Measuring Team APY Surplus Value
Which teams converts surplus value into wins?
Welcome back everyone to another newsletter of Cap & Trade! Super stoked to have some time to write again. My break from the YouTube show has been well worth it to say the least. Hopefully I can get back on that after training camp gets rocking.
So with this newsletter edition I wanted to venture outside of Houston to take a look at how teams utilize value surplus and their efficiency generating said value into wins.
I pulled player APY (average per year) surplus value from Overthecap.com for the 2019-2022 seasons. This data applies to regular season only.
APY surplus value is additional APY value from player performance against the player’s contract APY value. Think rookie contracts and the excess value those contracts provide. Conversely veteran contracts are generally signed at market value generating minimal excess value.
Surplus Value = Measured APY Value - Player Contract APY Value
The measured APY value is pulled from Overthecap.com Valuation Tools. Introduction to the methodology can be found here. In summary terms, the Valuation Tool utilizes multiple variables to generate a player value in terms of Contract Average Per Year.
Team Totals
Below is a table displaying total APY surplus value over the 2019 through 2022 seasons. The columns are sortable. (this is a new tool from datawrapper.de so please forgive formatting issues).
If we wanted to view total surplus value from a different perspective via old school bar chart:
Based on the preliminary data the amount of surplus value generated on a grading system has a wide variance. Four years of data, I was surprised at the amount of variance across the league. Keep in mind this can factor in injured players with big contracts (ex. Michael Thomas with New Orleans).
Value Into Wins
Turning that surplus value into wins is primarily a function of scheme and coaching with some injury and game variance tied in. The information presented below has not been normalized.
How do the 32 NFL teams measure with surplus value against wins:
(For some reason the chart is dropping off the New York Jets label with the bottom left data dot, sorry Jason.)
Here we can see the teams which turn surplus value into wins year over year with the teams in the upper right quadrant.
The area of interest to me is the top left quadrant. This would be the team generating wins from lesser surplus value compared to the teams in the upper right quadrant. For me there is no surprise the head coaches in this area are Nick Sirianni, Kyle Shannahan, and Sean McVay.
The lower right hand quadrant is the questionable coaching area. The team in this area viewed as an outlier, for me, is Cincinnati. I believe the Joe Burrow injury year affected their placement.
As always the biggest takeaway is generating value from quarterbacks on rookie contracts. Majority of the teams to the right of the vertical dashed line had quarterbacks on a rookie contract for partial or all of the sample period of 2019 through 2022.
When I drop a linear trend line onto the chart above, the data does return a decent amount of correlation.
League Wide Average
When we combine the data across the 32 NFL teams per year, the following values are output. The 2020 regular season had the largest league wide surplus value as an average.
Single Season Return on Value
Looking at the data from a smaller sample size, on a single season view we can see the teams with low return on value (aka low wins with high surplus value), and conversely teams with high return on value (aka high team wins with low surplus value).
Pretty shocking to see the teams that finished 32nd and 31st in team record during the 2022 season show up on this table. As referenced in the table above, the league average surplus value in 2022 was $18.4 million. Houston and Chicago were well above that number, only to finish with 3 wins.
On the flip side the above table shows teams who generated high number of team wins with low surplus value on the roster.
Summary
Value gained in surplus value generally will lead to more wins provided the coaching staff can turn that surplus value into wins. Simply put…Coaching Matters!. The data also confirms teams with a franchise quarterback on the roster, regardless of surplus value, leads to more wins.
The data does not account for injuries and unfortunate game situations that could lead to a loss.
-TC