. To me that's just as interesting...but I guess it's not called 'The Study Gene'.
But the book raises some interesting hypotheticals around genetics. Ones that will only become more real for society as more and more of the human genome is understood and linked to human performance.
If you knew your kid was predisposed to succeed at a certain sport, would you 'encourage' them to play it?
Let's imagine you had genes that made your red blood cell count super high, which means your blood could carry more oxygen than the average person, and you'd have a natural advantage at long-distance running...would you push your kid to run cross-country when they want to run the hurdles?
I think your answer will depend on what you think would be more beneficial to your kid -- is it better for them to pursue their own interests -- or maximize their chance at winning.
There are those who might say you should push your kids towards natural advantages because that might make them more likely to get a college scholarship or become a professional athlete -- but those odds are so small that let's hold that scenario out.
The answer might seem straight-forward, shouldn't you just let your kid do what they want? That's where I'm leaning too, but the devil's advocate in me is wondering if the value in being more successful might have more positive knock-on effects than just having a good time.
I say that just in the context of my own sports experiences as a kid. When I was a kid, I played all kinds of sports, and because I was a fat kid starting around the age of 11, I wasn't really good at most of them. Most of my sports genetics advantages, so much as they existed, applied primarily to Nintendo.
Soccer, baseball, basketball -- I played all of them every year, and probably met expectations for an overweight kid playing in the team's least harmful position (hello right field).
There was one completely bizarre outlier, and that was every summer when I went to overnight camp, because I was a freaking amazing swimmer.
Somewhere, buried in my old room, there's a pile of ribbons from all the swimming races I won over various summers. All form of strokes, distances, I was actually pretty good. I'm still not sure why - but it's probably both nature and nurture. I have long arms relative to my height, and a short torso. That's probably a small factor, because I also grew up with a pool and swam all the time as a kid growing up.
So - in hindsight, maybe I shouldn't have been afraid to wear the speedo as a high schooler (remember, I was a fat kid)? Would it have been better to play a sport I was pretty good at, rather than serve as the 4th string midfielder on the lacrosse team?
I'm not sure much would've changed, but it's an interesting question.
And what does that mean for my own kid? I'm not sure, but we'll have to see whether she wants to play sports at all. Remember, she's only 1. But with that said, right now her favorite activity by far is to grab a book, give it to me to read, pay attention to it, then grab another new book and give it to me.
I don't need new genetics research to help me with where she gets that.
I'm not sure I read any books in 2015 until this trip, and the causes are threefold:
1. New baby - obviously something of a life change there
2. New job, trading consulting for corporate life - you'd think this would create more time, but it really works out to trading 2-3 hours of daily work time into 2-3 hours of daily commute time. On the plus side, I'm absolutely crushing my podcast listening queue.
3. My weekly Economist - I really need to take the throttle down to 26 issues a year instead of 52. There's just too much content and it starts to sound similar after a while. I'm now at the point where I can't hear the acronym OECD without immediately following it with, 'a group of mostly rich countries'. Next subscription, I'll take it down a notch.
Anyway, I got through three books while we were in Mexico:
- The New Rabbi: A book detailing the succession planning for a rabbi at a major conservative synagogue. Super-interesting, although it happened to be about my childhood synagogue where I spent hour after hour of agonizingly boring hebrew school - it was really interesting inside baseball office politics stuff.
- The Prize: The new book detailing Mark Zuckerberg's $100M gift to the Newark school system and what came of it. Also really interesting and at times infuriating.
- The Sports Gene: A book which outlines a number of recent studies/research into the science of genetics and its links to athletic performance.
The Sports Gene book was really interesting (and recommended), in part because it raises a ton of weird ethical questions around hypothetical scenarios that I, as a new parent, haven't really considered.
The author traveled all over the world, talking to genetics experts and world-class athletes, with a particular focus on many recently-identified genetic mutations that confer huge potential advantages in sports. As a few examples:
- Genes that influence what share of your muscles are 'fast-twitch' vs. 'slow-twitch' - which has major implications for sprinting vs. endurance events
- Genes that influence your responsiveness to training - which may explain why some high-potential college athletes plateau vs. unheralded walk-ons who rapidly progress
- Genes that influence your red blood cell count, your arm/leg length, your Achilles tendon stiffness - all of which could significantly help you in some (but not all) competitive sports
I didn't think the book was perfect. It really plays it down the middle on nature vs. nurture (which to be fair, it's not like there's an answer on), and for all its research on genetics impact on athletic traits it just hand-waves away the potential for genetics impact on academic traits. To me that's just as interesting...but I guess it's not called 'The Study Gene'.
But the book raises some interesting hypotheticals around genetics. Ones that will only become more real for society as more and more of the human genome is understood and linked to human performance.
If you knew your kid was predisposed to succeed at a certain sport, would you 'encourage' them to play it?
Let's imagine you had genes that made your red blood cell count super high, which means your blood could carry more oxygen than the average person, and you'd have a natural advantage at long-distance running...would you push your kid to run cross-country when they want to run the hurdles?
I think your answer will depend on what you think would be more beneficial to your kid -- is it better for them to pursue their own interests -- or maximize their chance at winning.
There are those who might say you should push your kids towards natural advantages because that might make them more likely to get a college scholarship or become a professional athlete -- but those odds are so small that let's hold that scenario out.
The answer might seem straight-forward, shouldn't you just let your kid do what they want? That's where I'm leaning too, but the devil's advocate in me is wondering if the value in being more successful might have more positive knock-on effects than just having a good time.
I say that just in the context of my own sports experiences as a kid. When I was a kid, I played all kinds of sports, and because I was a fat kid starting around the age of 11, I wasn't really good at most of them. Most of my sports genetics advantages, so much as they existed, applied primarily to Nintendo.
Soccer, baseball, basketball -- I played all of them every year, and probably met expectations for an overweight kid playing in the team's least harmful position (hello right field).
There was one completely bizarre outlier, and that was every summer when I went to overnight camp, because I was a freaking amazing swimmer.
Somewhere, buried in my old room, there's a pile of ribbons from all the swimming races I won over various summers. All form of strokes, distances, I was actually pretty good. I'm still not sure why - but it's probably both nature and nurture. I have long arms relative to my height, and a short torso. That's probably a small factor, because I also grew up with a pool and swam all the time as a kid growing up.
So - in hindsight, maybe I shouldn't have been afraid to wear the speedo as a high schooler (remember, I was a fat kid)? Would it have been better to play a sport I was pretty good at, rather than serve as the 4th string midfielder on the lacrosse team?
I'm not sure much would've changed, but it's an interesting question.
And what does that mean for my own kid? I'm not sure, but we'll have to see whether she wants to play sports at all. Remember, she's only 1. But with that said, right now her favorite activity by far is to grab a book, give it to me to read, pay attention to it, then grab another new book and give it to me.
I don't need new genetics research to help me with where she gets that.
Monday, November 2, 2015
Reminder: NFL Trade Deadline is Overrated
The NFL trade deadline is tomorrow, and as usual there are a bunch of articles from football writers trying to drum up some interest with 'Trades that COULD happen' or rumors of players 'being shopped'
This post serves as a big reminder that it's all a bunch of nonsense. The NFL trade deadline is the most boring deadline this side of April 15th.
I can understand why writers would pump up the trade deadline -- it's very exciting in the OTHER major sports. And the NFL is a league we all obsess over, people even watch the draft combine on TV, so why wouldn't fans get excited about the trade deadline.
Because nothing ever happens. Trades just don't happen in the NFL, especially during the season.
I pulled up all the trades for the last ~10 years on pro football reference and looked for trades around the end of October in past seasons. Here are the players that were moved:
2014: Percy Harvin to the Jets for a 5th round draft pick
2013: Issac Sopoaga to the Patriots for a 5th round draft pick
2013: Bryant McKinnie to the Dolphins for a 7th round draft pick
2012: Mike Thomas (who?) to the Lions for a 5th round draft pick
2012: Ronnie Brown to the Lions for Jerome Harrison (a trade that was apparently voided on a subsequent physical)
2011: Carson Palmer to the Raiders for 1st and 2nd round draft picks
2011: Aaron Curry to the Raiders for 5th and 7th round draft picks
2011: Derrick Mason to the Texans for a conditional draft pick (that went unexercised - so basically for nothing)
2010: Alex Magee to the Bucs
2010: Jerome Harrison to the Eagles for Mike Bell
2010: Anthony Smith to the Packers for an unexercised conditional draft pick
And it goes on like that...
So, with the exception of a the Raiders crazy-ass acquisition of Carson Palmer (which I assumed happened under Al Davis, but it turns out he actually died two weeks before the trade), barely anything of consequence happens at the NFL trade deadline (unless you're Jerome Harrison).
There are a couple major reasons why trades don't really happen in the NFL:
- System Complexity: NFL coaching staffs run significantly more complicated systems than other major sports (just look at the size of the playbooks). The ramp-up time for any new arrival is non-trivial, so the expected impact of an in-season acquisition will always have a discount placed on it
- Information Asymmetry: We're just about halfway through the season, which means any NFL player on a roster has 7-8 games worth of tape from this year. That's not a lot of footage unless you go back to pre-season and prior seasons. The other major sports, by contrast, have 40+ or 80+ games to evaluate someone. The comfort in acquiring someone will be higher if you have more observations.
- Difficult Pricing: The NHL and MLB have significant minor league structures and rosters where teams can store/develop talent. This gives them much more material to work from in a trade and in effect - negotiate an appropriate price for another team's player(s). A baseball team has triple A, double A, etc. worth of rosters and prospects. Finding a reasonable match with a trade partner is easier if you've got more potential bargaining chips. An NFL team has its roster and it's future draft picks and that's it. There's no minor league team, no prospects to move. So for an NFL team to want to trade without using draft picks, they have to move a player off their roster, and matching with another team's roster becomes that much harder because your needs have to line up perfectly. That is, unless you trade draft picks...
- Overconfidence Bias in Draft Picks: The other reason trades don't happen in the NFL, is that GMs consistently overrate their ability to hit on draft picks. I forget my brother's historical draft analysis offhand, but the historical rate of finding a starter in the second round is like 50%, the third round is maybe 25%, and declining thereafter. But GMs continue to hold on to those picks like they're guaranteed winning lottery tickets when in reality, they're just regular lottery tickets. That's because trading a draft pick for a bottom of the roster player is much tougher to brag about than finding an all-pro in the 5th round -- leaving out the fact that the latter almost never happens.
- High Variance/Short Season Length: Last contributor -- is that the NFL season is short, and in a short season with only 16 games, lots and lots of teams have mathematical shots at making the playoffs (and as the Giants have always taught us, once you're in, anything can happen). It's easier for baseball or basketball teams to recognize they're out of the picture and they should focus on next year. But in the NFL, it's much harder to be completely eliminated. The Saints were left for dead several weeks ago, but three weeks and three wins later they're right back in the playoff picture. With such a short season, it's harder for a team to admit they truly have no shot because mathematically, they probably still have one.
All of those are contributing factors, and though there are probably more, it'll explain why tomorrow you may read about a trade or two - but they'll almost definitely be players that won't make a big difference.
(Note: As I wrote this, I see that the 49ers have traded Vernon Davis for a 6th round pick. If you think that's a major move, feel free to disagree with me, but I stand by everything I just said)
This post serves as a big reminder that it's all a bunch of nonsense. The NFL trade deadline is the most boring deadline this side of April 15th.
I can understand why writers would pump up the trade deadline -- it's very exciting in the OTHER major sports. And the NFL is a league we all obsess over, people even watch the draft combine on TV, so why wouldn't fans get excited about the trade deadline.
Because nothing ever happens. Trades just don't happen in the NFL, especially during the season.
I pulled up all the trades for the last ~10 years on pro football reference and looked for trades around the end of October in past seasons. Here are the players that were moved:
2014: Percy Harvin to the Jets for a 5th round draft pick
2013: Issac Sopoaga to the Patriots for a 5th round draft pick
2013: Bryant McKinnie to the Dolphins for a 7th round draft pick
2012: Mike Thomas (who?) to the Lions for a 5th round draft pick
2012: Ronnie Brown to the Lions for Jerome Harrison (a trade that was apparently voided on a subsequent physical)
2011: Carson Palmer to the Raiders for 1st and 2nd round draft picks
2011: Aaron Curry to the Raiders for 5th and 7th round draft picks
2011: Derrick Mason to the Texans for a conditional draft pick (that went unexercised - so basically for nothing)
2010: Alex Magee to the Bucs
2010: Jerome Harrison to the Eagles for Mike Bell
2010: Anthony Smith to the Packers for an unexercised conditional draft pick
And it goes on like that...
So, with the exception of a the Raiders crazy-ass acquisition of Carson Palmer (which I assumed happened under Al Davis, but it turns out he actually died two weeks before the trade), barely anything of consequence happens at the NFL trade deadline (unless you're Jerome Harrison).
There are a couple major reasons why trades don't really happen in the NFL:
- System Complexity: NFL coaching staffs run significantly more complicated systems than other major sports (just look at the size of the playbooks). The ramp-up time for any new arrival is non-trivial, so the expected impact of an in-season acquisition will always have a discount placed on it
- Information Asymmetry: We're just about halfway through the season, which means any NFL player on a roster has 7-8 games worth of tape from this year. That's not a lot of footage unless you go back to pre-season and prior seasons. The other major sports, by contrast, have 40+ or 80+ games to evaluate someone. The comfort in acquiring someone will be higher if you have more observations.
- Difficult Pricing: The NHL and MLB have significant minor league structures and rosters where teams can store/develop talent. This gives them much more material to work from in a trade and in effect - negotiate an appropriate price for another team's player(s). A baseball team has triple A, double A, etc. worth of rosters and prospects. Finding a reasonable match with a trade partner is easier if you've got more potential bargaining chips. An NFL team has its roster and it's future draft picks and that's it. There's no minor league team, no prospects to move. So for an NFL team to want to trade without using draft picks, they have to move a player off their roster, and matching with another team's roster becomes that much harder because your needs have to line up perfectly. That is, unless you trade draft picks...
- Overconfidence Bias in Draft Picks: The other reason trades don't happen in the NFL, is that GMs consistently overrate their ability to hit on draft picks. I forget my brother's historical draft analysis offhand, but the historical rate of finding a starter in the second round is like 50%, the third round is maybe 25%, and declining thereafter. But GMs continue to hold on to those picks like they're guaranteed winning lottery tickets when in reality, they're just regular lottery tickets. That's because trading a draft pick for a bottom of the roster player is much tougher to brag about than finding an all-pro in the 5th round -- leaving out the fact that the latter almost never happens.
- High Variance/Short Season Length: Last contributor -- is that the NFL season is short, and in a short season with only 16 games, lots and lots of teams have mathematical shots at making the playoffs (and as the Giants have always taught us, once you're in, anything can happen). It's easier for baseball or basketball teams to recognize they're out of the picture and they should focus on next year. But in the NFL, it's much harder to be completely eliminated. The Saints were left for dead several weeks ago, but three weeks and three wins later they're right back in the playoff picture. With such a short season, it's harder for a team to admit they truly have no shot because mathematically, they probably still have one.
All of those are contributing factors, and though there are probably more, it'll explain why tomorrow you may read about a trade or two - but they'll almost definitely be players that won't make a big difference.
(Note: As I wrote this, I see that the 49ers have traded Vernon Davis for a 6th round pick. If you think that's a major move, feel free to disagree with me, but I stand by everything I just said)
Friday, October 30, 2015
Please, No More PFF Arguments
I like football a lot. I like analytics a lot. Through some kind of not quite transitive property, I like football analytics a lot too.
But I'm so sick of seeing debate/criticism on Twitter of Pro Football Focus, who seem to constantly occupy a spot at the nexus of football analytics arguments.
What's weird is it's not the typical analytics arguments between guys yelling about 'guts' and guys yelling about data and which one is better. It seems a bit different, just pairing data-literate people against each other to argue over which stats mean something and which don't.
Pro Football Focus, from my vantage point, seems to provide a pretty valuable service.
They have a team of employees who watch the games and track all kinds of metrics. They focus on adding more detail and specificity on things that conventional stats on ESPN don't get it. That's a valuable service - and can be tremendously insightful.
They also publish player grades - which is the result of a detailed film review to score what each player did. The grades are the result of multiple reviewers, so it's not just one person, but the team collectively evaluates how all the players did, publishing results afterwards.
That's a less valuable service, doesn't mean it isn't insightful also, but it's less valuable than all the raw data. But since it takes a very complicated evaluation and boils it down to a simple positive or negative number, that's what people focus on.
These grades, as you can imagine, are often the source of Twitter feuds between PFF defenders and detractors. Those who say the grades are bullshit vs. those who say the numbers are valid.
I'm so sick of seeing these go back and forth on my timeline. Both sides are wrong.
The folks that hate on PFF argue that the grades are bullshit, and there are certainly cases where that's true. The fundamental flaw of their grading system is that, to be truly accurate, you need to know what a player was supposed to do, not just what they did. That means their grades are inherently subjective because they're guessing. In most cases, they're probably right, but not always. But with that said, are they probably pretty close to the right answer? Yeah. It's what we'd call 'directionally correct' in the consulting world. I'm sure any individual play could be off because you don't know a player's true assignment, but over the course of a game, a season, those mistakes should wash out. So if you're arguing over PFF's credibility on an individual grade, I'd say settle down, because on balance the ratings should be mostly right.
At the same time - PFF seems to get pretty damn smug about their system when someone criticizes it, and that's pretty stupid too.
This article notes the CEO of PFF remarking that criticism of player grading because of lack of visibility into assigned responsibility is lazy. I think that's wrong. It's not lazy to point out a methodological weakness. If you want to say the results are still valid on the whole - that's one thing - but let's not pretend your system is infallible.
I also hate that PFF constantly promotes the fact that 19 NFL teams subscribe to their services, because I think it leaves out a massive part of that equation. PFF uses the fact that NFL teams are subscribers to demonstrate the validity of their model and the value of their data. But the true indicator of your product's value isn't how many teams 'subscribe,' it's how much those teams pay for the subscription.
Anyone who has done business with a data service in any role knows that the service is always going to try and get you hooked on their platform with access at a low initial price. If I were running PFF, I would've tried to break into the league with an extremely low price to become the established platform for detailed game metrics - to become ubiquitous - and then focus on increasing the price/expanding to NCAA. It's not a complicated strategy.
So PFF brags about all the teams using their data. But unless we know how much they're paying, that evidence doesn't persuade me. However, I'm sure that it works on a lot of folks - and ultimately that's what you need to build a market standard platform.
I still think their data is probably pretty good and valuable for teams - even if there are some concerns around their grades. I wonder why a company like STATS, who pretty much owns the NBA's advanced analytics data source, hasn't grabbed them or launched a competitor. The barrier to entry seems pretty low (just find some football nuts who want to grade film - which STATS definitely already has).
What's more interesting to me isn't which platform becomes the standard for pro team offices, it's beyond that. Ultimately, sports wagering will be legal in the US. Whether it be restricted to Daily Fantasy or not, the walls will eventually come down. And at that point, the ability to offer proprietary data for sports analysis becomes much more valuable - because there will be much more real money riding on the outcomes. Bloomberg, Capital IQ, and other services like that are the analogs - and I'd have to think that the ultimate market for sports betting users (talking power users here, the ones who claim to win tons and tons in DFS), would be potentially significant.
I think that end game is where companies like PFF should be focused - not defending their grades on Twitter. After all, in that world, bets made based on their grades would ultimately speak for themselves and finally settle the question.
But I'm so sick of seeing debate/criticism on Twitter of Pro Football Focus, who seem to constantly occupy a spot at the nexus of football analytics arguments.
What's weird is it's not the typical analytics arguments between guys yelling about 'guts' and guys yelling about data and which one is better. It seems a bit different, just pairing data-literate people against each other to argue over which stats mean something and which don't.
Pro Football Focus, from my vantage point, seems to provide a pretty valuable service.
They have a team of employees who watch the games and track all kinds of metrics. They focus on adding more detail and specificity on things that conventional stats on ESPN don't get it. That's a valuable service - and can be tremendously insightful.
They also publish player grades - which is the result of a detailed film review to score what each player did. The grades are the result of multiple reviewers, so it's not just one person, but the team collectively evaluates how all the players did, publishing results afterwards.
That's a less valuable service, doesn't mean it isn't insightful also, but it's less valuable than all the raw data. But since it takes a very complicated evaluation and boils it down to a simple positive or negative number, that's what people focus on.
These grades, as you can imagine, are often the source of Twitter feuds between PFF defenders and detractors. Those who say the grades are bullshit vs. those who say the numbers are valid.
I'm so sick of seeing these go back and forth on my timeline. Both sides are wrong.
The folks that hate on PFF argue that the grades are bullshit, and there are certainly cases where that's true. The fundamental flaw of their grading system is that, to be truly accurate, you need to know what a player was supposed to do, not just what they did. That means their grades are inherently subjective because they're guessing. In most cases, they're probably right, but not always. But with that said, are they probably pretty close to the right answer? Yeah. It's what we'd call 'directionally correct' in the consulting world. I'm sure any individual play could be off because you don't know a player's true assignment, but over the course of a game, a season, those mistakes should wash out. So if you're arguing over PFF's credibility on an individual grade, I'd say settle down, because on balance the ratings should be mostly right.
At the same time - PFF seems to get pretty damn smug about their system when someone criticizes it, and that's pretty stupid too.
This article notes the CEO of PFF remarking that criticism of player grading because of lack of visibility into assigned responsibility is lazy. I think that's wrong. It's not lazy to point out a methodological weakness. If you want to say the results are still valid on the whole - that's one thing - but let's not pretend your system is infallible.
I also hate that PFF constantly promotes the fact that 19 NFL teams subscribe to their services, because I think it leaves out a massive part of that equation. PFF uses the fact that NFL teams are subscribers to demonstrate the validity of their model and the value of their data. But the true indicator of your product's value isn't how many teams 'subscribe,' it's how much those teams pay for the subscription.
Anyone who has done business with a data service in any role knows that the service is always going to try and get you hooked on their platform with access at a low initial price. If I were running PFF, I would've tried to break into the league with an extremely low price to become the established platform for detailed game metrics - to become ubiquitous - and then focus on increasing the price/expanding to NCAA. It's not a complicated strategy.
So PFF brags about all the teams using their data. But unless we know how much they're paying, that evidence doesn't persuade me. However, I'm sure that it works on a lot of folks - and ultimately that's what you need to build a market standard platform.
I still think their data is probably pretty good and valuable for teams - even if there are some concerns around their grades. I wonder why a company like STATS, who pretty much owns the NBA's advanced analytics data source, hasn't grabbed them or launched a competitor. The barrier to entry seems pretty low (just find some football nuts who want to grade film - which STATS definitely already has).
What's more interesting to me isn't which platform becomes the standard for pro team offices, it's beyond that. Ultimately, sports wagering will be legal in the US. Whether it be restricted to Daily Fantasy or not, the walls will eventually come down. And at that point, the ability to offer proprietary data for sports analysis becomes much more valuable - because there will be much more real money riding on the outcomes. Bloomberg, Capital IQ, and other services like that are the analogs - and I'd have to think that the ultimate market for sports betting users (talking power users here, the ones who claim to win tons and tons in DFS), would be potentially significant.
I think that end game is where companies like PFF should be focused - not defending their grades on Twitter. After all, in that world, bets made based on their grades would ultimately speak for themselves and finally settle the question.
Saturday, September 12, 2015
Thoughts on Daily Fantasy - DraftKings, FanDuel, and the Rest
I tried to think of a narrative thread to organize some of the thoughts I've had around daily fantasy sports, but there didn't seem to be one and since blogging is now reduced to only possible when the baby is napping, I figured stream of consciousness is better than no consciousness at all.
If you're any kind of football fan, it has been wholly impossible to escape the constant barrage of advertisements for the exploding world of daily fantasy sports. Enabled by technology and loose regulation, daily fantasy is already one of those things you keep seeing articles about because of all the interest in it as a new source of revenue. It's also the next step in evolution of fantasy sports, a medium which was already taking too much of our collective time, but is now quicker and much more focused on immediate gratification than its stodgier parent - season-long fantasy. There's a point about our culture in there, but there's no time to discuss it.
Whereas season-long fantasy sports require you to draft a roster and manage it throughout an entire sports season, daily fantasy is exactly as its name describes, over and done with in a day. You draft a team immediately, and play them immediately, and get results immediately...then you start over from scratch. It takes the emotional attachment of managing a team for months to creating new team after new team after new team, throwing the old away once the day's games are complete. Tinder, but for fantasy sports.
And as the launch of the NFL season hits (which has to be the biggest fantasy sport on the planet), all daily fantasy companies are desperately trying to lock in the largest share of players - many of whom are just discovering the format.
I'm one of those players, and if my experience is any indication, these companies (DraftKings and Fanduel are the most prominent) are really effective at finding me and blasting the crap out of me with ads. I've seen tons of commercials on TV, I've seen promoted tweets, I've heard live reads on multiple podcasts. I've also seen multiple billboards, ads on the sides of buses, and even ads on the loading screen on my Roku box.
The only choice I had to make was which of the hundreds of referral codes I used to sign up.
But as I'm starting an experiment with DFS (that's what the people in the know call daily fantasy), a bunch of thoughts have run through my head:
This reminds me, almost exactly, of the online poker boom of the early 2000's - It's eerie in its resemblance. Most new DFS players are probably too young to remember the poker boom, which was probably around 2002-2003, when everyone and their mother was signing up to play online poker. Enabled by technology, new players flocked to try and make some money on sites that advertised the crap out of themselves -- because when you're a gambling institution, all you need is customers and you're guaranteed to make a profit. Sound familiar? I wonder if DraftKings just went and hired all the folks that used to work for online poker companies in the US
It's exactly like the poker boom, except one small difference - DFS companies, taking a page out of the Uber playbook, has done a couple things to prevent the US government from pulling the plug on them (technically, its allowed in most of the country because it's a 'fantasy sports game' and technically classified as a 'game of skill' rather than a 'game of chance'). Now DFS may be temporarily classified as a game of skill, but there's no reason the government can't change it up as they see fit, or go after payment processors as they did with poker back in the day. But DFS is going with a two-pronged approach...the first is, 'get so big so fast that the government can't shut you down' which is textbook Uber. If you reach such a critical mass, then any move to ban you will be met with a ton of consumer resistance (look at DeBlasio's recent 180 on Uber in NYC as an example of how this works in practice). However, this might not be as effective as in Uber's case, as the consumer base is much smaller and under the umbrella of 'sin'. That's why DFS' second prong is all the more important - they've aligned themselves with the professional sports leagues just about as tightly as they can. The leagues have invested in these companies, teams now are sponsored by DFS providers, major media has integrated themselves via investment and partnerships (Good luck trying to read an ESPN fantasy article without it touching on DraftKings). All this makes it harder and harder for government to pull the brakes (note: that doesn't mean they can't tax the crap of out them).
If DFS grows like the companies want it to, why wouldn't they get taken to the woodshed by the tax man - Assume the DFS market gets so big that government decides they can't possibly stop it. That would be great, except 'sin taxes' are still largely OK in most people's view, and often the only type of tax that can get support from legislators and a majority of voters. No one really complains when cities/states raise taxes on cigarettes (except smokers, which few people even openly admit to)...and where gambling is legalized, you see it getting it's shit taxed to the hilt in many cases (because running a gambling operation, as I said, is a license to print money if you can get people in the door). Some might argue that this would limit the financial payouts of DFS companies and make the games worse, but I don't think that's true...because...
Barriers to Entry do not exist - There's nothing to stop me, you, or anyone else from opening a DFS company. My default fantasy league is in Yahoo, and when I did my draft this week you know what I got, an advertisement to play in Yahoo's DFS game. There is really nothing to stop anyone from jumping into the pool, as far as I'm aware, I don't think there's a license required to use a sports league's name/stats. That's another element from the Online Poker boom, where sites exploded so fast all trying to grab as many players as possible, because without players you have no prize pool and no company. That's why we're seeing so much marketing now, and why we'll keep seeing it as long as DFS is permitted. There's very negligible differentiation between DFS companies -- game formats are similar, game structures/payouts are similar, I'd bet the interfaces and payment processes are similar...but signing up for an account and depositing money makes a subscriber relatively sticky...so without any real differentiation, you need to grab as much of the land rush as possible...and here we are.
That legislation is BS, DFS are games of luck - Don't let anyone tell you differently because they're probably selling you something, but to call DFS a 'game of skill' seems pretty laughable. If someone wants to show me where the skill is, I'd love to see it, but I don't think it's significantly more/less skill than betting on games against the spread. Many of these sites advertise large competitions for big payouts (like $1M), and in these formats, everyone drafts a team and enters the pool, and the best lineup wins the prize. I looked at that format for about two seconds to realize that you'd need to pursue a high-variance strategy to have any prayer of winning in such a large pool. And you know what that's like? It's exactly like your NCAA March Madness pool. If you want to tell me that winning an NCAA pool is a game of skill, I'll laugh my ass off.
I also think it's impossible to argue there's skill involved in DFS other formats (at least when it comes to football). We'll test this theory, I'm going to give it a shot this year and see how it goes...but there's no way DFS could be anywhere close to something like poker in terms of skill vs. luck. The primary reason I feel that way comes back to variance. If you play online poker, you can play thousands and thousands of hands, and over that time, your results are going to calibrate based on your overall skill level. You can play thousands and thousands of times a day. If you're playing DFS for NFL football, there's a couple different ways variance works against you. In the first place, there are only 17 weeks of the season. So we'll evaluate your skill over 17 weeks vs. thousands of poker hands...do you think there's still going to be a lot of variance in how you do over 17 observations? And as a second point, in poker, there's absolutely no variance in terms of how the cards perform. An Ace is always an Ace. A flush always beats two pair. This is concrete and probabilistic. In fantasy football, your Ace might turn out to be a six. Your two might be a King. Your flush might lose to two pair, because there are tons of additional variables that impact the outcome. There's never a chance the King of Spades tears his ACL and doesn't appear on the flop.
So you have exponentially fewer observations in DFS vs. poker, and you have tremendous variance in the value of game pieces in DFS vs. poker. And you want to tell me winning at this is skill??? I'm willing to hear arguments to the contrary, but I don't buy it.
Having said that, I'm still excited to try it - I hope I prove myself wrong. And if you do want to play - use my referral link. Haha, another classic from the poker boom.
If you're any kind of football fan, it has been wholly impossible to escape the constant barrage of advertisements for the exploding world of daily fantasy sports. Enabled by technology and loose regulation, daily fantasy is already one of those things you keep seeing articles about because of all the interest in it as a new source of revenue. It's also the next step in evolution of fantasy sports, a medium which was already taking too much of our collective time, but is now quicker and much more focused on immediate gratification than its stodgier parent - season-long fantasy. There's a point about our culture in there, but there's no time to discuss it.
Whereas season-long fantasy sports require you to draft a roster and manage it throughout an entire sports season, daily fantasy is exactly as its name describes, over and done with in a day. You draft a team immediately, and play them immediately, and get results immediately...then you start over from scratch. It takes the emotional attachment of managing a team for months to creating new team after new team after new team, throwing the old away once the day's games are complete. Tinder, but for fantasy sports.
And as the launch of the NFL season hits (which has to be the biggest fantasy sport on the planet), all daily fantasy companies are desperately trying to lock in the largest share of players - many of whom are just discovering the format.
I'm one of those players, and if my experience is any indication, these companies (DraftKings and Fanduel are the most prominent) are really effective at finding me and blasting the crap out of me with ads. I've seen tons of commercials on TV, I've seen promoted tweets, I've heard live reads on multiple podcasts. I've also seen multiple billboards, ads on the sides of buses, and even ads on the loading screen on my Roku box.
The only choice I had to make was which of the hundreds of referral codes I used to sign up.
But as I'm starting an experiment with DFS (that's what the people in the know call daily fantasy), a bunch of thoughts have run through my head:
This reminds me, almost exactly, of the online poker boom of the early 2000's - It's eerie in its resemblance. Most new DFS players are probably too young to remember the poker boom, which was probably around 2002-2003, when everyone and their mother was signing up to play online poker. Enabled by technology, new players flocked to try and make some money on sites that advertised the crap out of themselves -- because when you're a gambling institution, all you need is customers and you're guaranteed to make a profit. Sound familiar? I wonder if DraftKings just went and hired all the folks that used to work for online poker companies in the US
It's exactly like the poker boom, except one small difference - DFS companies, taking a page out of the Uber playbook, has done a couple things to prevent the US government from pulling the plug on them (technically, its allowed in most of the country because it's a 'fantasy sports game' and technically classified as a 'game of skill' rather than a 'game of chance'). Now DFS may be temporarily classified as a game of skill, but there's no reason the government can't change it up as they see fit, or go after payment processors as they did with poker back in the day. But DFS is going with a two-pronged approach...the first is, 'get so big so fast that the government can't shut you down' which is textbook Uber. If you reach such a critical mass, then any move to ban you will be met with a ton of consumer resistance (look at DeBlasio's recent 180 on Uber in NYC as an example of how this works in practice). However, this might not be as effective as in Uber's case, as the consumer base is much smaller and under the umbrella of 'sin'. That's why DFS' second prong is all the more important - they've aligned themselves with the professional sports leagues just about as tightly as they can. The leagues have invested in these companies, teams now are sponsored by DFS providers, major media has integrated themselves via investment and partnerships (Good luck trying to read an ESPN fantasy article without it touching on DraftKings). All this makes it harder and harder for government to pull the brakes (note: that doesn't mean they can't tax the crap of out them).
If DFS grows like the companies want it to, why wouldn't they get taken to the woodshed by the tax man - Assume the DFS market gets so big that government decides they can't possibly stop it. That would be great, except 'sin taxes' are still largely OK in most people's view, and often the only type of tax that can get support from legislators and a majority of voters. No one really complains when cities/states raise taxes on cigarettes (except smokers, which few people even openly admit to)...and where gambling is legalized, you see it getting it's shit taxed to the hilt in many cases (because running a gambling operation, as I said, is a license to print money if you can get people in the door). Some might argue that this would limit the financial payouts of DFS companies and make the games worse, but I don't think that's true...because...
Barriers to Entry do not exist - There's nothing to stop me, you, or anyone else from opening a DFS company. My default fantasy league is in Yahoo, and when I did my draft this week you know what I got, an advertisement to play in Yahoo's DFS game. There is really nothing to stop anyone from jumping into the pool, as far as I'm aware, I don't think there's a license required to use a sports league's name/stats. That's another element from the Online Poker boom, where sites exploded so fast all trying to grab as many players as possible, because without players you have no prize pool and no company. That's why we're seeing so much marketing now, and why we'll keep seeing it as long as DFS is permitted. There's very negligible differentiation between DFS companies -- game formats are similar, game structures/payouts are similar, I'd bet the interfaces and payment processes are similar...but signing up for an account and depositing money makes a subscriber relatively sticky...so without any real differentiation, you need to grab as much of the land rush as possible...and here we are.
That legislation is BS, DFS are games of luck - Don't let anyone tell you differently because they're probably selling you something, but to call DFS a 'game of skill' seems pretty laughable. If someone wants to show me where the skill is, I'd love to see it, but I don't think it's significantly more/less skill than betting on games against the spread. Many of these sites advertise large competitions for big payouts (like $1M), and in these formats, everyone drafts a team and enters the pool, and the best lineup wins the prize. I looked at that format for about two seconds to realize that you'd need to pursue a high-variance strategy to have any prayer of winning in such a large pool. And you know what that's like? It's exactly like your NCAA March Madness pool. If you want to tell me that winning an NCAA pool is a game of skill, I'll laugh my ass off.
I also think it's impossible to argue there's skill involved in DFS other formats (at least when it comes to football). We'll test this theory, I'm going to give it a shot this year and see how it goes...but there's no way DFS could be anywhere close to something like poker in terms of skill vs. luck. The primary reason I feel that way comes back to variance. If you play online poker, you can play thousands and thousands of hands, and over that time, your results are going to calibrate based on your overall skill level. You can play thousands and thousands of times a day. If you're playing DFS for NFL football, there's a couple different ways variance works against you. In the first place, there are only 17 weeks of the season. So we'll evaluate your skill over 17 weeks vs. thousands of poker hands...do you think there's still going to be a lot of variance in how you do over 17 observations? And as a second point, in poker, there's absolutely no variance in terms of how the cards perform. An Ace is always an Ace. A flush always beats two pair. This is concrete and probabilistic. In fantasy football, your Ace might turn out to be a six. Your two might be a King. Your flush might lose to two pair, because there are tons of additional variables that impact the outcome. There's never a chance the King of Spades tears his ACL and doesn't appear on the flop.
So you have exponentially fewer observations in DFS vs. poker, and you have tremendous variance in the value of game pieces in DFS vs. poker. And you want to tell me winning at this is skill??? I'm willing to hear arguments to the contrary, but I don't buy it.
Having said that, I'm still excited to try it - I hope I prove myself wrong. And if you do want to play - use my referral link. Haha, another classic from the poker boom.
Monday, August 17, 2015
Just a Reminder - Matt Barkley Does Not Have Trade Value
It was exciting to finally watch an Eagles game yesterday, even if it was only pre-season and even if I had to work real hard to figure out which guy was wearing which number.
With a solid performance from backup Matt Barkley - it may only be a matter of time before we start to hear talk radio rumblings about how the Eagles should trade their new surplus at QB. Given so many teams in the NFL are desperate for QBs - I'm sure folks will have visions of second day draft picks dancing in their heads from a team like the Jets or anyone else who sustains an injury.
I wanted to throw some cold water on that talk before it even gets started.
Let's set aside the debate over which QB, Barkley or Tim Tebow, that Chip Kelly would rather have on his roster behind Sam Bradford and Mark Sanchez. That's a whole different discussion - and a fun one - but one that's best left to WIP to debate for the next 4 weeks.
Let's assume that Kelly wants Tebow and as such, Barkley becomes expendable. It wouldn't be shocking (Barkley was a Roseman pick after all and hence, wears a secret scarlet letter that only Chip can see).
But if the Eagles wanted to move Barkley - what's the realistic return from another QB desperate team? Let's look at the data...
I went back and found all the QB trades from the last few years and focused on ones that were made after the draft but before the season got started. What QBs got traded in that period and what value was exchanged:
August 2014: Patriots trade Ryan Mallett to Texans for a conditional 6th/7th round draft pick in 2016
June 2014: Texans trade TJ Yates to Falcons for linebacker Akeem Dent
August 2012: Seahawks trade Tavaris Jackson to Bills for a 2013 7th round draft pick
July 2011: Eagles trade Kevin Kolb to Cardinals for a 2012 2nd round draft pick and DRC
July 2011: Redskins trade Donovan McNabb to Vikings for a 2012 6th round draft pick
September 2010: Vikings trade Sage Rosenfels (and another player) to Giants for a 7th round draft pick
August 2010: Ravens trade John Beck to Redskins for CB Doug Dutch
September 2009: Chiefs trade Tyler Thigpen to Dolphins for a 3rd round draft pick
September 2009: Buccaneers trade Luke McCown to Patriots for a 7th round draft pick
September 2009: Lions trade Kevin O'Connell to Jets for a 7th round draft pick
Those are the last ten QB trades from roughly this period in the NFL calendar. There's one clear outlier - the Eagles highway robbery of the Cardinals in the Kevin Kolb deal - but remember Kolb at least had the pedigree of a high draft pick and several years of Andy Reid tutelage. Just about all the other deals are for 6th or 7th round picks or fringe players.
While it only takes one desperate team to overvalue someone (the Chiefs got a third round pick for Tyler Thigpen? Crazy!) - let's temper our expectations on Matt Barkley's trade value. If the Eagles do decide to move him - don't expect more than a 7th round pick.
With a solid performance from backup Matt Barkley - it may only be a matter of time before we start to hear talk radio rumblings about how the Eagles should trade their new surplus at QB. Given so many teams in the NFL are desperate for QBs - I'm sure folks will have visions of second day draft picks dancing in their heads from a team like the Jets or anyone else who sustains an injury.
I wanted to throw some cold water on that talk before it even gets started.
Let's set aside the debate over which QB, Barkley or Tim Tebow, that Chip Kelly would rather have on his roster behind Sam Bradford and Mark Sanchez. That's a whole different discussion - and a fun one - but one that's best left to WIP to debate for the next 4 weeks.
Let's assume that Kelly wants Tebow and as such, Barkley becomes expendable. It wouldn't be shocking (Barkley was a Roseman pick after all and hence, wears a secret scarlet letter that only Chip can see).
But if the Eagles wanted to move Barkley - what's the realistic return from another QB desperate team? Let's look at the data...
I went back and found all the QB trades from the last few years and focused on ones that were made after the draft but before the season got started. What QBs got traded in that period and what value was exchanged:
August 2014: Patriots trade Ryan Mallett to Texans for a conditional 6th/7th round draft pick in 2016
June 2014: Texans trade TJ Yates to Falcons for linebacker Akeem Dent
August 2012: Seahawks trade Tavaris Jackson to Bills for a 2013 7th round draft pick
July 2011: Eagles trade Kevin Kolb to Cardinals for a 2012 2nd round draft pick and DRC
July 2011: Redskins trade Donovan McNabb to Vikings for a 2012 6th round draft pick
September 2010: Vikings trade Sage Rosenfels (and another player) to Giants for a 7th round draft pick
August 2010: Ravens trade John Beck to Redskins for CB Doug Dutch
September 2009: Chiefs trade Tyler Thigpen to Dolphins for a 3rd round draft pick
September 2009: Buccaneers trade Luke McCown to Patriots for a 7th round draft pick
September 2009: Lions trade Kevin O'Connell to Jets for a 7th round draft pick
Those are the last ten QB trades from roughly this period in the NFL calendar. There's one clear outlier - the Eagles highway robbery of the Cardinals in the Kevin Kolb deal - but remember Kolb at least had the pedigree of a high draft pick and several years of Andy Reid tutelage. Just about all the other deals are for 6th or 7th round picks or fringe players.
While it only takes one desperate team to overvalue someone (the Chiefs got a third round pick for Tyler Thigpen? Crazy!) - let's temper our expectations on Matt Barkley's trade value. If the Eagles do decide to move him - don't expect more than a 7th round pick.
Friday, July 17, 2015
ClassPass Model
One of the things I missed as a consultant was having a gym membership. One tough part about being on the road four days a week (apart from never seeing your family) was that the economics of a gym membership could never add up if you only had three days a week where you could actually visit it.
Even after leaving consulting, it still doesn't make economic sense - because I have a free substitute - a fitness center in our apartment building. It offers maybe 65% of the benefits of the gym, but while being as convenient as possible and free (or to get technical, baked into our rent costs).
But when I read about ClassPass - a new gym class startup, I was a little intrigued.
Their offer is a flat monthly fee, and you can book classes at any participating gyms/studios. They sign up dozens of studios (and fill their excess capacity) and you can take classes at them without formal signups or subscriptions. Customers pay a reduced fee than if they were to pay for individual classes (typically the gym gets around 50% of their typical rate)
I thought it might be interesting to use and sample different places in the area - until I realized that it's pretty much just for women. By that I mean, if you want to take yoga and barre classes - then its great. But there aren't a whole lot of dude-friendly workouts on there.
So it wasn't going to work for me...but I've continued to wonder if their model is going to work for their member gyms either...
I'm not so sure it will, and to me its because the challenge for gym owners is often at-odds with ClassPass' goal.
Gyms want to make money - and the best way for a gym to do that is through enlisting and maintaining subscribers. Subscribers provide a consistent revenue stream and they're relatively sticky (as opposed to transaction-based per-class customers).
But I'm not sure ClassPass exists to drive subscribers. ClassPass serves as a way to fill excess capacity in existing gym classes - but I'm 100% sure their primary goal is to enlist and maintain subscribers too. And that's where I think it may break down (or limit its upside).
The most immediate comparisons I can think of for ClassPass are Groupon, TKTS booths in NYC, and booking sites like Hotwire. All of those provide cheaper prices for excess capacity in restaurants, broadway shows, and hotels/cars.
But all of those companies supply base are transaction-oriented revenue, not subscription-oriented revenue.
For all those Groupon, TKTS, hotel transactions, the consumer gets a cheaper price, the end-supplier gets revenue that exceeds its extremely low marginal cost, and the middle-man gets a cut for connecting the two.
But now when you use ClassPass - the consumer gets to take a class at a reduced rate (good for consumer), the end-supplier gets some revenue that also exceeds its marginal cost, and the middle-man gets its cut. So what's the problem.
The end-supplier isn't in the business of selling every class out. They are in the business of finding and signing up subscribers.
Now, filling every class is, in a vacuum, good for a gym. But what's better is having a full class of subscribers that often don't show up. The ideal utilization rate for a gym is NOT 100%.
This would be OK is ClassPass was a good vehicle to drive subscribers. And this is certainly how ClassPass would pitch itself to any gym. But I'm curious to know the stats on it. Because ClassPass certainly doesn't want to lose subscribers, and I have a hard time believing most ClassPass subscribers want TWO different gym subscriptions.
There's also something of a risk to using ClassPass if you're a gym owner. Because you charge more on a per-class basis to your subscribers than you do to ClassPass users - you might end up taking some of your best customers (the ones that pay and never show up) and making them realize they'd save money using ClassPass. ClassPass limits you to taking 4 classes at any one gym in a given month - but I'll bet there are some regular gym members who pay normal fees for exactly that much usage.
To it's credit - ClassPass tries to manage this problem. The gyms can place a limit on how much space they allocate to ClassPassers, so it doesn't have to be a big number, but I still would have doubts that the service is the easiest way to boost subscribers. I do think it would do a great job of attracting the cheapest customers (ClassPass users who would never sign up for expensive memberships and are content to pick and choose across ClassPass gyms) - but these folks would never pay full fare.
I do think ClassPass would be a big benefit to new gyms, ones that are trying to get people in the door and build awareness. But I'm skeptical that the model is a long-term win for gyms - because I think when push comes to shove, ClassPass and their suppliers both want the same thing.
Even after leaving consulting, it still doesn't make economic sense - because I have a free substitute - a fitness center in our apartment building. It offers maybe 65% of the benefits of the gym, but while being as convenient as possible and free (or to get technical, baked into our rent costs).
But when I read about ClassPass - a new gym class startup, I was a little intrigued.
Their offer is a flat monthly fee, and you can book classes at any participating gyms/studios. They sign up dozens of studios (and fill their excess capacity) and you can take classes at them without formal signups or subscriptions. Customers pay a reduced fee than if they were to pay for individual classes (typically the gym gets around 50% of their typical rate)
I thought it might be interesting to use and sample different places in the area - until I realized that it's pretty much just for women. By that I mean, if you want to take yoga and barre classes - then its great. But there aren't a whole lot of dude-friendly workouts on there.
So it wasn't going to work for me...but I've continued to wonder if their model is going to work for their member gyms either...
I'm not so sure it will, and to me its because the challenge for gym owners is often at-odds with ClassPass' goal.
Gyms want to make money - and the best way for a gym to do that is through enlisting and maintaining subscribers. Subscribers provide a consistent revenue stream and they're relatively sticky (as opposed to transaction-based per-class customers).
But I'm not sure ClassPass exists to drive subscribers. ClassPass serves as a way to fill excess capacity in existing gym classes - but I'm 100% sure their primary goal is to enlist and maintain subscribers too. And that's where I think it may break down (or limit its upside).
The most immediate comparisons I can think of for ClassPass are Groupon, TKTS booths in NYC, and booking sites like Hotwire. All of those provide cheaper prices for excess capacity in restaurants, broadway shows, and hotels/cars.
But all of those companies supply base are transaction-oriented revenue, not subscription-oriented revenue.
For all those Groupon, TKTS, hotel transactions, the consumer gets a cheaper price, the end-supplier gets revenue that exceeds its extremely low marginal cost, and the middle-man gets a cut for connecting the two.
But now when you use ClassPass - the consumer gets to take a class at a reduced rate (good for consumer), the end-supplier gets some revenue that also exceeds its marginal cost, and the middle-man gets its cut. So what's the problem.
The end-supplier isn't in the business of selling every class out. They are in the business of finding and signing up subscribers.
Now, filling every class is, in a vacuum, good for a gym. But what's better is having a full class of subscribers that often don't show up. The ideal utilization rate for a gym is NOT 100%.
This would be OK is ClassPass was a good vehicle to drive subscribers. And this is certainly how ClassPass would pitch itself to any gym. But I'm curious to know the stats on it. Because ClassPass certainly doesn't want to lose subscribers, and I have a hard time believing most ClassPass subscribers want TWO different gym subscriptions.
There's also something of a risk to using ClassPass if you're a gym owner. Because you charge more on a per-class basis to your subscribers than you do to ClassPass users - you might end up taking some of your best customers (the ones that pay and never show up) and making them realize they'd save money using ClassPass. ClassPass limits you to taking 4 classes at any one gym in a given month - but I'll bet there are some regular gym members who pay normal fees for exactly that much usage.
To it's credit - ClassPass tries to manage this problem. The gyms can place a limit on how much space they allocate to ClassPassers, so it doesn't have to be a big number, but I still would have doubts that the service is the easiest way to boost subscribers. I do think it would do a great job of attracting the cheapest customers (ClassPass users who would never sign up for expensive memberships and are content to pick and choose across ClassPass gyms) - but these folks would never pay full fare.
I do think ClassPass would be a big benefit to new gyms, ones that are trying to get people in the door and build awareness. But I'm skeptical that the model is a long-term win for gyms - because I think when push comes to shove, ClassPass and their suppliers both want the same thing.
Tuesday, June 30, 2015
Why Do I Keep Seeing Fidelity on Every VC Deal?
I follow the news regarding startups and venture capital firms fairly closely - and lately I keep seeing something that confuses me. It's not the increasingly eye-popping valuation numbers, or the fact that every article is obsessed with declaring the next unicorn, but more often its who is in on these later rounds.
More frequently, it's not your typical VC firm, but a more traditional investment firm - one that you'd expect to see advertising on the Sunday morning news shows, not being mentioned in TechCrunch.
There have been articles on the trend - but I was particularly interested in Fidelity - who I think is doing it the most. I feel like every other day I read about Fidelity putting another bunch of capital into the later round of a 'unicorn'.
Crunchbase confirms that if they aren't the biggest recent VC investor, they've got to be pretty darn close.
June 28 - AirBnB -$1.5B round
June 25 - WeWork - $400M Series E
June 10 - PaxLabs - $47M Series C
June 9 - Blue Apron - $135M Series D
May 29 - Snapchat - $338M Series E
May 8 - Pintrest - $186M Series G
Now those totals are the whole round, not Fidelity's specific commitments, but that seems like a LOT of deals in a very short time span.
And I've been trying to wrap my mind around how/why they are putting out so much money so fast, in seemingly every big deal that gets announced.
The first argument would be that they're investing to generate a return. OK sure, but is that really possible?
I decided to do a little digging. One of the things that makes tracking Fidelity's VC investments difficult is that they operate so many different funds. When Fidelity announces an investment - it's not always in the same mutual fund bucket (which to me raises an interesting question as to how they allocate deals, but that's another subject altogether). I saw a reference to three primary funds for VC investments - the Contrafund, the Growth Company Fund, and the OTC Fund.
So I pulled all those funds most recent Holdings reports - which list all their investments as of May (so I missed out on some of the more recent deals).
I did a rough filter to try and ascertain how much VC exposure each of the funds had:
Contrafund ($112B total) - about 1.1% or $1.2B...largest investments are a 0.35% of the fund in Pintrest Series E and 0.14% of the fund in Uber Series D
Growth ($43B total) - about 1.7% or $740M...largest investments are in a 0.36% of the fund in Uber Series D and 0.2% of the fund in YourPeople Series C
OTC ($13B total) - about 2.1% or $280M...largest are a 0.56% in Uber Series D (that really got spread around) and 0.27% in AppNexus Series E
So we're talking about small concentrations here. All of these funds hold more of each of Apple, Facebook, Google, and Amazon than their entire VC portfolios.
So the argument that you need to invest here to get returns doesn't really seem necessarily true. Let's set aside the fact that these investments are in later rounds than average, which means there isn't as high a ceiling on some of these valuations. Let's assume the Fidelity VC portfolio in aggregate generates an average return (which is giving the Fidelity VC and mutual fund teams the benefit of the doubt and assuming they're as good as the average dedicated VC investor).
The average return on a VC portfolio over ten years is ~8%. So if we assume an 8% growth rate on the VC portfolio in those Fidelity funds, their collective $2.3B in investments will be worth $4.7B in ten years. That's essentially doubling your investment...and it moves the aggregate value of the overall Fidelity portfolio a little more than 1%. That's it.
These are for funds who average 12-13% returns over their lives, so I can't imagine these returns would really cut it (especially because I think we're dramatically overstating the potential gains).
Well, if it's not returns, is it just to ensure access? I saw a recent stat that the average time for a startup until its IPO has moved to 11 years. That's a long time. So there's a thought that if you aren't investing in these startups now, you're going to have a tougher time getting access to the stock when it goes public - if it even goes public at all.
I suppose you could make that point - but is it really so tough for these major institutional investors to get allocations when these stocks come up? I have zero banking background - so I honestly don't know.
My thought, is that its more a question of optics than returns. Differentiating your mutual fund from many others is difficult, and with increasing interest in low-cost index funds or ETFs - mutual funds need to push the envelope further and further to demonstrate their value add. (I'm asserting the point about inflows into low-cost mutual fund alternatives, I don't have the data, but I believe I've seen evidence of that). What's a great way to demonstrate the benefits of active management? How about including private company investments that index funds or smaller mutual fund companies literally CANNOT invest in??? Let's see Vanguard try to do that one.
It's a small investment for the Fidelity's of the world, like I said, it's ~1% of the portfolio. If it blows up, it's a blip on the radar. But for an investor making the marginal decision about which growth-targeted funds to invest in, the fact that you've got Pintrest in the portfolio might be enough to sway the decision.
Of course, what that means for the rest of the VC community (probably bad) and startups (probably great) has yet to be seen.
More frequently, it's not your typical VC firm, but a more traditional investment firm - one that you'd expect to see advertising on the Sunday morning news shows, not being mentioned in TechCrunch.
There have been articles on the trend - but I was particularly interested in Fidelity - who I think is doing it the most. I feel like every other day I read about Fidelity putting another bunch of capital into the later round of a 'unicorn'.
Crunchbase confirms that if they aren't the biggest recent VC investor, they've got to be pretty darn close.
June 28 - AirBnB -$1.5B round
June 25 - WeWork - $400M Series E
June 10 - PaxLabs - $47M Series C
June 9 - Blue Apron - $135M Series D
May 29 - Snapchat - $338M Series E
May 8 - Pintrest - $186M Series G
Now those totals are the whole round, not Fidelity's specific commitments, but that seems like a LOT of deals in a very short time span.
And I've been trying to wrap my mind around how/why they are putting out so much money so fast, in seemingly every big deal that gets announced.
The first argument would be that they're investing to generate a return. OK sure, but is that really possible?
I decided to do a little digging. One of the things that makes tracking Fidelity's VC investments difficult is that they operate so many different funds. When Fidelity announces an investment - it's not always in the same mutual fund bucket (which to me raises an interesting question as to how they allocate deals, but that's another subject altogether). I saw a reference to three primary funds for VC investments - the Contrafund, the Growth Company Fund, and the OTC Fund.
So I pulled all those funds most recent Holdings reports - which list all their investments as of May (so I missed out on some of the more recent deals).
I did a rough filter to try and ascertain how much VC exposure each of the funds had:
Contrafund ($112B total) - about 1.1% or $1.2B...largest investments are a 0.35% of the fund in Pintrest Series E and 0.14% of the fund in Uber Series D
Growth ($43B total) - about 1.7% or $740M...largest investments are in a 0.36% of the fund in Uber Series D and 0.2% of the fund in YourPeople Series C
OTC ($13B total) - about 2.1% or $280M...largest are a 0.56% in Uber Series D (that really got spread around) and 0.27% in AppNexus Series E
So we're talking about small concentrations here. All of these funds hold more of each of Apple, Facebook, Google, and Amazon than their entire VC portfolios.
So the argument that you need to invest here to get returns doesn't really seem necessarily true. Let's set aside the fact that these investments are in later rounds than average, which means there isn't as high a ceiling on some of these valuations. Let's assume the Fidelity VC portfolio in aggregate generates an average return (which is giving the Fidelity VC and mutual fund teams the benefit of the doubt and assuming they're as good as the average dedicated VC investor).
The average return on a VC portfolio over ten years is ~8%. So if we assume an 8% growth rate on the VC portfolio in those Fidelity funds, their collective $2.3B in investments will be worth $4.7B in ten years. That's essentially doubling your investment...and it moves the aggregate value of the overall Fidelity portfolio a little more than 1%. That's it.
These are for funds who average 12-13% returns over their lives, so I can't imagine these returns would really cut it (especially because I think we're dramatically overstating the potential gains).
Well, if it's not returns, is it just to ensure access? I saw a recent stat that the average time for a startup until its IPO has moved to 11 years. That's a long time. So there's a thought that if you aren't investing in these startups now, you're going to have a tougher time getting access to the stock when it goes public - if it even goes public at all.
I suppose you could make that point - but is it really so tough for these major institutional investors to get allocations when these stocks come up? I have zero banking background - so I honestly don't know.
My thought, is that its more a question of optics than returns. Differentiating your mutual fund from many others is difficult, and with increasing interest in low-cost index funds or ETFs - mutual funds need to push the envelope further and further to demonstrate their value add. (I'm asserting the point about inflows into low-cost mutual fund alternatives, I don't have the data, but I believe I've seen evidence of that). What's a great way to demonstrate the benefits of active management? How about including private company investments that index funds or smaller mutual fund companies literally CANNOT invest in??? Let's see Vanguard try to do that one.
It's a small investment for the Fidelity's of the world, like I said, it's ~1% of the portfolio. If it blows up, it's a blip on the radar. But for an investor making the marginal decision about which growth-targeted funds to invest in, the fact that you've got Pintrest in the portfolio might be enough to sway the decision.
Of course, what that means for the rest of the VC community (probably bad) and startups (probably great) has yet to be seen.
Monday, June 15, 2015
Things I Hope My Daughter Never Has to Do
Not going to lie - it's definitely a little weird to have a kid. Not weird in terms of what you have to do (dirty diapers are many things, but they aren't weird), but it's weird to have to be responsible for something. Like a houseplant, only you'll go to jail if you don't water it (and your wife will be PISSED).
But it's not all that complicated to take care of a baby - they don't have too many demands. So when you're sitting there feeding your infant daughter a bottle and she's happy - you get some time to think about random stuff.
So I started to wonder, what's going to be really different for my daughter when she gets to be an adult. She's six months old now, so in the next 17.5 years, how are things going to change?
On its face - its an absurd question. When I was born, I'm sure if you asked my parents what things would be like around the new century - they'd have no way of knowing even half of the things that I got to take advantage of. They definitely wouldn't have predicted cell phones or the internet - if they had, they'd be billionaires. So yeah, this exercise is laughably futile...but I did want to think of some things that might impact her life in a few years. And it's exciting to think about all the awesome things that I'd like and realize we might go WAY past that. (of course there's also the zombie apocalypse scenario, but let's set that aside)
Things I think my daughter won't have to deal with in 2032 (I'm going to be embarrassed if I have to read this in 2032)
- No cursive handwriting: This isn't that big a deal, but all that time in elementary school learning script, I'm guessing that'll go away considering no one really uses it anymore. Maybe schools don't even teach it now. The only thing I've had to write in cursive since I learned it was my signature, and that's already going away.
- No channel surfing: As a kid, I'll always remember turning on the TV, rotating through every single channel to find something to watch, then not finding anything, and going to a different TV in the house to see if that one had anything different. Kids today have no concept of this. Not only are there dynamic channel guides, but now you're really not beholden to any kind of TV schedule. Whatever you want, you can get through either VOD or services like Netflix. I don't think my daughter will ever know the experience of turning on the TV without a plan of what she's going to watch.
- No paying with cash: This should be a no-brainer. I'm already 90% of the way there in terms of getting rid of cash as a payment vehicle, and as cell phone payments get even more ubiquitous - cash is going to vanish except for stuff you want to keep hidden. So except for my daughter's illegal arms deals, I'm guessing she won't handle cash.
- No waiting in line: This one is a bit more ambitious, but I feel like by the time we hit 2032, we as a society should be way beyond waiting in lines. Grocery stores, drug stores, to the degree that these things still exist - we should be completely beyond waiting in line to pay for things. Sure, there's a chance that there will be some super advancements in RFID-like technology that enables you to just pick stuff up in stores and walk out with it, but I'm also betting that retailers will find ways to remove the human requirement from checking out at a front counter - you might just do it yourself, and so you won't need to wait for anyone to help you. (maybe this is more my fantasy than a real guess for the future)
- No driving a car: This is a big one, and one I'm desperately hoping our legal industry doesn't bury in 500 tons of lawsuits. It would be amazing if my daughter never had to learn how to drive a car. I'd probably still teach her (see aforementioned zombie scenario), but fully automated cars would be such an amazing life change for her, I really hope it comes to fruition. Automated cars would allow people to live without owning a car and allow cities to dump things like parking infrastructure and remove tons of traffic congestion (because your average driver is an idiot, and half of all drivers are bigger idiots than the average one). When I think about her future, I'm super excited about this one.
- Always-on connectivity: The ability to never ever ever ever be out of contact via cell phone. No gaps in coverage. No bad reception. Constant GPS tracking....Alright, so this one is mostly still for me.
The best part of even thinking about this is that I'm sure I'm not even scratching the surface of what's to come. Maybe there'll even be something to stave off the zombie apocalypse, I can certainly dream about that.
But it's not all that complicated to take care of a baby - they don't have too many demands. So when you're sitting there feeding your infant daughter a bottle and she's happy - you get some time to think about random stuff.
So I started to wonder, what's going to be really different for my daughter when she gets to be an adult. She's six months old now, so in the next 17.5 years, how are things going to change?
On its face - its an absurd question. When I was born, I'm sure if you asked my parents what things would be like around the new century - they'd have no way of knowing even half of the things that I got to take advantage of. They definitely wouldn't have predicted cell phones or the internet - if they had, they'd be billionaires. So yeah, this exercise is laughably futile...but I did want to think of some things that might impact her life in a few years. And it's exciting to think about all the awesome things that I'd like and realize we might go WAY past that. (of course there's also the zombie apocalypse scenario, but let's set that aside)
Things I think my daughter won't have to deal with in 2032 (I'm going to be embarrassed if I have to read this in 2032)
- No cursive handwriting: This isn't that big a deal, but all that time in elementary school learning script, I'm guessing that'll go away considering no one really uses it anymore. Maybe schools don't even teach it now. The only thing I've had to write in cursive since I learned it was my signature, and that's already going away.
- No channel surfing: As a kid, I'll always remember turning on the TV, rotating through every single channel to find something to watch, then not finding anything, and going to a different TV in the house to see if that one had anything different. Kids today have no concept of this. Not only are there dynamic channel guides, but now you're really not beholden to any kind of TV schedule. Whatever you want, you can get through either VOD or services like Netflix. I don't think my daughter will ever know the experience of turning on the TV without a plan of what she's going to watch.
- No paying with cash: This should be a no-brainer. I'm already 90% of the way there in terms of getting rid of cash as a payment vehicle, and as cell phone payments get even more ubiquitous - cash is going to vanish except for stuff you want to keep hidden. So except for my daughter's illegal arms deals, I'm guessing she won't handle cash.
- No waiting in line: This one is a bit more ambitious, but I feel like by the time we hit 2032, we as a society should be way beyond waiting in lines. Grocery stores, drug stores, to the degree that these things still exist - we should be completely beyond waiting in line to pay for things. Sure, there's a chance that there will be some super advancements in RFID-like technology that enables you to just pick stuff up in stores and walk out with it, but I'm also betting that retailers will find ways to remove the human requirement from checking out at a front counter - you might just do it yourself, and so you won't need to wait for anyone to help you. (maybe this is more my fantasy than a real guess for the future)
- No driving a car: This is a big one, and one I'm desperately hoping our legal industry doesn't bury in 500 tons of lawsuits. It would be amazing if my daughter never had to learn how to drive a car. I'd probably still teach her (see aforementioned zombie scenario), but fully automated cars would be such an amazing life change for her, I really hope it comes to fruition. Automated cars would allow people to live without owning a car and allow cities to dump things like parking infrastructure and remove tons of traffic congestion (because your average driver is an idiot, and half of all drivers are bigger idiots than the average one). When I think about her future, I'm super excited about this one.
- Always-on connectivity: The ability to never ever ever ever be out of contact via cell phone. No gaps in coverage. No bad reception. Constant GPS tracking....Alright, so this one is mostly still for me.
The best part of even thinking about this is that I'm sure I'm not even scratching the surface of what's to come. Maybe there'll even be something to stave off the zombie apocalypse, I can certainly dream about that.
Friday, April 17, 2015
Stop asking for cable TV unbundling
Every now and again, usually around some FCC hearing or cable system merger - I see a lot of articles or statements highlighting the fact that consumers should be able to pick and choose which channels they get through their cable providers.
Today, you don't have much choice in who your TV provider might be (because cable companies have area monopolies, and there are only a few satellite/phone company providers of video service), and within those choices you don't have a ton of flexibility as to what channels you can get.
Every provider will have a basic package (which is almost nothing), and a couple tiers of preferred packages that include all the channels you want and many that you don't.
Some consumers argue that this is unfair, and that they shouldn't be forced to buy a bundle of 50 channels when they only want a few. So these customers argue that unbundling will be good for them - because then they can pick and choose what to buy.
Unfortunately, for most consumers, this is dumb. It's dumb because consumers think this will lead to them paying less for cable - when I think it's the exact opposite that's the case.
While I don't doubt that there are some consumers out there who only watch one or two cable channels - I think the vast majority of subscribers casually watch a lot more TV networks than they think they do (surveys say consumers watch about 17 channels, but this is likely self-reported and I would guess, pretty low).
So these customers - to get the same experience they get today, would have to buy more channels than they expect.
In addition, cable companies would absolutely charge more for the channels everyone wants. It seems like there's this notion out there that once you unbundle TV packages cable companies are all of a sudden say, 'well - we'll just have to accept the fact that we'll make less money, because there's no way we can figure out how to price these channels'.
They'd figure it out. Hell, they've probably already done the analysis to figure out what they'd do to extract as much revenue as possible from an unbundled scenario.
I think you'd end up paying the same, only instead of 180+ channels (the current average), you'd only have ~20.
I think there's a very small subset of folks who actually watch almost nothing on TV - they might save some money. But for everyone else, they'd be far worse off.
The reason why this even came up today was that Verizon announced some bundling options that are closer to an unbundled world, and guess what, I think they'd make customers worse off while paying about the same as they do today.
Verizon would offer you a set of basic channels, including:
Local affiliates
Telemundo/Univision
AMC (at least you get Walking Dead)
Bloomberg
CNN
Food Network
HGTV
HSN
Hallmark
QVC
and some others
That's not exactly a murderer's row. Especially when you consider you can get your local feeds with an antenna for free.
But you also get two 'channel packs' with that. Each channel pack is basically a category pack. These include:
Lifestyle (e.g., Bravo, TLC, History)
Entertainment (e.g., TNT, TBS, USA, FX)
News/Info (e.g., Fox, MSNBC, CNBC)
Pop Culture (E!, MTV, Comedy Central)
Kids (e.g., Nickelodeon, Disney)
Sports (e.g., ESPN, Big Ten)
Sports PLUS (e.g., Regional Sports Network - so local teams, NFL Network)
The entry price for this unbundled option giving you more 'choice' of two channel packs - is $55 a month. Oh, and if you want the Sports Plus, you have to take the Sports and Sports Plus packs as your two choices (so god help you if you like sports AND have kids or an interest in News or anything else). Oh, and these prices probably don't include HD fees, and I'm sure it probably doesn't include DVR fees either.
If you want FOUR channel packs - again, without HD or DVR, it costs $75 a month.
So for $75 a month, you'll get about 80 channels. But today you probably pay around $75 a month for cable and get 180+ channels.
But now you get to choose! So it's good? Or something.
Long story short - people need to stop positioning 'unbundling' as a win for consumers. It's a win for a very select set of consumers - those that watch very little TV, but enough to want cable at some minimal level.
I'd love to actually meet one of these people - but frankly I doubt they really exist in any big magnitude.
What unbundling will do - is allow the cable companies to better price discriminate, and make more money off big consumers, while offering a minimal solution to hold onto cord-cutters.
But we all get to choose our channels - so I guess freedom from tyranny yay?
Today, you don't have much choice in who your TV provider might be (because cable companies have area monopolies, and there are only a few satellite/phone company providers of video service), and within those choices you don't have a ton of flexibility as to what channels you can get.
Every provider will have a basic package (which is almost nothing), and a couple tiers of preferred packages that include all the channels you want and many that you don't.
Some consumers argue that this is unfair, and that they shouldn't be forced to buy a bundle of 50 channels when they only want a few. So these customers argue that unbundling will be good for them - because then they can pick and choose what to buy.
Unfortunately, for most consumers, this is dumb. It's dumb because consumers think this will lead to them paying less for cable - when I think it's the exact opposite that's the case.
While I don't doubt that there are some consumers out there who only watch one or two cable channels - I think the vast majority of subscribers casually watch a lot more TV networks than they think they do (surveys say consumers watch about 17 channels, but this is likely self-reported and I would guess, pretty low).
So these customers - to get the same experience they get today, would have to buy more channels than they expect.
In addition, cable companies would absolutely charge more for the channels everyone wants. It seems like there's this notion out there that once you unbundle TV packages cable companies are all of a sudden say, 'well - we'll just have to accept the fact that we'll make less money, because there's no way we can figure out how to price these channels'.
They'd figure it out. Hell, they've probably already done the analysis to figure out what they'd do to extract as much revenue as possible from an unbundled scenario.
I think you'd end up paying the same, only instead of 180+ channels (the current average), you'd only have ~20.
I think there's a very small subset of folks who actually watch almost nothing on TV - they might save some money. But for everyone else, they'd be far worse off.
The reason why this even came up today was that Verizon announced some bundling options that are closer to an unbundled world, and guess what, I think they'd make customers worse off while paying about the same as they do today.
Verizon would offer you a set of basic channels, including:
Local affiliates
Telemundo/Univision
AMC (at least you get Walking Dead)
Bloomberg
CNN
Food Network
HGTV
HSN
Hallmark
QVC
and some others
That's not exactly a murderer's row. Especially when you consider you can get your local feeds with an antenna for free.
But you also get two 'channel packs' with that. Each channel pack is basically a category pack. These include:
Lifestyle (e.g., Bravo, TLC, History)
Entertainment (e.g., TNT, TBS, USA, FX)
News/Info (e.g., Fox, MSNBC, CNBC)
Pop Culture (E!, MTV, Comedy Central)
Kids (e.g., Nickelodeon, Disney)
Sports (e.g., ESPN, Big Ten)
Sports PLUS (e.g., Regional Sports Network - so local teams, NFL Network)
The entry price for this unbundled option giving you more 'choice' of two channel packs - is $55 a month. Oh, and if you want the Sports Plus, you have to take the Sports and Sports Plus packs as your two choices (so god help you if you like sports AND have kids or an interest in News or anything else). Oh, and these prices probably don't include HD fees, and I'm sure it probably doesn't include DVR fees either.
If you want FOUR channel packs - again, without HD or DVR, it costs $75 a month.
So for $75 a month, you'll get about 80 channels. But today you probably pay around $75 a month for cable and get 180+ channels.
But now you get to choose! So it's good? Or something.
Long story short - people need to stop positioning 'unbundling' as a win for consumers. It's a win for a very select set of consumers - those that watch very little TV, but enough to want cable at some minimal level.
I'd love to actually meet one of these people - but frankly I doubt they really exist in any big magnitude.
What unbundling will do - is allow the cable companies to better price discriminate, and make more money off big consumers, while offering a minimal solution to hold onto cord-cutters.
But we all get to choose our channels - so I guess freedom from tyranny yay?
Thursday, April 2, 2015
Tech Bubble 2: Valuation Boogaloo
There's so much media attention on a technology boom. Maybe it's because I read Business Insider, but the amount of focus and VC investment in technology companies seems like we've passed over into 'Ludicrous Speed'
I checked some numbers real quick and there was over $48 billion invested in VC deals in 2014. That's a 61% increase in dollars from the previous year, with only a 4% increase in number of transactions.
So there aren't that many more companies raising money, there are mostly companies raising much MORE money than previously. These are headlined by your 'Unicorn' startups, a term that's emerged for companies with over $1 billion dollar valuations. Companies like Uber, which continuously raise tons of capital and increasing valuations to fund more and more growth.
But at some point the music stops, no? Many of the companies that raise increasing amounts of funding aren't profitable, and while they appear to have better business models than the startups of the first dot-com bubble, it's unclear whether many of these business are truly sustainable without increasing valuations and more VC dollars.
The companies are aided by the fact that it's pretty freaking hard to find good returns these days, with extremely low interest rates and an increasingly generalized consensus that equities are highly priced. That means there's lots of investors looking to put dollars to work and try and get big returns. I'll come back to that in a second.
It also concerns me when I read articles like this one
...more elite college graduates and MBAs are foregoing pinstripes and moving West.
Only 10% of MIT undergraduates went into finance last year, according to a recent New York Times article — a startlingly drop from the 31% who took Wall Street jobs in 2006. "Software companies, meanwhile, hired 28% of graduates in 2014, compared with 10% in 2006," it reports.
Similarly, in 2014 San Francisco and the Bay Area drew slightly more Harvard Business School graduates than New York.
Now I'm no advocate for banking jobs as the one and true calling - but if there's one thing I feel pretty comfortable in, it's that when you see MBAs crowding into an industry, it's time to get the hell out (and I feel comfortable saying this as a member of the club).
I've read a couple other pieces of news, and had some more conversations, with people at buzz-worthy startups, and frankly, what they are saying terrifies me.
They basically say that it's extremely easy to get money. People are offering them dollars with almost no questions asked, just trying to get into a deal. It makes it all the easier to see why valuations keep climbing if that's the environment we're living in.
But as valuations get higher and higher - one thing I'm really struggling with is what the hell are the exit opportunities? Once valuation reaches a certain degree - corporate acquisition from a strategic buyer becomes a tougher option. So an IPO then? There haven't been that many that have gone that route - and going there requires much more financial transparency and disclosure than these companies are used to. I don't know what the answer will be for these companies, but as long as valuations keep going up and the money is easy, I'm not sure anyone is asking.
Then I read this today
Silicon Valley insiders are taking advantage of soaring values for technology startups by creating a potentially lucrative side business.
Venture-capital firms such as Andreessen Horowitz and FirstMark Capital, along with a cast of prominent entrepreneurs and executives, have each raised tens of millions of dollars for impromptu funds that take a direct stake in a single startup.
These funds, which often come together in a matter of days, give institutional investors, friends and business associates exclusive access to highflying companies. The funds also let the venture capitalists invest far more money in a company than they otherwise could. In many cases, the funds are blessed by the startups, which see them as a way to raise big sums quickly.
If you don't want to read the article - I'll summarize. VCs are creating side vehicles to their funds to raise additional capital for specific startups. Their existing funds are too small for such increasing valuations - so they go to existing LPs or other investors directly - to raise capital for a company they've already put money behind. For potential investors - there's very little information shared about the startup, and they still have to pay similar carried interest to the VC (even though the work of sourcing the deal was already done). And investors are literally throwing money at these vehicles.
It boils down to the chance to 'get in' at a super-high valuation startup, with no real data on company performance, and a similarly rich VC fee structure - and the things are oversubscribed in a matter of hours.
Stop this thing, I want to get off.
Tuesday, March 24, 2015
Hard Knocks Odds 2015
Last year - I went through an exercise of predicting which NFL team would be HBO's participant for the upcoming season of Hard Knocks.
And then the Atlanta Falcons blew it all up by volunteering for the job.
So, proving that I don't learn lessons well - I'm going back to the well to go on record before its officially decided.
The NFL must like Hard Knocks, but NFL coaches and management staff do NOT like Hard Knocks. Whether it's about revealing trade secrets or just trying to avoid looking like a doofus, teams don't exactly line up to go under a microscope (Atlanta being a recent exception).
But the NFL can compel teams to participate, except for a few conditions which if they apply, allows a team to remove themselves from consideration:
1. If the team has made the playoffs in either of the prior two years
2. If the team has hired a new head coach
3. If the team has appeared on Hard Knocks in any of the last ten years
ProFootballTalk identified the teams that do not meet any of these criteria: the Browns, Texans, Titans, Jaguars, Washington, Giants, Vikings, Buccaneers, and Rams.
Recently rumors swirled that the Browns were the front-runners, but today they've made it known that they do not want the 'honor'
Of course, the NFL can force them to participate, but let's assume for a minute that the NFL doesn't want to force the show on Cleveland (too bad, it would be interesting). Among the eight remaining teams, who would be most likely?
8. Washington - With all the issues around their team name, their ownership, and their QB-coach potential feud - I'm going to go ahead and assume the NFL doesn't want these guys front and center
7. Minnesota Vikings - Adrian Peterson child abuse/suspension means these guys are also EXTREMELY unlikely. Although the team is actually pretty interesting and has some compelling talent, I don't think you get past the elephant in the room
6. NY Giants - I suspect Tom Coughlin would rather slit his wrists, and the Mara family is pretty tight with the commissioner, so I doubt it.
5. St. Louis Rams - The owner seems to want to get the hell out of St. Louis, creating a lot of drama and uncertainty over the team's future. I don't know if that's the type of thing that would make their participation less likely (why would the NFL provoke them) or more likely (as a 'punishment' for maverick behavior). I'm assuming the NFL would avoid it altogether and just not enlist the Rams.
Tie:
3. Tampa Bay Buccaneers/Tennessee Titans: I think these guys are tied. They have the top 2 picks in this years' draft, which makes for a pre-made storyline. But both teams haven't been competitive in a while, and I think that hurts them here. They aren't really major forces in the NFL's public consciousness. And when's the last time a team with such a bad record was on Hard Knocks?
2. Jacksonville Jaguars - What was that I said about not being a part of the NFL's public consciousness? Jacksonville is pretty much as minimal an impact as you can get. But I still think they're an intriguing option because I think their ownership might actually be interested. The NFL's foremost ambassador to London is obviously willing to do favors for the league (or take money to do it, whatever). They have to be considered a strong contender.
1. Houston Texans - These guys would be pretty close to perfect across all the candidates we have to choose from. Start with the most obvious - JJ Watt. Not only is he a huge star - but he's also actually got a personality and seems genuinely funny. He doesn't need any more publicity, but the show would be his star vehicle and lay the groundwork for his eventual transition to studio show personality. He'd be amazing to watch. You also have a good injury redemption storyline in Clowney, a coach in Bill O'Brien who's very comfortable in a media swirl (see Penn State), and other interesting personalities like Arian Foster.
Of all the teams to choose from, the Texans would be my pick - and in my estimation, they should be considered front-runners until evidence suggests otherwise.
And then the Atlanta Falcons blew it all up by volunteering for the job.
So, proving that I don't learn lessons well - I'm going back to the well to go on record before its officially decided.
The NFL must like Hard Knocks, but NFL coaches and management staff do NOT like Hard Knocks. Whether it's about revealing trade secrets or just trying to avoid looking like a doofus, teams don't exactly line up to go under a microscope (Atlanta being a recent exception).
But the NFL can compel teams to participate, except for a few conditions which if they apply, allows a team to remove themselves from consideration:
1. If the team has made the playoffs in either of the prior two years
2. If the team has hired a new head coach
3. If the team has appeared on Hard Knocks in any of the last ten years
ProFootballTalk identified the teams that do not meet any of these criteria: the Browns, Texans, Titans, Jaguars, Washington, Giants, Vikings, Buccaneers, and Rams.
Recently rumors swirled that the Browns were the front-runners, but today they've made it known that they do not want the 'honor'
Of course, the NFL can force them to participate, but let's assume for a minute that the NFL doesn't want to force the show on Cleveland (too bad, it would be interesting). Among the eight remaining teams, who would be most likely?
8. Washington - With all the issues around their team name, their ownership, and their QB-coach potential feud - I'm going to go ahead and assume the NFL doesn't want these guys front and center
7. Minnesota Vikings - Adrian Peterson child abuse/suspension means these guys are also EXTREMELY unlikely. Although the team is actually pretty interesting and has some compelling talent, I don't think you get past the elephant in the room
6. NY Giants - I suspect Tom Coughlin would rather slit his wrists, and the Mara family is pretty tight with the commissioner, so I doubt it.
5. St. Louis Rams - The owner seems to want to get the hell out of St. Louis, creating a lot of drama and uncertainty over the team's future. I don't know if that's the type of thing that would make their participation less likely (why would the NFL provoke them) or more likely (as a 'punishment' for maverick behavior). I'm assuming the NFL would avoid it altogether and just not enlist the Rams.
Tie:
3. Tampa Bay Buccaneers/Tennessee Titans: I think these guys are tied. They have the top 2 picks in this years' draft, which makes for a pre-made storyline. But both teams haven't been competitive in a while, and I think that hurts them here. They aren't really major forces in the NFL's public consciousness. And when's the last time a team with such a bad record was on Hard Knocks?
2. Jacksonville Jaguars - What was that I said about not being a part of the NFL's public consciousness? Jacksonville is pretty much as minimal an impact as you can get. But I still think they're an intriguing option because I think their ownership might actually be interested. The NFL's foremost ambassador to London is obviously willing to do favors for the league (or take money to do it, whatever). They have to be considered a strong contender.
1. Houston Texans - These guys would be pretty close to perfect across all the candidates we have to choose from. Start with the most obvious - JJ Watt. Not only is he a huge star - but he's also actually got a personality and seems genuinely funny. He doesn't need any more publicity, but the show would be his star vehicle and lay the groundwork for his eventual transition to studio show personality. He'd be amazing to watch. You also have a good injury redemption storyline in Clowney, a coach in Bill O'Brien who's very comfortable in a media swirl (see Penn State), and other interesting personalities like Arian Foster.
Of all the teams to choose from, the Texans would be my pick - and in my estimation, they should be considered front-runners until evidence suggests otherwise.
Tuesday, March 17, 2015
Nintendo Games for Smartphones!
If you follow me on Twitter - you'd know that every now and again I wonder why Nintendo refuses to port their games for iPhone and release them to generations of now-adults who played them as kids.
Every few months I would think about a fun Nintendo game I used to be obsessed with and wonder why I couldn't buy it for my phone.
It was never the technology - I'm pretty sure smartphones have way more sophisticated hardware than my old 8-bit NES system.
And it was never willingness to pay - I have at least a little discretionary income
And it was never because there were better options out there - Most of the super addictive iPhone games out there still can't hold a candle to the greatness of some of the best NES games.
But every time I would wonder, then I would look it up, and would read another recent statement from a Nintendo executive about how they refuse to release their games on smartphones.
The execs would invariably toe the same party line - moving to a smartphone platform would damage them in unspeakable and unrecoverable ways. Nintendo is a console company after all.
I would read those statement, pretty dumbfounded. It was like the entire organization put its collective head up its collective ass.
But finally, it appears, some semblance of logic and rationality has prevailed:
"Until now, Nintendo had refused to bring its games to platforms outside its own consoles. On Tuesday, it announced a partnership with a Japanese mobile gaming company called DeNA to start developing new smartphone and tablet games featuring Nintendo characters."
Finally, they're at least acknowledging that there may be a future in these smart-phone things.
I get that Nintendo wants to keep its core business focused around building/selling new consoles and games for those consoles. I get it, that's their history. But unfortunately for Nintendo traditionalists, that's not what their customers want.
Nintendo has never been great at making the most hardcore gaming systems out there - the ones that allow for hyper-realistic action sequences and zombie head-busting gore. Nintendo has been great at making games that are approachable and enjoyable (i.e., your mom and your kids can play).
Well - to me the future of those games is NOT married to a console, it's on a tablet or a phone. And that should be pretty obvious to anyone with a mom or with kids.
But Nintendo resisted that vision and held fast to an outdated view of what their business could be. This also leaves out the huge potential revenue stream of their back catalog. Nintendo released tons of great games in the 80's (just as my mom, they're all in the attic), but no one is buying new NES consoles or cartridges these days. And refusing to put them on smartphones is equivalent of the Beatles not allowing digital album sales because their music was meant to be heard on a record player.
However, as I said, logic has finally prevailed...and what was the response from the investment community?
A 30% increase in the stock price.
It's amazing, I'm hard-pressed to think of another corporation who has committed such malpractice by NOT pursuing such a no-brainer business line (the one exception is probably Chick-Fil-A and the whole Sunday thing, but at least theirs has some more reasonable logic). I feel like if Nintendo had been American, they'd have been under siege by activists for the way they've been behaving.
But at least they're making progress, and although technically the announcement states they'll only make NEW games with their characters (not re-release old ones), once the flood gates have opened, I have to imagine they'll choose to accept my (and millions of others) money.
Every few months I would think about a fun Nintendo game I used to be obsessed with and wonder why I couldn't buy it for my phone.
It was never the technology - I'm pretty sure smartphones have way more sophisticated hardware than my old 8-bit NES system.
And it was never willingness to pay - I have at least a little discretionary income
And it was never because there were better options out there - Most of the super addictive iPhone games out there still can't hold a candle to the greatness of some of the best NES games.
But every time I would wonder, then I would look it up, and would read another recent statement from a Nintendo executive about how they refuse to release their games on smartphones.
The execs would invariably toe the same party line - moving to a smartphone platform would damage them in unspeakable and unrecoverable ways. Nintendo is a console company after all.
I would read those statement, pretty dumbfounded. It was like the entire organization put its collective head up its collective ass.
But finally, it appears, some semblance of logic and rationality has prevailed:
"Until now, Nintendo had refused to bring its games to platforms outside its own consoles. On Tuesday, it announced a partnership with a Japanese mobile gaming company called DeNA to start developing new smartphone and tablet games featuring Nintendo characters."
Finally, they're at least acknowledging that there may be a future in these smart-phone things.
I get that Nintendo wants to keep its core business focused around building/selling new consoles and games for those consoles. I get it, that's their history. But unfortunately for Nintendo traditionalists, that's not what their customers want.
Nintendo has never been great at making the most hardcore gaming systems out there - the ones that allow for hyper-realistic action sequences and zombie head-busting gore. Nintendo has been great at making games that are approachable and enjoyable (i.e., your mom and your kids can play).
Well - to me the future of those games is NOT married to a console, it's on a tablet or a phone. And that should be pretty obvious to anyone with a mom or with kids.
But Nintendo resisted that vision and held fast to an outdated view of what their business could be. This also leaves out the huge potential revenue stream of their back catalog. Nintendo released tons of great games in the 80's (just as my mom, they're all in the attic), but no one is buying new NES consoles or cartridges these days. And refusing to put them on smartphones is equivalent of the Beatles not allowing digital album sales because their music was meant to be heard on a record player.
However, as I said, logic has finally prevailed...and what was the response from the investment community?
A 30% increase in the stock price.
It's amazing, I'm hard-pressed to think of another corporation who has committed such malpractice by NOT pursuing such a no-brainer business line (the one exception is probably Chick-Fil-A and the whole Sunday thing, but at least theirs has some more reasonable logic). I feel like if Nintendo had been American, they'd have been under siege by activists for the way they've been behaving.
But at least they're making progress, and although technically the announcement states they'll only make NEW games with their characters (not re-release old ones), once the flood gates have opened, I have to imagine they'll choose to accept my (and millions of others) money.
Friday, March 6, 2015
History of Spreadsheets
I came across a fantastic article today - detailing the backstory and history of the spreadsheet.
It's an article from an 1984 issue of Harper's and was reprinted on Medium - and it's ridiculously interesting on a couple different levels.
1 - It's completely insane to imagine a world without spreadsheets. From my first internship (which I got because I told my future boss that I knew all about VLOOKUPs, although I'd never heard of them), to the slightly more complex models I built as a consultant - the spreadsheet is literally the most significant file format from my entire career (some consultants might argue for PowerPoint - but let's be honest, all the real work gets done in spreadsheets).
It's hard to imagine doing any of my jobs without spreadsheets, and even when my Dad would tell me about the days before the spreadsheet program, I couldn't believe him. He told me they did all these sheets BY HAND!!! And other much more experienced consultants used to tell me about the days of model building sessions that would take place on enormous sheets of paper.
The concept is so alien to me that even now it's hard to process. But the article really gives a great sense for not only what that was like but also how mind-blowing it was for the people actually impacted by the new tools (VisiCale, Lotus - which itself is amazing, this is all PRE-Excel).
"In the first days of electronic spreadsheets — that is, two or three years ago — those who used them got things done so quickly that, despite the evidence of finished reports, bosses and co-workers often had trouble believing the tasks had been completed. Gottheil told me of an accountant who got “a rush task, sat down with his micro and his spreadsheet, finished it in an hour or two, and left it on his desk for two days. Then he Fed Ex-ed it to the client and got all sorts of accolades for working overtime.”
What a complete mindblowing experience this must have been. And one that, were you in management, you'd have been completely unprepared for. I'm trying to think of a reasonable comparison in today's world that would be such an impact to my professional life and I can't really think of one (maybe if google's search engine could somehow become self-aware and anticipate what I would search for...shortly before it destroys all humans).
2 - What wasn't completely insane at all, what made a lot of sense actually, was the talk of people who become attached to their models. The real spreadsheet geeks.
Spreadsheet models have become a form of expression, and the very act of creating them seem to yield a pleasure unrelated to their utility. Unusual models are duplicated and passed around; these templates are sometimes used by other modelers and sometimes only admired for their elegance.
Guilty.
3 - The last element I thought was very interesting was how the author noted that spreadsheets allow you to model all kinds of permutations - but that they can also disconnect you from the real tangible business you're evaluating or working with. It seems a bit quaint to think of people feeling that way in the 1980's - because it's become increasingly turbo-charged.
And so it is that spreadsheets help in the drive for paper profits, and are a prime tool of takeover architects. An executive in a acquisition-hungry company might spend his time spreadsheeting in order to find a company ripe for takeover. If his spreadsheet projections were to produce a likely candidate- if the numbers looked good- he would naturally recommend making a takeover bid. Even a hostile takeover seems cut and dried, perfectly logical, in the world of spreadsheets.
Compare that to a hedge fund using derivatives or algorithmic trading - it's detachment on steroids relative to just some spreadsheets. It's particularly interesting to think about in the context of an offhand thought from the author:
The flexibility of spreadsheets can encourage other heartless moves from headquarters. It is no great drain on an executive’s time to experiment with all sorts of odd, even insidious. He might ask “What if we dropped our pension plan?” Then he might run his idea through a spreadsheet and find a huge gain in capital- and there would be an unthinkable, in hard figures.
You think any corporation views that as unthinkable in this day and age? What's telling about our business environment is that what the author refers to as 'unthinkable', now seems almost automatic.
It's an article from an 1984 issue of Harper's and was reprinted on Medium - and it's ridiculously interesting on a couple different levels.
1 - It's completely insane to imagine a world without spreadsheets. From my first internship (which I got because I told my future boss that I knew all about VLOOKUPs, although I'd never heard of them), to the slightly more complex models I built as a consultant - the spreadsheet is literally the most significant file format from my entire career (some consultants might argue for PowerPoint - but let's be honest, all the real work gets done in spreadsheets).
It's hard to imagine doing any of my jobs without spreadsheets, and even when my Dad would tell me about the days before the spreadsheet program, I couldn't believe him. He told me they did all these sheets BY HAND!!! And other much more experienced consultants used to tell me about the days of model building sessions that would take place on enormous sheets of paper.
The concept is so alien to me that even now it's hard to process. But the article really gives a great sense for not only what that was like but also how mind-blowing it was for the people actually impacted by the new tools (VisiCale, Lotus - which itself is amazing, this is all PRE-Excel).
"In the first days of electronic spreadsheets — that is, two or three years ago — those who used them got things done so quickly that, despite the evidence of finished reports, bosses and co-workers often had trouble believing the tasks had been completed. Gottheil told me of an accountant who got “a rush task, sat down with his micro and his spreadsheet, finished it in an hour or two, and left it on his desk for two days. Then he Fed Ex-ed it to the client and got all sorts of accolades for working overtime.”
What a complete mindblowing experience this must have been. And one that, were you in management, you'd have been completely unprepared for. I'm trying to think of a reasonable comparison in today's world that would be such an impact to my professional life and I can't really think of one (maybe if google's search engine could somehow become self-aware and anticipate what I would search for...shortly before it destroys all humans).
2 - What wasn't completely insane at all, what made a lot of sense actually, was the talk of people who become attached to their models. The real spreadsheet geeks.
Spreadsheet models have become a form of expression, and the very act of creating them seem to yield a pleasure unrelated to their utility. Unusual models are duplicated and passed around; these templates are sometimes used by other modelers and sometimes only admired for their elegance.
Guilty.
3 - The last element I thought was very interesting was how the author noted that spreadsheets allow you to model all kinds of permutations - but that they can also disconnect you from the real tangible business you're evaluating or working with. It seems a bit quaint to think of people feeling that way in the 1980's - because it's become increasingly turbo-charged.
And so it is that spreadsheets help in the drive for paper profits, and are a prime tool of takeover architects. An executive in a acquisition-hungry company might spend his time spreadsheeting in order to find a company ripe for takeover. If his spreadsheet projections were to produce a likely candidate- if the numbers looked good- he would naturally recommend making a takeover bid. Even a hostile takeover seems cut and dried, perfectly logical, in the world of spreadsheets.
Compare that to a hedge fund using derivatives or algorithmic trading - it's detachment on steroids relative to just some spreadsheets. It's particularly interesting to think about in the context of an offhand thought from the author:
The flexibility of spreadsheets can encourage other heartless moves from headquarters. It is no great drain on an executive’s time to experiment with all sorts of odd, even insidious. He might ask “What if we dropped our pension plan?” Then he might run his idea through a spreadsheet and find a huge gain in capital- and there would be an unthinkable, in hard figures.
You think any corporation views that as unthinkable in this day and age? What's telling about our business environment is that what the author refers to as 'unthinkable', now seems almost automatic.
Friday, February 13, 2015
Skill-based betting, coming to NJ
Very exciting news coming out of Atlantic City today...I know, normally that means there's a serial killer on the loose, but today it's for an entirely legitimate reason.
A casino there is finally opening the door to skill-based wagering...specifically, physical skill-based wagering.
Skill-based wagering is different from your standard casino games. Whereas those games are ones of mathematical certainty and based in no way on a player's ability (e.g., a roulette table where the fall of the ball is random), skill-based wagers come in games where the players can actually control the outcome.
Poker is the most popular example in casino gaming today, but what's interesting is a casino testing out a different, more physical, wagering opportunity:
Executives at The Borgata Hotel Casino & Spa told The Associated Press on Friday that they've gotten permission from New Jersey gambling regulators to host a basketball contest next month in which players shoot free throws for money.
"This is a first step, something we've never been able to do until now," said Joe Lupo, the casino's senior vice president. "A year from now, you'll probably see a lot more of these skill-based tournaments or even games on the casino floor."
That's right, free throw shooting contests for money!
Now it's not surprising to see an Atlantic City casino try some new angles to drum up business. Ever since other states realized they could get some quick cash by putting up casinos, and ever since people realized AC is a pit, the city has been bleeding gambling dollars like crazy.
So it's nice to see an experiment, especially one where players actually can control their outcome. Players mostly take each others money, and the casino gets a small rake for its trouble.
Now, while I love the idea of a free throw shooting contest for money, I'd never EVER actually pay to play in one. But I'd certainly watch it...and it got me thinking, what other games of physical skill could we put in casinos???
Skeeball - Yes, just rip the machines straight out of the boardwalk arcades down in Ocean City and haul them into the AC casinos. I would absolutely play against other people in Skeeball. The trick is to forget about the 100 point circles. Avoid their siren song at all costs! Just play nice and easy and bang out 50 point throws. Only downside of this is that my wife would routinely beat me.
Super Chexx Hockey - Again, if this could be played for real money, they'd eventually have to stage an intervention for me. An important caveat, the only true version of this game is the US vs. USSR edition. It's the only one where there feels like real geopolitical consequences. None of this Canada vs. US crap. Americans and Soviets is the only one to play.
Speed Pitch - I'm not sure this is actually a good idea, I'm just putting it out there for my friend who's a sports orthopedist. He could use a pool at his summer house.
There's a whole litany of carnival games which should also be included here. Ring toss, dart throw, milk bottle throw. You could put them all in the casino and have us compete against each other...which means you could finally stop rigging all the games! It would also be extremely easy to replace the shady carnies with shady dealers...it would just be a new shirt.
But they'd all be fun to bet money on. Finally, I've saved the best for last...
Tell me you wouldn't put $20 down on a best of three...tell me you wouldn't....if you say you wouldn't, you're a liar. I would play this in a casino...hell, I would pay to watch this in a casino.
Atlantic City, you've already gotten us started, just take it a little further. Please?
A casino there is finally opening the door to skill-based wagering...specifically, physical skill-based wagering.
Skill-based wagering is different from your standard casino games. Whereas those games are ones of mathematical certainty and based in no way on a player's ability (e.g., a roulette table where the fall of the ball is random), skill-based wagers come in games where the players can actually control the outcome.
Poker is the most popular example in casino gaming today, but what's interesting is a casino testing out a different, more physical, wagering opportunity:
Executives at The Borgata Hotel Casino & Spa told The Associated Press on Friday that they've gotten permission from New Jersey gambling regulators to host a basketball contest next month in which players shoot free throws for money.
"This is a first step, something we've never been able to do until now," said Joe Lupo, the casino's senior vice president. "A year from now, you'll probably see a lot more of these skill-based tournaments or even games on the casino floor."
That's right, free throw shooting contests for money!
Now it's not surprising to see an Atlantic City casino try some new angles to drum up business. Ever since other states realized they could get some quick cash by putting up casinos, and ever since people realized AC is a pit, the city has been bleeding gambling dollars like crazy.
So it's nice to see an experiment, especially one where players actually can control their outcome. Players mostly take each others money, and the casino gets a small rake for its trouble.
Now, while I love the idea of a free throw shooting contest for money, I'd never EVER actually pay to play in one. But I'd certainly watch it...and it got me thinking, what other games of physical skill could we put in casinos???
Skeeball - Yes, just rip the machines straight out of the boardwalk arcades down in Ocean City and haul them into the AC casinos. I would absolutely play against other people in Skeeball. The trick is to forget about the 100 point circles. Avoid their siren song at all costs! Just play nice and easy and bang out 50 point throws. Only downside of this is that my wife would routinely beat me.
Super Chexx Hockey - Again, if this could be played for real money, they'd eventually have to stage an intervention for me. An important caveat, the only true version of this game is the US vs. USSR edition. It's the only one where there feels like real geopolitical consequences. None of this Canada vs. US crap. Americans and Soviets is the only one to play.
Speed Pitch - I'm not sure this is actually a good idea, I'm just putting it out there for my friend who's a sports orthopedist. He could use a pool at his summer house.
There's a whole litany of carnival games which should also be included here. Ring toss, dart throw, milk bottle throw. You could put them all in the casino and have us compete against each other...which means you could finally stop rigging all the games! It would also be extremely easy to replace the shady carnies with shady dealers...it would just be a new shirt.
But they'd all be fun to bet money on. Finally, I've saved the best for last...
Tell me you wouldn't put $20 down on a best of three...tell me you wouldn't....if you say you wouldn't, you're a liar. I would play this in a casino...hell, I would pay to watch this in a casino.
Atlantic City, you've already gotten us started, just take it a little further. Please?
Thursday, February 12, 2015
Are NFL Teams Faking Injuries? - 2013 Follow-up
After I finished looking into NFL injuries during the 2014 regular season, we saw a couple distinct insights:
- Defenses appear to suffer more in-game injuries than offenses
- Injury stoppages occur more as the game goes on, with the fourth quarter having the greatest frequency of injury stoppage
- There is a positive correlation between offenses which run more plays and opposing defenses suffering injuries - but no such correlation between play frequency and injury in any other game situation
To me, this at least suggests the possibility that defensive players fake injuries against high-tempo offenses. It certainly doesn't prove it, but when I finished looking at 2014, I wondered, did this hold across other seasons as well?
I had 16 weeks of play by play data from 2013, so I decided to look at that as well and see if what I saw in 2014 was an anomaly.
You can be the judge.
Below is an image from my last post, the frequency of injury stoppages by offense/defense and quarter:
Now, here's the same chart, but for my 16 weeks of the 2013 regular season
I'd say those are similar! We observe the same pattern, injuries increase as the game goes on, and almost entirely on the defensive side of the ball.
Now, below is the scatter plot that illustrates an offense's plays per game against its opponent's rate of injury. This had by far the most significant correlation of all the game situations we examined - and it's the only situation where teams would benefit from faking injuries.
So we saw a correlation of 0.39 - whereas other game situations didn't have anything close to that high.
How about 2013?
Once again, a pretty interesting positive correlation.
And, as in the 2014 analysis, there was nothing close to a similar correlation in the other game scenarios.
So now we have two years of analysis, both of which show the same patterns in the data.
When teams run more offensive plays, the defenses they face need injury stoppages more frequently.
Either you attribute this to defenses being out of shape/unprepared and thus more likely to get fatigued and hurt...or you're like me and assume on the margins some players fake an injury occasionally to get a breather.
I'm willing to listen to arguments for the former, but I'd say if you think Bill Belichick hasn't thought about it, that seems unlikely
- Defenses appear to suffer more in-game injuries than offenses
- Injury stoppages occur more as the game goes on, with the fourth quarter having the greatest frequency of injury stoppage
- There is a positive correlation between offenses which run more plays and opposing defenses suffering injuries - but no such correlation between play frequency and injury in any other game situation
To me, this at least suggests the possibility that defensive players fake injuries against high-tempo offenses. It certainly doesn't prove it, but when I finished looking at 2014, I wondered, did this hold across other seasons as well?
I had 16 weeks of play by play data from 2013, so I decided to look at that as well and see if what I saw in 2014 was an anomaly.
You can be the judge.
Below is an image from my last post, the frequency of injury stoppages by offense/defense and quarter:
Now, here's the same chart, but for my 16 weeks of the 2013 regular season
I'd say those are similar! We observe the same pattern, injuries increase as the game goes on, and almost entirely on the defensive side of the ball.
Now, below is the scatter plot that illustrates an offense's plays per game against its opponent's rate of injury. This had by far the most significant correlation of all the game situations we examined - and it's the only situation where teams would benefit from faking injuries.
So we saw a correlation of 0.39 - whereas other game situations didn't have anything close to that high.
How about 2013?
Once again, a pretty interesting positive correlation.
And, as in the 2014 analysis, there was nothing close to a similar correlation in the other game scenarios.
So now we have two years of analysis, both of which show the same patterns in the data.
When teams run more offensive plays, the defenses they face need injury stoppages more frequently.
Either you attribute this to defenses being out of shape/unprepared and thus more likely to get fatigued and hurt...or you're like me and assume on the margins some players fake an injury occasionally to get a breather.
I'm willing to listen to arguments for the former, but I'd say if you think Bill Belichick hasn't thought about it, that seems unlikely
Thursday, January 22, 2015
BS Journalism Watch: WSJ Edition
Just had to quickly note an absurd piece from the Wall Street Journal today, shockingly, it's not from the editorial page.
But I saw an article titled "Generation Y Prefers Suburban Home Over City Condo," and immediately alarm bells started going off in my head.
:::DOES NOT COMPUTE:::
So I had to actually go read the article (which I guess was the point for WSJ.com) - because I 100% didn't believe that headline. It just went against all my understanding of that generation...which I'm technically a part of.
Now, if it had been a study on a different age group I wasn't a part of, say, 'Study finds Boomers prefer Fat Chicks' - maybe I'd be a little skeptical, but give them more of a benefit of the doubt.
But this seemed highly unlikely, so I read, and yeah, turns out it's absurd on it's face. From the article...
LAS VEGAS—One of the hottest debates among housing economists these days isn’t the trajectory of home sales, but whether millennials, those born in the 1980s and 1990s, want to remain urbanites or eventually relocate to the suburbs.
Some demographers and economists argue that the preference of millennials, also called Generation Y, for city living will remain long lasting. And surveys of these young urban residents have tended to show that they don’t mind small living quarters as long as they have access to mass transit and are close to entertainment, dining and their workplaces.
But a survey released Wednesday by the National Association of Home Builders, a trade group, suggested otherwise. The survey, based on responses from 1,506 people born since 1977, found that most want to live in single-family homes outside of the urban center, even if they now reside in the city.
“While you are more likely to attract this generation than other generations to buy a condo or a house downtown, that is a relative term,” said Rose Quint, the association’s assistant vice president of survey research. “The majority of them will still want to buy the house out there in the suburbs.”
The survey, which was released at the association’s convention in Las Vegas, found that 66% want to live in the suburbs, 24% want to live in rural areas and 10% want to live in a city center. One of the main reasons people want to relocate from the city center, she said, is that they “want to live in more space than they have now.” The survey showed 81% want three or more bedrooms in their home.
I read that and was flabbergasted. Only 10% of people born after 1977 want to live in a city? And 66% want to live in the suburbs?
Think of all the people you know under 35...do only 10% of them currently live in a city? Do two-thirds of them say, "You know what would be better than all these restaurants, bars, and museums? A finished basement and a two car garage."
Sure - now that lots of us have kids - people are making the switch, but two-thirds??? Still doesn't make sense...until you read one of the later paragraphs...
"The survey results, though, could be skewed because they included only millennials who first answered that they bought a home within the past three years or intended to do so in the next three years."
So, in other words, this survey is total bullsh*t.
If you self select only people who have already bought homes or are planning on it soon...and you target a group of people that generally won't have the wealth to buy single family homes in urban centers, you can't be surprised when they all say they want to live in suburb or rural areas. Hell I'm surprised you found 10% that want to live in cities (must've been the reluctant soon-to-be-suburbanites)
The whole premise of the article is built on some BS data from a survey that is misrepresented and by the way, is conducted by a homebuilders trade group (who you think may have some incentive to convince people the suburbs is the place to be???)
That's some grade A crappy journalism -
But I saw an article titled "Generation Y Prefers Suburban Home Over City Condo," and immediately alarm bells started going off in my head.
:::DOES NOT COMPUTE:::
So I had to actually go read the article (which I guess was the point for WSJ.com) - because I 100% didn't believe that headline. It just went against all my understanding of that generation...which I'm technically a part of.
Now, if it had been a study on a different age group I wasn't a part of, say, 'Study finds Boomers prefer Fat Chicks' - maybe I'd be a little skeptical, but give them more of a benefit of the doubt.
But this seemed highly unlikely, so I read, and yeah, turns out it's absurd on it's face. From the article...
LAS VEGAS—One of the hottest debates among housing economists these days isn’t the trajectory of home sales, but whether millennials, those born in the 1980s and 1990s, want to remain urbanites or eventually relocate to the suburbs.
Some demographers and economists argue that the preference of millennials, also called Generation Y, for city living will remain long lasting. And surveys of these young urban residents have tended to show that they don’t mind small living quarters as long as they have access to mass transit and are close to entertainment, dining and their workplaces.
But a survey released Wednesday by the National Association of Home Builders, a trade group, suggested otherwise. The survey, based on responses from 1,506 people born since 1977, found that most want to live in single-family homes outside of the urban center, even if they now reside in the city.
“While you are more likely to attract this generation than other generations to buy a condo or a house downtown, that is a relative term,” said Rose Quint, the association’s assistant vice president of survey research. “The majority of them will still want to buy the house out there in the suburbs.”
The survey, which was released at the association’s convention in Las Vegas, found that 66% want to live in the suburbs, 24% want to live in rural areas and 10% want to live in a city center. One of the main reasons people want to relocate from the city center, she said, is that they “want to live in more space than they have now.” The survey showed 81% want three or more bedrooms in their home.
I read that and was flabbergasted. Only 10% of people born after 1977 want to live in a city? And 66% want to live in the suburbs?
Think of all the people you know under 35...do only 10% of them currently live in a city? Do two-thirds of them say, "You know what would be better than all these restaurants, bars, and museums? A finished basement and a two car garage."
Sure - now that lots of us have kids - people are making the switch, but two-thirds??? Still doesn't make sense...until you read one of the later paragraphs...
"The survey results, though, could be skewed because they included only millennials who first answered that they bought a home within the past three years or intended to do so in the next three years."
So, in other words, this survey is total bullsh*t.
If you self select only people who have already bought homes or are planning on it soon...and you target a group of people that generally won't have the wealth to buy single family homes in urban centers, you can't be surprised when they all say they want to live in suburb or rural areas. Hell I'm surprised you found 10% that want to live in cities (must've been the reluctant soon-to-be-suburbanites)
The whole premise of the article is built on some BS data from a survey that is misrepresented and by the way, is conducted by a homebuilders trade group (who you think may have some incentive to convince people the suburbs is the place to be???)
That's some grade A crappy journalism -
Friday, January 16, 2015
Are NFL Teams Faking Injuries?
Given all the animated discussion over the Patriots tactics against the Ravens in their divisional round playoff game, I thought it would be as good a time as any to post some gamesmanship research.
If you read about the game – you know the Ravens were a bit upset with the Patriots usage of receiver eligibility to disguise their offense. The response from the Patriots was, well, Patriots-like. If it’s not against the letter of the law, it’s all good (unless it’s videotaping other teams, in which case even the law doesn’t matter).
Clearly, the NFL is a league where teams will look for any edge, even if it means pushing the bounds of fair competition.
So it’s with that issue in mind that I started digging into the possibility that players are faking injuries.
As a Philadelphia sports fan, I’m generally inclined to assume that my teams will ultimately lose, and so once the Eagles started running Chip Kelly’s offense, I was quick to accuse every injured defender a liar and a cheat (not to their faces of course).
The Eagles run a very high-tempo offense, one that doesn’t allow opposing defenses to leisurely make substitutions or get a full play clock to catch their breath. It’s a major feature of their strategy, and one that opposing teams would love to minimize, particularly if they aren’t well prepared for it.
One way to slow down the pace of the Eagles offense would be for an opponent to use their timeouts while the Eagles offense is in full-swing. But since a team only has three timeouts per half, they’re a little too valuable to burn. An injury however, is an official’s timeout – these are unlimited – and there’s no cost to the injured team outside of the last two minutes of a half, except that the injured player must sit out for the next play.
So in the current NFL world where fake injuries don’t have a cost (apart from having the ‘injured’ defender miss a play) and can help defenses maintain an easier pace – you could see why an Eagles fan might look at an opposing defender’s injury with suspicion.
Could the Eagles opponents be faking injuries to slow them down? The idea is one that makes the rounds in Eagles bars, but one that’s hard to actually evaluate. So this is my attempt to try.
Others have analyzed NFL injuries via metrics like games lost (i.e., players who aren’t active on game day because they’re injured), but to my knowledge, this is the first attempt to use play-by-play data to look at in-game injuries for trends and whether teams might be faking against the Eagles or other high-tempo teams.
The analysis is a bit long, so below are some quick takeaways:
- The Eagles suffered (or inflicted depending on your point of view) the most defensive injuries against the in league in 2014, and are 2nd in the league when adjusted for a per-play basis
- Across the league, there is a significant positive correlation between running more offensive plays and a higher per-play rate of defensive injury
- Such a correlation could be attributed to fatigue, but this correlation does not hold for the three other possible game situations (own offense, own defense, offense against) – these show no strong relationship between running more plays and a higher per-play rate of injury
- Taken together, these last two points support my hypothesis that players fake injuries against higher tempo offenses
Data Collection and Methodology:
I gathered play-by-play data from all the regular season games this year, and identified all the in-game injuries noted in the descriptions. In case you haven’t read play-by-play before, each play has its own line and explanation, and any play that resulted in an injury timeout is noted. Below is an example:
2-10-DET 40 (14:05) (Shotgun) 10-E.Manning pass incomplete deep middle to 80-V.Cruz (27-G.Quin). DET-27-G.Quin was injured during the play.
If an injury was noted as a stoppage, it was recorded. In an ideal world, we’d eliminate injuries that are serious and clearly not fakes, but there’s no detail on the injuries in the game data, so we have to take the major with the minor.
The play-by-play injuries were then coded as to whether they occurred to the offense, defense, or on special teams (e.g., kick coverage). There were approximately 700 total observations, and while it’s possible that not all injuries were noted in the play-by-play data, this is the only comprehensive source for such information. Given that there are ~700 injury stoppages in our set, that works out to 2-3 injury timeouts per game, which sounds possible but could also be low. It’s possible that whoever officially creates the play-by-play gets lazy and misses some, my assumption here is that if any injuries are somehow missed, they aren’t biased towards one particular side of the ball.
After gathering the data, one additional adjustment is for play frequency. Simply put, the more snaps a player gets, the more likely they are to sustain an injury. Therefore, any team that runs more plays is more likely to see a higher absolute number of injuries. To account for this, I also looked up the total number of plays for each team’s offense and defense during the course of the year – to understand the rate of injury rather than the total number.
Output:
Let’s start with the absolutes. I found 692 injuries in the play by play data, 66 of which were special teams plays. I took these out, because they aren’t central to the question of are teams faking injuries to slow down offenses. Of the remaining injuries, I looked at whether they happened to an offensive player or a defensive player and which team they occurred against, below is the data from this season:
Not a shocker to see the Eagles at the very top of that list, and indeed they led the league in defensive injuries against this season.
However, as I already noted, this metric can be misleading. The Eagles offense runs more plays per game than any other team, so we would expect them to be near the top of this list. We need to adjust our data for the number of offensive plays – and we can examine the rate at which opposing defensive players get injured against the Eagles and whether they are still an outlier.
So as we see when we look at it on a rate basis (number of injuries/number of total offensive plays), the Eagles are still close to the top of the league, and roughly 50% above the league average. Houston is just above them, and while no one would consider their offense up-tempo, the fact that the Eagles are so high would be consistent with the theory that opposing teams might be faking injuries to slow them down.
Now, before we get any further down the faking rabbit hole, what if there’s a simpler explanation that doesn’t involve fake injuries? There’s another obvious possibility to explain why the Eagles are so high in defensive injuries against. What about the idea that as you run more plays, players get more physically exhausted, and therefore are naturally more susceptible to injury?
That seems possible, right? So let’s examine that idea a bit.
The first thing we can do is very simple, does injury frequency vary by quarter? If teams get physically tired during the course of the game and that leads to more fatigue and more injury, there should be more injuries as the game goes on:
Interesting. This sort of muddies our waters a bit.
In absolute terms, the number of injures rises dramatically as the game goes on. Injury stoppages in the fourth quarter occur at 2x the rate they do in the first quarter. Part of that can be explained by the fact that the clock stops more frequently in the fourth quarter than the others (and thus more plays), but that wouldn’t explain a 2x difference. I would want to check against the sheer number of plays run by quarter, but I don’t have that data without a bunch of more work.
Still – it looks like that thinking may be reasonable, injuries increase as the game goes on. But it’s also interesting to note that the increase is much more pronounced on the defensive side of the ball. We’ll come back to that later.
For the time being, let’s move on to looking for evidence of fake injuries.
As a general framework for this analysis, I’ve split the types of injury stoppages into four buckets:
1. While on defense, your own team suffers an injury (Own-Defense)
2. While on defense, your opponent suffers an injury (Opponent-Offense)
3. While on offense, your own team suffers an injury (Own-Offense)
4. While on offense, your opponent suffers an injury (Opponent-Defense)
We’ve been focused on bucket #4 thus far, and saw that on a per-play basis the Eagles are close to the top of the league in terms of defensive injuries against on a per-play basis. We also saw that overall injuries increase as the game goes on – but it seems much more prevalent on the defense, which is the side that would be interested in faking injuries.
So can we look a bit deeper to see if play frequency increases injury risk across each type of injury stoppage? The idea that running more plays increases the rate of injury should not be exclusive to offense or defense – although it appears that way at first glance – it’s hard for me to believe that defensive players are in any worse shape or take any harder hits than offensive players.
To take a look at the issue, I ran some basic correlations across each of those four injury types, looking at the number of plays run and the rate of injury. Just to clarify, I summarized the four below:
1. Your defense runs more plays and gets injured more often (this would be a bad defense)
2. Your defense runs more plays and your opponent gets injured more often
3. Your offense runs more plays and gets injured more often (this would be a good offense)
4. Your offense runs more plays and your opponent gets injured more often
Again, if the rate of injury increases with more plays, we should see relationships in each of these situations. So what do we see?
#1 – So earlier we saw defenses suffering more injuries as the game goes on…and yet, when we look at number of defensive plays per game and the rate of defensive injury, there really doesn’t seem to be any relationship. Teams with defenses that are on the field a lot don’t seem to get injured at a higher rate than those who execute fewer plays.
#2 – Our next picture shows a similar lack of correlation, this time between defensive plays per game and the rate of opponent offensive injury. This idea would be that if an opposing defense is really bad, your offense gets more plays, and might get hurt more frequently. But the data shows nothing that looks like a relationship
#3 – Now we’re on the offensive side of the ball, looking at whether an offense that runs a lot of plays suffers a higher rate of injury. There’s actually a relatively weak negative correlation between running lots of offensive plays and suffering offensive injuries. If you want to believe in things like Chip Kelly’s Sport Science program, you would expect a negative relationship as teams that employ high tempo offenses are more adequately prepared to stay healthy while running it. While a very slight relationship exists, it doesn’t look to be that large, if it even exists at all.
#4 – Hmmm…now it’s officially interesting. When we look at the rate of defensive injury against offensive plays per game, there is our most significant positive relationship. A correlation of 0.39 is significantly more than we’ve seen in the other three instances, and it’s also the only one where there is a clear incentive to fake injuries.
Taken alone, this relationship might be explained by the fatigue theory, but I think it’s tougher to make that argument when you don’t see anywhere close to the same relationship in all other situations. When a defense is bad and on the field a lot, they don’t get hurt more often, when an offense is good and runs lots of plays, they don’t get hurt more often, and when a defense is bad and their opponent runs a lot of plays, they don’t get hurt more often. The only ones who show a substantial increase in injury stoppages as plays increase are opposing defenses.
To me, that’s pretty freaking suspicious. Either opposing defenses are the only ones who suffer from fatigue-related injuries…or maybe some of the injuries aren’t injuries at all.
Now, this is far from 100% conclusive. It may be that defensive players naturally get more fatigued than offensive players due to their roles (i.e., offensive players can take more plays off because they know the play calls)…but I don’t really buy that. I think there’s at least a little bit of shenanigans.
It’s also an entirely different question as to how much this even matters. Any fake injury will happen on the margins, as you see the number of total injury stoppages remain relatively small (2-3 total per game). But for an Eagles team that narrowly missed the playoffs, the marginal differences matter.
Solutions
So is there a way to address teams that fake injuries? There are certainly options, but some of them are just impractical. The NHL has a penalty for diving, but you really can’t ask the officials to diagnose injuries and try to penalize fakers. You could charge a team a timeout, which the NFL already does if an injury occurs in the last two minutes. That’s much easier than trying to penalize teams, but also provides incentive for coaches and players to hide injuries (also, what do you do in the case of a ‘Body Bag Game’?)
One idea I think might actually be workable, is to tweak the NFL’s current rule for injured players. As it stands today, an injured player who causes a stoppage has to miss at least one play. Well, if you want to eliminate fake injuries, you should raise the cost to those players for faking, and you can do that simply by making them sit out longer. What if, when a player is injured and causes an official stoppage, they must sit out not for just one play, but for the remainder of that series or until a change of possession?
Missing the rest of a series is a bit more significant than missing just one play, and is something that could balance the equation on faking injuries. It also dovetails nicely with the NFL’s stated emphasis on player safety (interpret my use of the term ‘stated’ as you will, based on your own level of cynicism)
If there are fake injuries happening, such an increase in missed time might be enough to keep anyone from acting hurt. Requiring a player to miss the remainder of a series also isn’t as significant as forcing them out for the rest of a quarter or a game.
Some would argue that this isn’t even a problem worth focusing on. But if fast-paced offenses gain greater acceptance in the NFL (which will happen if more of them succeed), the issue will only become more prominent (beyond the realm of the paranoid Eagles fan) and could materially impact the game.
Summary Data
Below is a table of all the raw data I used here, as a reference:
Bonus – Jevon Kearse All-Stars
One last thing I did with this data, after pulling it together, was dig through and sum up all the specific players who sustained injuries in a game this season.
I wanted to look into it because I was really interested in what I’ve termed the ‘Jevon Kearse All-Stars.’ It may just be a bad memory on my part, but one of the things I really remember about Jevon Kearse’s tenure with the Eagles was his tendency to hurt himself and fall to the ground like he got shot. I feel like his injuries always looked more serious than they actually were. It’s possible I’m misremembering, and if so I apologize to the Freak. But with that said, here were the league leaders in injury stoppages in the NFL this year:
Now I’m not accusing these guys of faking injuries, these just happened to be the guys with the most injury stoppages in the play-by-play data (excluding special teams, which most of these guys don’t play anyway).
Enjoy your spot on the Kearse All-Stars guys – the trophy (it’s an ace bandage) is in the mail!
If you read about the game – you know the Ravens were a bit upset with the Patriots usage of receiver eligibility to disguise their offense. The response from the Patriots was, well, Patriots-like. If it’s not against the letter of the law, it’s all good (unless it’s videotaping other teams, in which case even the law doesn’t matter).
Clearly, the NFL is a league where teams will look for any edge, even if it means pushing the bounds of fair competition.
So it’s with that issue in mind that I started digging into the possibility that players are faking injuries.
As a Philadelphia sports fan, I’m generally inclined to assume that my teams will ultimately lose, and so once the Eagles started running Chip Kelly’s offense, I was quick to accuse every injured defender a liar and a cheat (not to their faces of course).
The Eagles run a very high-tempo offense, one that doesn’t allow opposing defenses to leisurely make substitutions or get a full play clock to catch their breath. It’s a major feature of their strategy, and one that opposing teams would love to minimize, particularly if they aren’t well prepared for it.
One way to slow down the pace of the Eagles offense would be for an opponent to use their timeouts while the Eagles offense is in full-swing. But since a team only has three timeouts per half, they’re a little too valuable to burn. An injury however, is an official’s timeout – these are unlimited – and there’s no cost to the injured team outside of the last two minutes of a half, except that the injured player must sit out for the next play.
So in the current NFL world where fake injuries don’t have a cost (apart from having the ‘injured’ defender miss a play) and can help defenses maintain an easier pace – you could see why an Eagles fan might look at an opposing defender’s injury with suspicion.
Could the Eagles opponents be faking injuries to slow them down? The idea is one that makes the rounds in Eagles bars, but one that’s hard to actually evaluate. So this is my attempt to try.
Others have analyzed NFL injuries via metrics like games lost (i.e., players who aren’t active on game day because they’re injured), but to my knowledge, this is the first attempt to use play-by-play data to look at in-game injuries for trends and whether teams might be faking against the Eagles or other high-tempo teams.
The analysis is a bit long, so below are some quick takeaways:
- The Eagles suffered (or inflicted depending on your point of view) the most defensive injuries against the in league in 2014, and are 2nd in the league when adjusted for a per-play basis
- Across the league, there is a significant positive correlation between running more offensive plays and a higher per-play rate of defensive injury
- Such a correlation could be attributed to fatigue, but this correlation does not hold for the three other possible game situations (own offense, own defense, offense against) – these show no strong relationship between running more plays and a higher per-play rate of injury
- Taken together, these last two points support my hypothesis that players fake injuries against higher tempo offenses
Data Collection and Methodology:
I gathered play-by-play data from all the regular season games this year, and identified all the in-game injuries noted in the descriptions. In case you haven’t read play-by-play before, each play has its own line and explanation, and any play that resulted in an injury timeout is noted. Below is an example:
2-10-DET 40 (14:05) (Shotgun) 10-E.Manning pass incomplete deep middle to 80-V.Cruz (27-G.Quin). DET-27-G.Quin was injured during the play.
If an injury was noted as a stoppage, it was recorded. In an ideal world, we’d eliminate injuries that are serious and clearly not fakes, but there’s no detail on the injuries in the game data, so we have to take the major with the minor.
The play-by-play injuries were then coded as to whether they occurred to the offense, defense, or on special teams (e.g., kick coverage). There were approximately 700 total observations, and while it’s possible that not all injuries were noted in the play-by-play data, this is the only comprehensive source for such information. Given that there are ~700 injury stoppages in our set, that works out to 2-3 injury timeouts per game, which sounds possible but could also be low. It’s possible that whoever officially creates the play-by-play gets lazy and misses some, my assumption here is that if any injuries are somehow missed, they aren’t biased towards one particular side of the ball.
After gathering the data, one additional adjustment is for play frequency. Simply put, the more snaps a player gets, the more likely they are to sustain an injury. Therefore, any team that runs more plays is more likely to see a higher absolute number of injuries. To account for this, I also looked up the total number of plays for each team’s offense and defense during the course of the year – to understand the rate of injury rather than the total number.
Output:
Let’s start with the absolutes. I found 692 injuries in the play by play data, 66 of which were special teams plays. I took these out, because they aren’t central to the question of are teams faking injuries to slow down offenses. Of the remaining injuries, I looked at whether they happened to an offensive player or a defensive player and which team they occurred against, below is the data from this season:
Not a shocker to see the Eagles at the very top of that list, and indeed they led the league in defensive injuries against this season.
However, as I already noted, this metric can be misleading. The Eagles offense runs more plays per game than any other team, so we would expect them to be near the top of this list. We need to adjust our data for the number of offensive plays – and we can examine the rate at which opposing defensive players get injured against the Eagles and whether they are still an outlier.
So as we see when we look at it on a rate basis (number of injuries/number of total offensive plays), the Eagles are still close to the top of the league, and roughly 50% above the league average. Houston is just above them, and while no one would consider their offense up-tempo, the fact that the Eagles are so high would be consistent with the theory that opposing teams might be faking injuries to slow them down.
Now, before we get any further down the faking rabbit hole, what if there’s a simpler explanation that doesn’t involve fake injuries? There’s another obvious possibility to explain why the Eagles are so high in defensive injuries against. What about the idea that as you run more plays, players get more physically exhausted, and therefore are naturally more susceptible to injury?
That seems possible, right? So let’s examine that idea a bit.
The first thing we can do is very simple, does injury frequency vary by quarter? If teams get physically tired during the course of the game and that leads to more fatigue and more injury, there should be more injuries as the game goes on:
Interesting. This sort of muddies our waters a bit.
In absolute terms, the number of injures rises dramatically as the game goes on. Injury stoppages in the fourth quarter occur at 2x the rate they do in the first quarter. Part of that can be explained by the fact that the clock stops more frequently in the fourth quarter than the others (and thus more plays), but that wouldn’t explain a 2x difference. I would want to check against the sheer number of plays run by quarter, but I don’t have that data without a bunch of more work.
Still – it looks like that thinking may be reasonable, injuries increase as the game goes on. But it’s also interesting to note that the increase is much more pronounced on the defensive side of the ball. We’ll come back to that later.
For the time being, let’s move on to looking for evidence of fake injuries.
As a general framework for this analysis, I’ve split the types of injury stoppages into four buckets:
1. While on defense, your own team suffers an injury (Own-Defense)
2. While on defense, your opponent suffers an injury (Opponent-Offense)
3. While on offense, your own team suffers an injury (Own-Offense)
4. While on offense, your opponent suffers an injury (Opponent-Defense)
We’ve been focused on bucket #4 thus far, and saw that on a per-play basis the Eagles are close to the top of the league in terms of defensive injuries against on a per-play basis. We also saw that overall injuries increase as the game goes on – but it seems much more prevalent on the defense, which is the side that would be interested in faking injuries.
So can we look a bit deeper to see if play frequency increases injury risk across each type of injury stoppage? The idea that running more plays increases the rate of injury should not be exclusive to offense or defense – although it appears that way at first glance – it’s hard for me to believe that defensive players are in any worse shape or take any harder hits than offensive players.
To take a look at the issue, I ran some basic correlations across each of those four injury types, looking at the number of plays run and the rate of injury. Just to clarify, I summarized the four below:
1. Your defense runs more plays and gets injured more often (this would be a bad defense)
2. Your defense runs more plays and your opponent gets injured more often
3. Your offense runs more plays and gets injured more often (this would be a good offense)
4. Your offense runs more plays and your opponent gets injured more often
Again, if the rate of injury increases with more plays, we should see relationships in each of these situations. So what do we see?
#1 – So earlier we saw defenses suffering more injuries as the game goes on…and yet, when we look at number of defensive plays per game and the rate of defensive injury, there really doesn’t seem to be any relationship. Teams with defenses that are on the field a lot don’t seem to get injured at a higher rate than those who execute fewer plays.
#2 – Our next picture shows a similar lack of correlation, this time between defensive plays per game and the rate of opponent offensive injury. This idea would be that if an opposing defense is really bad, your offense gets more plays, and might get hurt more frequently. But the data shows nothing that looks like a relationship
#3 – Now we’re on the offensive side of the ball, looking at whether an offense that runs a lot of plays suffers a higher rate of injury. There’s actually a relatively weak negative correlation between running lots of offensive plays and suffering offensive injuries. If you want to believe in things like Chip Kelly’s Sport Science program, you would expect a negative relationship as teams that employ high tempo offenses are more adequately prepared to stay healthy while running it. While a very slight relationship exists, it doesn’t look to be that large, if it even exists at all.
#4 – Hmmm…now it’s officially interesting. When we look at the rate of defensive injury against offensive plays per game, there is our most significant positive relationship. A correlation of 0.39 is significantly more than we’ve seen in the other three instances, and it’s also the only one where there is a clear incentive to fake injuries.
Taken alone, this relationship might be explained by the fatigue theory, but I think it’s tougher to make that argument when you don’t see anywhere close to the same relationship in all other situations. When a defense is bad and on the field a lot, they don’t get hurt more often, when an offense is good and runs lots of plays, they don’t get hurt more often, and when a defense is bad and their opponent runs a lot of plays, they don’t get hurt more often. The only ones who show a substantial increase in injury stoppages as plays increase are opposing defenses.
To me, that’s pretty freaking suspicious. Either opposing defenses are the only ones who suffer from fatigue-related injuries…or maybe some of the injuries aren’t injuries at all.
Now, this is far from 100% conclusive. It may be that defensive players naturally get more fatigued than offensive players due to their roles (i.e., offensive players can take more plays off because they know the play calls)…but I don’t really buy that. I think there’s at least a little bit of shenanigans.
It’s also an entirely different question as to how much this even matters. Any fake injury will happen on the margins, as you see the number of total injury stoppages remain relatively small (2-3 total per game). But for an Eagles team that narrowly missed the playoffs, the marginal differences matter.
Solutions
So is there a way to address teams that fake injuries? There are certainly options, but some of them are just impractical. The NHL has a penalty for diving, but you really can’t ask the officials to diagnose injuries and try to penalize fakers. You could charge a team a timeout, which the NFL already does if an injury occurs in the last two minutes. That’s much easier than trying to penalize teams, but also provides incentive for coaches and players to hide injuries (also, what do you do in the case of a ‘Body Bag Game’?)
One idea I think might actually be workable, is to tweak the NFL’s current rule for injured players. As it stands today, an injured player who causes a stoppage has to miss at least one play. Well, if you want to eliminate fake injuries, you should raise the cost to those players for faking, and you can do that simply by making them sit out longer. What if, when a player is injured and causes an official stoppage, they must sit out not for just one play, but for the remainder of that series or until a change of possession?
Missing the rest of a series is a bit more significant than missing just one play, and is something that could balance the equation on faking injuries. It also dovetails nicely with the NFL’s stated emphasis on player safety (interpret my use of the term ‘stated’ as you will, based on your own level of cynicism)
If there are fake injuries happening, such an increase in missed time might be enough to keep anyone from acting hurt. Requiring a player to miss the remainder of a series also isn’t as significant as forcing them out for the rest of a quarter or a game.
Some would argue that this isn’t even a problem worth focusing on. But if fast-paced offenses gain greater acceptance in the NFL (which will happen if more of them succeed), the issue will only become more prominent (beyond the realm of the paranoid Eagles fan) and could materially impact the game.
Summary Data
Below is a table of all the raw data I used here, as a reference:
Bonus – Jevon Kearse All-Stars
One last thing I did with this data, after pulling it together, was dig through and sum up all the specific players who sustained injuries in a game this season.
I wanted to look into it because I was really interested in what I’ve termed the ‘Jevon Kearse All-Stars.’ It may just be a bad memory on my part, but one of the things I really remember about Jevon Kearse’s tenure with the Eagles was his tendency to hurt himself and fall to the ground like he got shot. I feel like his injuries always looked more serious than they actually were. It’s possible I’m misremembering, and if so I apologize to the Freak. But with that said, here were the league leaders in injury stoppages in the NFL this year:
Now I’m not accusing these guys of faking injuries, these just happened to be the guys with the most injury stoppages in the play-by-play data (excluding special teams, which most of these guys don’t play anyway).
Enjoy your spot on the Kearse All-Stars guys – the trophy (it’s an ace bandage) is in the mail!
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