Cam Newton faces off against Peyton Manning in the Super Bowl Sunday and is widely expected to win the NFL’s Most Valuable Player award Saturday night at the NFL Honors show, but it is Tom Brady who is actually the NFL MVP. At least Brady should win from an economic perspective when you consider on and off-the-field contributions.
No Super Bowl for Tom Brady this year, but by one metric he is the NFL’s most valuable player.
For much of the time that professional sports have been played, value has been primarily determined by how a player performs on the field. Yet, sports organizations are businesses and no sports league is bigger than the NFL with $12.4 billion in revenue this season. Most businesses are judged by how much money they generate and people in those businesses are often measured by how much they contribute to the top and bottom line. In sports, winning is important to driving economic success. However, it is not the only factor.
That is why we developed the Revenue Above Replacement (RAR) metric for my company, Block Six Analytics. For the past three seasons, we have examined how each NFL quarterback has driven revenue for their respective teams. More specifically, we look at how quarterbacks enable teams to generate money from ticket, media, sponsorship, and merchandise sales revenue on both a national and local basis.
This includes looking at a player’s ability to perform during games over a replacement level performer. Replacement level refers to a player who can perform a minimally acceptable level for that position. In football, consider a replacement level quarterback to be a team’s third-string or practice squad quarterback. Off the field, we look at factors such as television ratings, social media audience size, and jersey sales to determine a player’s individual contribution to a team’s revenue.
For the 2013-14 seasons, Manning led our RAR ratings. This year, however, Brady raced past Manning and all other quarterbacks. He generated $92.9 million in total revenue for the Patriots. Despite making the Super Bowl, Manning had his worst RAR generating season, adding only $31.6 million in revenue for the Broncos and falling to eighth in our rankings. Manning’s decline can almost entirely be attributed to his on field performance where he added negative value during the year. Newton also galloped past Manning in our rankings. The Carolina Panthers quarterback is number six on our list by generating $36.4 million in total revenue.
The Seattle Seahawks rewarded quarterback Russell Wilson with a four-year, $87.6 million contract in July. The deal paid $31.7 million this season, but Wilson still provided great value for Seattle. Wilson generated $85.4 million in total revenue for the Seahawks under our model and netted the team $53.7 million in value (total revenue minus cash payouts last year). The Redskins’ Kirk Cousins thrived in Washington this year and generated almost $27 million in total revenue despite a salary of only $660,000 this year.
Johnny Manziel has been in the headlines for all the wrong reasons this week. Manziel generated $15.7 million in total revenue for the Cleveland Browns and $14.9 million in net value – all of which came from his off-field “efforts.” Manziel ranked No. 20 on our RAR list and ahead of quarterbacks such as Andrew Luck, Jameis Winston and Teddy Bridgewater for the 2015 season. Manziel also shows how decisions about RAR cannot be made in vacuum. Just as a team should not solely look at a player’s on-field performance, a team should not consider a player’s value based on revenue contribution alone.
Manziel, Manning, Brady and Wilson show that NFL teams can evaluate quarterbacks in the way that other companies evaluate talent. Quarterbacks will always be one of the most important players on a NFL team. Now we have a better idea of just how valuable they are in a given year.