Let me start this post saying I'm not a football guru. I'm not an X's and O's guy. I'm not connected in any way to OU or any other school. I don't have friends or talk to people in any athletics department.
What I am is an engineer, and I like numbers. I've worked in industry for 20 years and I've managed large budgets and I've managed teams of people. So it got me thinking, what's an actual dollar amount that players are making and how does it compare to teams with lower NIL budgets? And I'm a lot less interested with the best player and more interested in the 10th or 20th highest paid players on a team. Because those are starters and supposed to be major contributors and there are implications for depth. And given what we might expect for a 10th or 20th highest paid player to make on our roster, should we be surprised that other teams can come in and pay more than OU even if they have a smaller budget?
Something I'd like to start off with, there's a concept out there called a Pareto Principle or 80-20 rule. Formally, it states that 80% of the outcomes are due to 20% of the causes. It is sometimes applied to wealth or income saying that 80% of the income/wealth (the outcome) is due to 20% of the individuals (causes). Meaning the top 20% of people make 80% of the money. Let's just file that away for now, I'll come back to it...
Things I think I know about OU's NIL (there's a lot of hearsay related to NIL and while I'd love hard data, I don't have access to it):
Oh, an interesting aside.... Remember the Pareto Principle (80-20 rule) from earlier? If we apply the principle to the Chiefs, we would expect to see that 11 of the players (20% of 53) are get 80% of the income. If we sum up how much salary is dedicated to the 11 players, it's 70% (pretty darned close to the 80% rule!). For a college football team, we look at the top 21 players, which comes out to 73% of the salary according to the table below. I suspect the reason it's not closer to 80% is because of league minimums, but I have no evidence to back it up... Anyways, I think that's a pretty interesting result since I didn't enter the analysis trying to match it up to the Pareto Principle...
Some interesting thoughts (assuming all teams spend according to the same percents in the table below):
What do you notice? Did you see an error with any of the analysis?
Here's the table:
What I am is an engineer, and I like numbers. I've worked in industry for 20 years and I've managed large budgets and I've managed teams of people. So it got me thinking, what's an actual dollar amount that players are making and how does it compare to teams with lower NIL budgets? And I'm a lot less interested with the best player and more interested in the 10th or 20th highest paid players on a team. Because those are starters and supposed to be major contributors and there are implications for depth. And given what we might expect for a 10th or 20th highest paid player to make on our roster, should we be surprised that other teams can come in and pay more than OU even if they have a smaller budget?
Something I'd like to start off with, there's a concept out there called a Pareto Principle or 80-20 rule. Formally, it states that 80% of the outcomes are due to 20% of the causes. It is sometimes applied to wealth or income saying that 80% of the income/wealth (the outcome) is due to 20% of the individuals (causes). Meaning the top 20% of people make 80% of the money. Let's just file that away for now, I'll come back to it...
Things I think I know about OU's NIL (there's a lot of hearsay related to NIL and while I'd love hard data, I don't have access to it):
- Every player gets a minimum of $50k every year
- OU's NIL collective is planning to spend in the $17-21M range and it's likely towards the higher end of that range (I think this was from one of the Brandon and Parker podcasts -- exact numbers may not be right)
- OU's NIL collective is signing all players to a single year contracts
- OU's NIL collective has a $20M budget. I run the same analysis for $10M and $5M budgets, too.
- The distribution of salaries is similar, or will be similar, to an NFL team's. What this means is if I order the players on an NFL team by salary (I am not factoring in the position they play!), I'd expect roughly the same distribution to apply to a college football team.
- Big difference #1: An NFL roster is 53 people and OU's is 105. However, in my analysis, after the 51st player, OU would be paying them the $50k minimum anyways.
- Big difference #2: The NFL players have a union and a collective bargaining agreement. This enforces rules such as minimum salaries by experience level. I'm not sure how to model this exactly, so for now I ignore it in the hopes it's not relevant.
- Big difference #3: NFL teams can structure multiple year deals with players and spread out salary cap between years and back load the salary cap hit. This is also not modeled in any way in the work below. My analysis uses this year's cap hit, no past or future years.
- There is no such thing as the "model NFL team" from a salary perspective. However, I took the Chiefs as the basis for this analysis because 1) they have a championship level roster and 2) they haven't had an expensive player go onto the injured reserve this year (the website where I got the data removes player salaries if they go on IR since the page is about the salary cap -- I wanted a team that I didn't have to do any compensation for injuries).
- An area of future work might be to analyze all teams and come up with a theoretical "ideal" NFL team salary distributions. 1 team is a small sample size and conclusions below can be invalid because of that.
Oh, an interesting aside.... Remember the Pareto Principle (80-20 rule) from earlier? If we apply the principle to the Chiefs, we would expect to see that 11 of the players (20% of 53) are get 80% of the income. If we sum up how much salary is dedicated to the 11 players, it's 70% (pretty darned close to the 80% rule!). For a college football team, we look at the top 21 players, which comes out to 73% of the salary according to the table below. I suspect the reason it's not closer to 80% is because of league minimums, but I have no evidence to back it up... Anyways, I think that's a pretty interesting result since I didn't enter the analysis trying to match it up to the Pareto Principle...
Some interesting thoughts (assuming all teams spend according to the same percents in the table below):
- A lower budget team will never be able to outspend the higher budget team on top paid player on the roster. I think this is what most of us would expect.
- A $10M budget team will be able to outbid the $20M budget team on their 5th player and below. The $10M team could pay them ~$1.4M and the $20M team would pay ~$1.1M.
- In fact, the $10M team could outbid the $20M team on each of the players 5-10 and still have it fit within their budget! This assumes the $10M team would need to fill all of their slots 1-6....
- Similarly, the $5M team could outbid the $20M team on their 7th player and below. The $5M team could pay them ~$700k while the $20M team could pay ~$600k.
- A team with a $5M budget, using their roster spots 1-5, could outbid the $20M team for 10 of their 22 starters! That number is shockingly high to me...
- A team with a $10M budget, using their roster spots 1-5, could outbid the $20M team for 18 of their 22 starters!
- For the bottom of the 2-deep, they aren't making significantly more than the team's minimum. Pretty much any team can outbid any other team on their 2nd stringers.
What do you notice? Did you see an error with any of the analysis?
Here's the table:
| Player Number | KC Chiefs Salary (pct of team) | $20M budget | $10M budget | $5M budget | |
| 1 | 16.72% | $2,895,409.08 | $1,447,704.54 | $723,852.27 | |
| 2 | 12.19% | $2,110,180.91 | $1,055,090.45 | $527,545.23 | |
| 3 | 8.83% | $1,529,660.14 | $764,830.07 | $382,415.04 | |
| 4 | 8.76% | $1,517,142.18 | $758,571.09 | $379,285.54 | |
| 5 | 6.44% | $1,114,874.61 | $557,437.30 | $278,718.65 | |
| 6 | 4.96% | $858,257.86 | $429,128.93 | $214,564.46 | |
| 7 | 3.32% | $575,040.59 | $287,520.29 | $143,760.15 | |
| 8 | 3.14% | $544,206.05 | $272,103.02 | $136,051.51 | |
| 9 | 2.33% | $403,064.80 | $201,532.40 | $100,766.20 | |
| 10 | 2.11% | $365,105.08 | $182,552.54 | $91,276.27 | |
| 11 | 1.97% | $341,786.13 | $170,893.07 | $85,446.53 | |
| 12 | 1.72% | $298,562.01 | $149,281.01 | $74,640.50 | |
| 13 | 1.59% | $275,137.99 | $137,568.99 | $68,784.50 | |
| 14 | 1.54% | $265,901.66 | $132,950.83 | $66,475.42 | |
| 15 | 1.53% | $265,128.60 | $132,564.30 | $66,282.15 | |
| 16 | 1.47% | $254,670.92 | $127,335.46 | $63,667.73 | |
| 17 | 1.36% | $234,710.44 | $117,355.22 | $58,677.61 | |
| 18 | 1.32% | $228,451.50 | $114,225.75 | $57,112.87 | |
| 19 | 1.21% | $210,133.68 | $105,066.84 | $52,533.42 | |
| 20 | 1.19% | $206,820.90 | $103,410.45 | $51,705.22 | |
| 21 | 1.13% | $196,164.81 | $98,082.40 | $49,041.20 | |
| 22 | 1.06% | $184,201.69 | $92,100.85 | $46,050.42 | <--- cutoff for starters |
| 23 | 0.90% | $156,473.63 | $78,236.81 | $39,118.41 | |
| 24 | 0.72% | $124,762.21 | $62,381.11 | $31,190.55 | |
| 25 | 0.68% | $117,355.22 | $58,677.61 | $29,338.81 | |
| 26 | 0.62% | $107,644.78 | $53,822.39 | $26,911.20 | |
| 27 | 0.58% | $101,121.08 | $50,560.54 | $25,280.27 | |
| 28 | 0.55% | $95,455.25 | $47,727.63 | $23,863.81 | |
| 29 | 0.55% | $94,666.55 | $47,333.27 | $23,666.64 | |
| 30 | 0.53% | $91,345.08 | $45,672.54 | $22,836.27 | |
| 31 | 0.53% | $90,931.91 | $45,465.96 | $22,732.98 | |
| 32 | 0.52% | $90,167.93 | $45,083.96 | $22,541.98 | |
| 33 | 0.52% | $90,094.78 | $45,047.39 | $22,523.69 | |
| 34 | 0.50% | $86,282.84 | $43,141.42 | $21,570.71 | |
| 35 | 0.48% | $82,539.84 | $41,269.92 | $20,634.96 | |
| 36 | 0.46% | $79,975.24 | $39,987.62 | $19,993.81 | |
| 37 | 0.45% | $78,610.55 | $39,305.28 | $19,652.64 | |
| 38 | 0.45% | $77,063.26 | $38,531.63 | $19,265.82 | |
| 39 | 0.45% | $77,063.26 | $38,531.63 | $19,265.82 | |
| 40 | 0.42% | $72,539.37 | $36,269.69 | $18,134.84 | |
| 41 | 0.42% | $71,977.87 | $35,988.93 | $17,994.47 | |
| 42 | 0.41% | $71,586.69 | $35,793.34 | $17,896.67 | |
| 43 | 0.41% | $71,586.69 | $35,793.34 | $17,896.67 | |
| 44 | 0.39% | $68,101.86 | $34,050.93 | $17,025.47 | <--- cutoff for 2 deep |
| 45 | 0.37% | $64,219.36 | $32,109.68 | $16,054.84 | |
| 46 | 0.37% | $63,856.58 | $31,928.29 | $15,964.14 | |
| 47 | 0.37% | $63,241.40 | $31,620.70 | $15,810.35 | |
| 48 | 0.36% | $62,328.61 | $31,164.31 | $15,582.15 | |
| 49 | 0.36% | $62,198.27 | $31,099.13 | $15,549.57 | |
| 50 | 0.36% | $62,198.27 | $31,099.13 | $15,549.57 | |
| 51 | 0.27% | $50,000.00 | $25,000.00 | $12,500.00 | <--- if %s were still used, player 51 and 52 would be below the $50k minimum |
| 52 | 0.11% | $50,000.00 | $25,000.00 | $12,500.00 | |
| 53 | $50,000.00 | $25,000.00 | $12,500.00 | <---- these salary numbers continue down until the 105 player limit is reached |
