McMinnville’s Noon Rotary Club was host to Michael Roach, a sports economics professor from MTSU. Roach conducts studies in all aspects of sports economics and his talk Thursday was about the firing of the head coach of an organization and perhaps the negative effects it can have on those inside the organization.
In the field of sports this is a growing area in economics. It is the field of sports analytics. It is the study of how you can get your team to perform better. This can help determine if players are under-valued and how, as an owner, you could help your team.
Roach said, “Why football is because in football there is more clear data involved. There is a final score with a winner and a loser, compared to other business settings that can become much more murky.”
A sporting event you can look at a box score and it is what it is, versus looking at a company’s performance which involves revenue, profits and stock price. Sometimes there are more things involved in looking a stock price. Sports has a simpler set of rules in a stripped-down world.
“When a team fires a coach, is it going to boost the team’s performance or hurt that team the following year?” asked Roach.
There is an argument you can make for either side of this question. Sometimes the coach just loses the interest of his players or just might not be the right person for the job. Economists call this a “switching cost” or a disruptive effect. It starts when you turnover the top of the organization.
You think with an NFL team it would be more pronounced than it would be in other sports just because of the size of the organization, more players, more assistants, and a lot more moving parts. The game play is a lot more complicated in the NFL. Just because a player is good on one team does not mean he would be the right fit on another team. Some teams play with three down lineman and some use four lineman just for an example.
How to measure a team’s performance and what data does someone need? In the short run when a team makes the decision to fire its coach the team can expect to take a hit. First you can look at the win total. They play a total of 16 games and just a couple of tipped balls can really determine the outcome in the NFL versus other sports, says Roach.
The second factor is the point differential which shows the actual points versus how many points were allowed. The point differential reflects the actual underlying performance better than the win total. The final factor is whether the team made the playoffs since that is what matters to owners and fans.
The other trends to take into account are the strength of the schedule and a strong trend to get set back to the middle of the pack. A team in the middle of the pack is more than likely to get better whether a coaching change happens or not. Another thing that helps is the NFL drafts players in reverse order. Bad teams get to pick first in order to help the organization increase performance.
The worst teams in Roach’s study had a point differential of -230 which was the worst team’s data. Those teams were losing each game by two touchdowns. Looking at those same teams the following season and those teams improved to -90 which means they were now losing games by five points. “Even the awful teams should improve after a losing season,” stated Roach.
On average when the decision to fire your coach has been made, the following season reduces your win total by eight-tenths of a win on average. Your point differential reduces by 27 points and reduces your odds to make the playoffs by 12 percent. In the short-run the disruptive effect wins out.
“When a team fires a coach, they can expect to take a little bit of a hit.”
Why do teams change a coach? Even when teams have this information, they still do it. They are probably more than willing to take the initial hit and possibly land the next big coach even if you know on average you are not going to improve over the following season. Another factor, Roach says, is the fans who call for the coach to be fired. The fans are the ones who fill the seats.
You always hear the NFL is a business and it is, but in fact it is quite rare there are only 32 teams up for grabs. Many people have called NFL teams “toys for the super wealthy.” The owners are not always known for making the best decisions. Many times the owner’s decisions can be irrational or impulsive.
Winning games can be one of the only things that can secure a future for any coach for any team. If you would like to hear more of the Michael Roach commentary on NFL coaching, you can listen June 10, at 5:05 a.m., and June 11 at 1 p.m. on radio 91.3 WCPI.