Scorecasting (28 page)

At the
Dallas Cowboys’ team headquarters in spring 1991, a sense of optimism was leavened with a sense of unease. The most iconic franchise in the NFL had recently been sold to a swashbuckler from Arkansas,
Jerry Jones. Just as Jones had made a fortune in the oil and gas business by taking bold risks, he’d leveraged his entire net worth to buy the ’Boys in 1989 for $140 million—$65 million for the team and $75 million for the stadium. Jones paid $90 million in cash and borrowed the rest against personal assets. His interest payments were $40,000 a day. His banker told him he was nuts. His father told him the same thing, but hey, this was the Dallas Cowboys.

The beginning of the Jones regime did not portend greatness. One of his first acts was to fire the longtime coach, the legendary and dignified
Tom Landry, and replace him with his polar opposite,
Jimmy Johnson, a brash (if notably well-coiffed) renegade who’d never coached in the NFL. He was fresh from a spectacularly successful, spectacularly controversial tenure at the University of Miami. Johnson was an old teammate and running buddy of Jones’s from their days at the University of Arkansas, and that counted for plenty. Jones conferred full
football decision-making
powers on Johnson, forcing out
Tex Schramm, the only president the Cowboys had ever employed and, as his name suggests, a man with deep roots in the state. Worst of all, the Cowboys put a rotten product on the field, winning just 8 of 32 games in Jones’s first two seasons as owner.

As is so often the case for sad-sack teams in the socialist world of team sports, hope for the Cowboys came in the form of draft picks. The best picks go to the worst teams, though this can be fool’s gold. In 1991 Dallas held a Texas-sized helping of selections: ten picks in the first four rounds, five in the first round alone, including the very first pick. When Johnson crowed, “We’re dictatin’ this whole draft,” he wasn’t met with much resistance. But if this draft had the potential to be a turning point for the franchise, it also had the potential to be Jones’s personal Waterloo: You picked early and often and you still couldn’t turn the franchise around?

Reflecting the new owner’s passion for speculation, Dallas traded more than any other team in the league. In the 26 months since Jones had bought the team, the Cowboys had made 29 deals, including the infamous “Herschel Walker trade” with the
Minnesota Vikings, an 18-player swap that was less a transaction than an act of larceny. In exchange for the aging Walker and four modest picks, the Cowboys received a bounty of five players plus eight future picks. Two decades later, this still stands as a benchmark for lopsided trades. It ended up paying substantial dividends for the Cowboys in the years to come, but Johnson recalls that at the time it made other teams wary of doing business with the Cowboys for fear of getting similarly scalped.

However, with their stockpile of selections, it was logical to assume that on draft day other teams would offer to trade picks. That created a problem: With the clock ticking, how was Johnson to know whether he’d be better served to entertain the offer of swapping, say, one of the team’s third-round picks for Green Bay’s fifth- and seventh-round picks? “I can’t assess value that fast,” Johnson complained at a predraft meeting among Dallas executives. “No one can!” There were nods all around.

Mike McCoy, a Cowboys executive and minority owner, piped up: “Let me see what I can come up with to fix that.”

In 1981, McCoy, then an Arkansas petroleum engineer, had partnered with Jones to form the Arkoma Production Company. Jones made the deals, and McCoy was the driller. As
Inc
. magazine once put it, they perfected a low-risk strategy of drilling holes that other companies suspected were fertile but wouldn’t commit to exploring. The success rate on “wildcats”—speculative wells that come cheap but seldom yield a payoff—is around 5 percent. According to
Inc.
, Jones and McCoy struck 2,000 wells and made money on more than 500 of them. In 1986, a state-run gas company in Arkansas, Arkla, bought Arkoma for $175 million. (Aside:
Sheffield Nelson, the former head of Arkla, ran for governor in 1990 and lost to the incumbent—an ambitious Democrat named
Bill Clinton—in part because of questions surrounding the generous payout he authorized to Jones and McCoy.) When Jones purchased the Cowboys, McCoy joined him. Jones, after all, often referred to McCoy as “one of the brightest minds I’ve ever been around.”

This business of trying to quantify draft picks? As McCoy saw it, he’d spent his entire life solving numerical puzzles and trying to tilt the odds in his favor. This was simply another application. He recalls thinking to himself: “How hard could this really be?”

Not hard at all, it turned out. McCoy asked Dallas’s player personnel department for a list of all the NFL trades that had been conducted on draft day going back four years. He assigned an arbitrary point value to the first pick in each draft round and then used all the prior draft trades to refine the relative values of every pick. As McCoy recalls, “The point was to create a graphical depiction of how the NFL valued draft picks, based upon their own actions—not how they should have been valued.”

McCoy didn’t make any subjective judgments; he simply took the existing information and plotted the data points. After two days of “fiddling” (his word) and plotting picks on a graph, he presented a chart that assigned a numerical value to every draft position. “It was basically a price list,” McCoy says. “It was what
Walmart would do, only with football players, not jeans or toothpaste.” The first pick of the first round was worth X. The last pick of the last round—known as Mr. Irrelevant—was worth only Y. A sample of the point totals appears in the table below.

According to the chart, the value of the first pick in the draft (3000) was equal to the combined value of the sixth pick (1600) and eighth pick (1400) but more than that of the final four picks of the first round (640 + 620 + 600 + 590 = 2450) combined.

McCoy is quick to admit that it was a crass calculation, hardly built on rigorous econometrics. But armed with the chart, the Cowboys approached draft day in 1991 with supreme confidence. Whenever a trade offer came over the transom, they’d simply consult their conversion chart, make a few calculations, and determine whether it was worthwhile. If it was “below the line,” it was best to pass; above the line, it was probably a steal. After using the first pick of the first round to select
Russell Maryland, a defensive tackle Johnson had once recruited to the University of Miami, Dallas traded two of its first-round selections. They wheeled, they dealed, they took 17 players in all (including three eventual Pro Bowl players); by the time the weekend was over, the Cowboys’ inner sanctum was drunk with confidence. Draining a few bottles of beer, Johnson told an embedded
Sports Illustrated
reporter, “We’ll be good; big-time good. There’s no doubt in anybody’s
mind here.… I couldn’t care less what the people out there think of us.”

Sure enough, in the ensuing years, the Cowboys gained back the aura of America’s Team. The Blue and Silver mystique returned as Dallas won three Super Bowls over the next five years.

The franchise’s turnaround was due in no small part to the Cowboys’ exceptional success on draft day. In the five years after the unveiling of the chart, Dallas selected 15 starters and five Pro Bowl players. “It got to the point,” says McCoy, “where teams were afraid to trade with us.” Jerry Jones soon began referring to the chart as Dallas’s secret weapon.

There were ancillary benefits as well. Using McCoy’s bible, the Cowboys were able to identify other teams that consistently overpaid for talent. “Those were the teams we wanted to call!” says McCoy. In 1999, for instance, the
New Orleans Saints famously traded eight draft picks, including all their 1999 selections, to the
Washington Redskins in order to draft
Ricky Williams with the fifth pick in the first round. At least according to the values of the chart, New Orleans had overpaid to comical proportions, and this did not go unnoticed in the Cowboys’ war room.
^*
Note to self:
Trade with New Orleans whenever possible
.

It was probably inevitable, but the Cowboys’ secret weapon didn’t stay secret forever. With the Cowboys winning so prodigiously, it was only natural that their coaches and coordinators would attract the interest of other teams. Before
Dave Wannstedt went to coach the Chicago Bears or
Norv Turner took the head job with the Washington Redskins, they made sure to grab a copy of the franchise’s sacred text as they packed. Dallas scouts and front office employees also took the chart with them as they decamped for other teams. Within a decade, most, if not all, teams in the league had a purloined copy of McCoy’s creation.

In 1996, Jones bought out his buddy McCoy, though to this day the two remain close friends and business partners in natural gas ventures. By then the Cowboys were worth $300 million, more than double Jones’s purchase price. (Today, Wall Street values the franchise at close to $2 billion—more than 12 times what Jones paid.) Now an investor in Dallas, McCoy chuckles when he considers the legacy of his creation. “I guess it leveled the playing field and made trading easier because everyone could point to the chart and cover their butt,” he said. Then he added forlornly, “But after a while, you couldn’t [fleece] other teams the way we used to.”

Or could you? After all, McCoy’s creation was an artifact of what teams
did
, not necessarily what they
should do
. The chart provided the average value of draft picks based on actual trades teams made, and so the Cowboys could tell whether a certain trade was above or below the average value other NFL teams placed on those players. But what if the average value teams placed on draft picks was wrong? Sure, every team now had a copy of the chart, but few teams double-checked McCoy’s valuations or updated them in accordance with salary cap changes or, more important,
the performance of the actual picks
. Did anyone stop to check whether the number one pick
really was
more than twice as good as the number eight pick, as the chart dictated? No. “We’re football guys, not math majors,” said one executive. “We’re all using this document that a buddy of Jerry Jones put together using picks in, like, the late eighties? Now that you put it like that, it’s probably not so smart.”

Definitely not so smart, at least according to two prominent behavioral economists who studied the NFL draft. In 2004, Richard Thaler, a professor of behavioral economics at the University of Chicago, and
Cade Massey at Yale were watching the NFL draft. With the first pick, the
San Diego Chargers chose quarterback Eli Manning, the brother of perhaps the best quarterback in the league, Peyton Manning, and the son of longtime NFL quarterback Archie Manning. The New York Giants held the number four pick and were in the market for a premier quarterback as
well. It was no secret they coveted Manning and thought he was the best prospect.

As the estimable Peter King from
Sports Illustrated
reported at the time, during the 15 minutes the Giants had to make their selection, they were ambushed with two very different options. Option 1 was to make a trade with San Diego in which the Giants would first draft
Philip Rivers—considered the second-best quarterback prospect in the draft—and then swap him for Manning
plus
give up their third-round pick (number 65) that year as well as their first- and fifth-round picks in the 2005 draft. Option 2 was to trade down with the Cleveland Browns, who held the seventh pick and also wanted a quarterback. At number seven, the Giants probably would draft the consensus third-best quarterback in the draft,
Ben Roethlisberger. In exchange for moving down, the Giants would also receive from Cleveland their second-round pick (number 37) that year.

The Giants chose the first option, which meant they effectively considered Eli Manning to be worth more than Ben Roethlisberger plus
four additional players
. It turns out that this matched the chart perfectly.

To the two economists, however, this seemed like an extraordinarily steep price. They wondered whether perhaps the circumstances were exceptional; perhaps Manning’s extraordinary pedigree reduced risk and made him a special case. But after collecting data from the NFL draft over the previous 13 years and looking at trades made on draft day as well as the compensation—salaries plus bonuses—paid to top picks, they found that the Manning trade was anything but unusual. As a matter of routine, if not rule, teams paid huge prices in terms of current and future picks to move up in the draft. They also paid dearly for contracts with those players.

In Manning’s case, not only did he effectively cost the Giants four other players—one of whom turned out to be All-Pro linebacker
Shawne Merriman—he was also given a six-year $54 million contract. Compare this to Roethlisberger, ultimately drafted
eleventh by the Pittsburgh Steelers, who received $22.26 million over six years. Massey and Thaler found that historically, the number one pick in the draft typically is paid about 80 percent—80 percent!—more than the eleventh pick on the initial contract.