hanson.wtf – Page 3 – a blog?

On the Exploitation of Millionaires

July 26 2023

/

American Football, Money

Running back value is at an all time low. The best backs in the league aren’t getting long contract extensions, and very good backs are let go for nothing, then sign short terms contracts worth 1/10th of what their quarterbacks get paid. This is partly due to the sheer supply of new blood in that position, that you can get 90% of the same production for 1/10th of the cost. But this is not the free market at work, but rather the rational outcome of the economic system set up by the NFL so that billionaires can exploit millionaires.

American pro sports has evolved to be a money generating machine where profit is virtually guaranteed due to the pinning its largest expense – player compensation – to a percentage of sports-related revenues. This is similar to the wage cap being implemented in UEFA competitions in the coming years, the biggest difference is that in American sports, the cap is the same for all teams and calculated based on league revenues, so you don’t have the built in competitive imbalance (beyond local tax structures) that the UEFA system has where teams that make more money can spend more money.

NFL, Exploiter Supreme

In America, no league has been able to squeeze the players more than the NFL. Whereas all other leagues have guaranteed contacts (i.e. the terms of a contract is binding and will always been paid out regardless of injury or performance, unless there’s a material breach or a buy-out is negotiated), NFL teams can release players without fulling their end of the bargain at a whim. It’s absolutely wild for that to be a thing for a sport rife with major injuries that can derail or end careers on the field. But the NFL Players’ union doesn’t have enough leverage to wait out the owners, as the earning window for American football players are so narrow, withholding labour for a year plus is a hard-sell for much of the rank-and-file who don’t have a lot of time in the league.

This brings us to the running back, a position that is crucial for entertaining the fans as well as making the team successful on offense. Running backs are some of most dynamic, explosive players on the field, so-called “weapons” that can devastate the opponent with their speed, power, and agility. Unfortunately, the position is also one that is stocked with viable replacements for star players. The likes of Walter Payton, Barry Sanders, and Marshall Faulk may be the stars of their day and got paid as such, but if they were still playing, they’d be the ones that are disproportionately hurt by the current economic system in the NFL.

Thanks to a combination of age restrictions, maximum rookie contracts (i.e. caps for how much new players to the league can earn each year), and the franchise tag (i.e. designations that prevent out of contract players from signing with any team by forcing them to accept a salary that is relatively high *for the position*), the system artificially restricts the earning power of players up to their first seven years in the league. Unlike most positions, this happens to be the physical prime of running backs due to physical nature of the position, and the tolls their bodies take from being literally pounded into the ground 20-25 times each game. What this means is that other than for some truly special players, the best years a running back has to offer are the ones in which their wages suppressed, which is a wild and unfair paradox.

This is why neither Josh Jacobs, the NFL’s leading rusher last year, nor Saquon Barkley, the New York Giant’s best offensive player, were able to come to an agreement on long contract extensions this off season. Barkley is reportedly signing a 1-year deal for a bit over the value of the tag, which is probably the most he can get. Despite his importance to the team, he’s projected to be paid only the 6th best. So even for the best players at the position, ones that are centrepieces of their teams offenses, they can’t get commitments from teams to pay them at the top of the market, which is falling as a result.

The Name of the Game is Efficiency

From the team’s perspective, this is entirely rational given the economic system in place. When you have a hard salary cap, it’s important to allocate resources efficiently, and the marginal gains from having a superstar running back instead of a rookie or cheap free agent is just not going to be worth the opportunity cost of being able to reallocate the excess cap room elsewhere on the roster. The risk of forgoing a known quantity to go with a cheaper alternative makes sense given the large amount of cap space that can be saved. And that’s not counting the high rate of injury that can torpedo a running back’s entire season, costing a team that player anyway.

In a capped league, the name of the game is “excess value” – that is, getting more value from players than what you are paying them. In other words: exploitation. Rookie contracts are the best way of doing that: you get to have superstars on the field, but only pay them a predetermined, suppressed wage not based on how good they are, but where they were drafted. The idea for the players is that when these rookie contracts expire, the ones that have a demonstrated track record of high performance can sign big free agent deals and get paid what they are worth then.

Barring injury, this generally works out OK for the players. Most of them get their second contracts in their prime at pretty close to market value, when they are in their mid to late 20s, and teams are willing to pay higher salaries in exchange for reducing the risk of not getting the production they are paying for. Players that get franchise tagged will make the mean salary of the top 5 highest paid players at that position (for the first year) or 120% of their previous salary, whichever is higher, so they are guaranteed to be compensated in line with the highest paid at that position while on the tag. They may not get the long term guarantees they want, but at least they’ll be paid like a star during the time they are on the franchise tag, and they can sign that long term deal a year (or two) later and still get paid.

But for running backs, their production falls off much quicker than for other positions, as their prime get mostly used up during the time their wages are suppressed. When their rookie deals expire, teams are unwilling to commit to more than a year or two to them because they (rightly) fear their production will drop off. And if they are franchise tagged, the wage they get won’t be that high relative to other positions given that no running backs make a lot. It’s a vicious circle that ensures that players who play one of the most exciting positions in American football don’t get fairly compensated for the value they bring to fans.

Old school analysts bemoan the devaluing of the running back and blame analytics for figuring out that drafting them high and signing them to hefty contracts is inefficient given the expected performance drop off starting in their late 20s. But the real blame goes to the league (and the union) for allowing such a financial structure to be created and maintained where it objectively rarely makes sense to pay even Hall of Famers the kind of money they arguably deserve. Simply put, the system is broken if the franchise tag value for a running back is the lowest of all non-special team positions.

With the current setup, teams are given the incentive, due to wage suppression, to make bets on young, unproven players because of the potential excess value they can get. Even if you sign a known quantity in free agency, the one thing you’re unlikely to get is more than what you pay for, even if you sign superstars (because you’ll be paying them superstar salaries). Until the incentives change (e.g. eliminating the rookie wage scale), teams will always favour young players because you don’t have to pay according to talent or expect performance – and running backs, being largely replaceable and having short shelf-like, will suffer disproportionate as a result.

The lesson to be learned here is that putting restrictions in place in terms of how money within a system is distributed, like a salary cap and limits on how much young players earn, can have unexpected and undesirable effects, creating winners and losers that may not be obvious at the get-go. Did the league and union collude to suppress running back pay? Probably not, but what’s done is done and now, it’s hard to reverse given that the total amount of money the players get is fixed. So the real lesson to be learned is this: be really careful when you do something that is hard to undo.
On Sarr and An Opportunity Lost

July 23 2023

/

Football, Watford

It looks like Ismaila Sarr’s time at Watford is about to come to an end. It was probably at least a year too late, but whatever fee the club can wrangle from Marseille or whoever, it’ll be best for all parties to get this done. Getting his wage off the books and getting something for his registration will speed up the rebuild/loan repayment process and perhaps allow us to invest in other areas of the squad, even if it’s just opening up some room in the wage budget. For him, going to a club playing in Europe next season, one that should know how to use a pacy winger with a bit of specialness, can hopefully get him back to playing his best and reach that next level many of us believed he could when he first pulled on a Watford shirt.

Out wide in space with the ball at his feet, Sarr can be devastating. He has made many Premier League and Championship left backs look silly with his dribbling, his pace, and on occasion, his finishing. Once he gets around you, all you can do is foul. Most people remember the brace against Liverpool that ended their super-long unbeaten league run, but there were many more. While fan sentiment around him soured in the last couple years because of his consistency and perceived lack of effort (the latter I don’t agree with), the high highs he had playing in yellow cannot be denied.

Sarr was an exciting player when we signed him, and I think he’s still got that in him if he’s played in the right system. But from the very beginning, he was the wrong player for us. An out and out winger like him did not fit Javi Gracia’s system, nor really any of the (many) head coaches’ that came after. He didn’t often play out of position, per se, other than when he was asked to play centrally as a lone striker, but the roles he was given and the tactics he was playing under didn’t utilize his skillset optimally.

Like the Liverpool match, his time with us was a mixed bag overall. We lost Gerard Deulofeu to a season-ending injury in that massive win, which I still think was the difference between relegation and survival for us that year. Sarr, while giving us some genuinely electrifying moments, can also be seen as an inflection point that changed the course of the club. With the margins between 17th and 18th being so fine, what would have happened if we had gotten greater value from the investment we made in him? Rather than spending that sum on a puzzle piece that didn’t quite fit, what if we had instead brought in another player (or three) that bolstered other areas we were lacking?

Oh, the Opportunity Cost

A club like Watford does not have a lot of money to spend on transfer fees. While the TV money from the Premier League was very nice, once a club establishes itself in the division, most of it will need to go to wages. After the first few seasons where the wage-to-turnover ratio is still reasonably low and there’s excess cash for transfers, the bulk of the money to bring in new players after that have to come from (additional) owner investment, profit from selling existing players, or loans, deferrals, and other means to increase the funding available to the club. Some time before Sarr was brought in, Gino invested an additional £35M into the club so we can continue upgrading the squad. Without this, there would’ve been no money for Sarr.

Look. I understand that not all transfers are going to work out. Players we buy will not always perform at the level we expect them to. Sometimes, our scouting is just going to be wrong. But the least we can do is spread out our risks and only buy players whose skillsets and positions match the style we want to play. With Andre Gray, at least the intention of buying a striker was correct, even though the player did not play at a level commensurate with his cost. With Sarr, not only did we put all our eggs in one basket, we didn’t even really like eating eggs. It was wrong-headed from the start.

Sarr the player arguably matched the scouting and merited the fee we paid given his age, especially in that first year. But it’s like buying a Ferrari for city driving – it looks cool, but we really couldn’t fully utilize its power. It wouldn’t matter if we were Man Utd, Arsenal, or a big side with more money to spend. For us, that was our one big bullet. Spending all that on him meant other areas were neglected. It’s like using all of your disposal income for a year to buy a car – even if it works as well as advertised, you’ve used up all your money and can’t do all the fun stuff you were planning to do with the car, so you end up just using it to go buy groceries. But hey, those trips are shorter now!

The opportunity cost of bringing Sarr in – tying up so much money on a player in a position/role we arguably can’t get full value from given the head coach in place – prevented us from reinforcing in other areas. That creaky defense, other attacking players that better fit Javi’s 4-2-2-2 system, a goalkeeper who is better at distribution, etc. – I suspect we could’ve gotten the extra point and goal difference needed to get us to 17th that year had we utilized that money in other ways. Even if that weren’t the case, our squad overall would’ve been stronger with other positions fortified. We might have actually stood a chance of staying up after we got promoted again.

Bah. We could talk what-could-have-been all day, but the real failure was in the process. Even if we weren’t relegated in 19/20, Sarr would’ve still been the wrong player to bring in at that time for that fee. It’s one thing to buy opportunistically regardless of position when you’re dealing with South American teenagers who aren’t expected to contribute right away (and who don’t cost £30M). But if you’re buying for the present, breaking your transfer record fee by over 50%, it’s really odd to spend that on a player who doesn’t tick all the boxes, the most important being whether he fits in with your current squad’s needs.

You can even say that for a club with our budget, spending that much on a single player is risky and inefficient even if he were the perfect fit. Making multiple smaller bets creates a higher floor in terms of expected value, defusing the risk among several players, and likely avoiding the boom-or-bust extremes of making such a large wager on a single player.

To me, the purchase of Sarr – once again, a player that I rate – has been Gino’s biggest mistake thus far in his tenure as the owner of Watford Football Club. The opportunity we squandered to more evenly and appropriately strengthen the squad while we were still doing well in the Premier League might not be one we’ll have again in a long time, given how well-funded and well-run many of the clubs outside the (financial) top six are these days. Even if Gino’s strategy works to perfection, buying young and selling high, we will at best have a puncher’s chance of going up again. And to stay up for more than a year? It’ll take a near miracle.

We had our chance to entrench ourselves in the Premier League, but we lost it. But hey, at least the car was fun to drive!
On Listening to Music at 42

July 21 2023

/

Music, Navel-Gazing

When I used to blog heavily circa the early/mid-2000s, it was mostly about music. I would come back from a show at 1AM or whatever and then spend an hour talking about what I just saw. Openers described in detail, audience assessments (often about how Vancouver doesn’t support bands that I liked), and usually how awesome the band that I went to see was. Words like “angular” and “melodic” punctuated what was often a semi-factual first person account that was riddled with typos.

I would see so many bands each year. At my peak, I averaged about 40 gigs a year. I would drop by the record stores every Tuesday at lunch to pick up new releases (Scratch used to be my fave), scooping up 3 to 5 thanks to the new-found riches from a full time job. It was a great time to be around and paying attention to new music, when exciting indie bands were mainlined to you via this new ecosystem created by the internet, eventually leading to many breaking through to the mainstream.

This was in an era when the word “indie” still had meaning – as in their recordings were released on an independent record label that may not have the distribution reach and publicity machine to promote and sell records. The internet, with sites like Stereogum, PopMatters, and Pitchfork, plus reams and reams of blogs, narrowed that gap, helping build buzz for bands whose previous hopes for a media bump was the cover of CMJ, Magnet, or Paste, maybe a feature in Spin if they’re really lucky.

When the likes of the New Pornographers, Broken Social Scene, Arcade Fire, Metric, Stars, Final Fantasy, and Feist broke out in Canada, it was helped in no small part by online fawning, of which I was the tiniest of a part. I would do album reviews, gig reviews, and lament about how bands that I love continually get overlooked, not by the mainstream, which was a given, but by indie tastemakers who always seemed to favour brooding male-fronted bands. Rilo Kiley, Azure Ray, Mirah, all those twee bands – they never got their flowers as far as I was concerned. I especially hyped up local(ish) bands like Maplewood Lane, the Organ, and Immaculate Machine given there weren’t many blogs in Vancouver that talked about music. There was also this one local band that I would bemoan all the time because they opened for touring acts a lot, and I always found them boring. Their identity will be left as homework for the reader.

I was around at the beginning of the hype cycles. I was there for Interpol’s Vancouver debut at a sold-out club that maybe fit two to three hundred people – I didn’t see most of the set but that’s another story. I discovered the wonderfulness of the National only because they opened for the super-hyped Clap Your Hands Say Yeah. I saw the Killers open for stellastarr* at Richard’s on Richards in like 2004. I saw Death Cab for Cutie many times before Seth Cohen dropped their name on the OC, even gave them mediocre vegetarian food recommendations before their gig at the aforementioned Richard’s. I can go on. You know how we old people are like.

Suffice it to say, in my 20s, music was central to my life, and I was there before most were. That was largely due to the amount of free time I had in additional to the hardcore fixations folks at that age had. These days? I barely keep up with new music from folks I already liked. I do discover new bands now and then, but that’s more or less by osmosis than the active seeking-out I was doing back in the day.

Music, Now

I have a different relationship with music these days. When 90% of my time at work was spent coding, music would be playing constantly because that’s the kind of work I can do while the new Au Revoir Simone was (softly) blasting in my ears. Now, I do much more non-coding work that requires more concentration, which is not conducive to having music passively playing in the background. This results in fewer overall spins, which means new music get deprioritized. Further, as the roster of bands that I like get bigger, there’s just more volume to deal with. The aforementioned New Pornographers? I’ve only listened to their new record maybe twice through no fault of the material. I just don’t have time and there’s more to listen to.

So while I can no longer call myself a hardcore, I still do my best to support an industry that has brought me so much joy throughout the years. My show-going has dropped dramatically (going out at night while having 2 kids is… not easy), as have my overall spending. The convenience of streaming means that’s how I listen to music these days – though I know I am effectively no longer financially supporting the artists that I like anymore through listening to their music. As a result, I do try to buy as much merch, vinyls, and tickets as possible (even if I’m not sure I’m able to go). Anybody that make music that I like and has a Patreon (like Stars), I’ll subscribe to it. One day, I’ll give Torq or Amy that $1000 for a song commission…

I would say that even now, music is still a central part of my life – it’s just that as a percentage of time and attention spent, its magnitude has dropped. But unlike many hobbies and interests have fallen by the wayside or have been reduced to a minimal trickle (bye bye comics and video games, care-free travelling, and Whitecaps seasons tickets), I’m still listening to new music and going to shows, which is something. Maybe the fact that it’s still happening for me at 42 means I’ll die anticipating the 100th year revival of Lilith Fair? Yes, I plan to live that long. There’s too much good music for me to listen to for me to go that quickly.
Why I’m Doing This (Again)

July 17 2023

/

Navel-Gazing

I still like the positive aspects of social media. Making loose connections with like-minded folks that share my niche interests, getting pithy nuggets off that make me (and a few others) chuckle, and being exposed to random stuff that enrich my world view: all that is made much easier when I’m part of a follow-graph-based network that pushes content to me, feed-style.

But we are in the midst of an inflection point for social right now, and like many, I’ve been reflecting on its role in my life. I would say I’ve probably been affected more acutely than most in the upheaval, so much of the thinking and self-examination that others have been doing (e.g. should I still do Twitter now given *gestures wildly*?), I’ve already gotten past.

For me, it’s really about this: what am I getting from Twitter et al, and what am I *not* getting? If one of these Twitter clones take off, I’ll probably be on there, but I realized that there are things I haven’t been getting from Twitter that these other places also won’t give me: the space to stretch my thinking in written form. Tweet threads are fine for takes of various temperatures in bullet points, but the form is just inherently limiting for free-form exploration of ideas in text. It’s hard to really dig into anything meaty if you’re always having to worry about character count.

Doing Me For Me

I used to blog a lot in my 20s. I would mostly talked about music, sports, and other pop culture stuff. But really it was mostly music-related. To give you a idea of when, this was before Google bought Blogger. I had a lot more time on hands then – and a lot more things to say, mostly very specific thoughts about very specific things. As the amount of time I had shrank, social media kind of took on that role for me. I’m able to get my thoughts out, not spend too much time when doing so, and have even more folks read it than the few dozen page views I used to average daily. It seemed like a win-win.

But while socials is great for transmitting random thoughts to people who may or may not want to read them (thanks, algorithmic injection), I came to realize that that’s not really what I want most when I put my thoughts out there. OK, I want SOME people to be able to consume and give feedback on my brain dumps, but the ability to write them down and publish them in the form that best suits my verbose navel-gazing isn’t in 280 or 500 character chunks – it’s on ye olde web logs, under my own domain name, and in my own colours and layout, where I can go on as long as I want. I’m not doing this for other people: I’m doing this for ME.

Blogging (and its recent spin, newsletter-ing) is an inherently a selfish, self-serving, and self-absorbed activity. Some do it to get exposure, some do it to be part of a community, and some do it to make money, directly or indirectly. For me, and I suspect many others, it’s just a medium to express ideas and talk about things in detail that no one in their daily lives have the time or inclination to listen to pay attention to at the same level of detail. It’s a place for me to talk to myself that also happens to be public.

My primary objective for blogging is simply to get my ideas down and out of my head. My secondary objective is hoping that others, however few, find some value in those ideas. If that’s not the case, well, at least my primary objective is achieved. This is why I debated long and hard about what platform I should use, as some may lead to easier discovery and a better chance of gaining a bigger audience. But at the end of the day, I just chose something (Porkbun-hosted WordPress) that makes it easy for me to get something up relatively fast.

What You’ll Get

This blog is, uh, text-forward. It will touch on many subjects that I’m interested in. You can navigate it using the tag cloud and search functionality that you’ll find in various places on the site. You can even subscribe to it via RSS feeds. But I’ve time-boxed the amount of effort I’ll spend making it reader-friendly, not because I don’t want to make the site as easy for you all to access as possible, but… actually yeah that’s exactly why. At the end of the day, this is an extension of me: verbose, polymath-y, and a bit difficult. Take it as it is. Or don’t.

Back to that selfish thing: I’m here for me. I’d like you to come along too, but I’m mostly here for me. Just like my tweets, I expect to represent my view points here as authentically as possible, but I only claim as much authority as you choose to give me. If you think what I talk about is worth the read, please keep reading! If you think I’m full of shit, I probably don’t care? I am going to be as factual as I can be, but if you feel that I’m talking out of my ass, maybe you just shouldn’t read this. The only thing I’ll promise is that I’m going to be me, which is either an endorsement or indictment, depending on how you look at it.

But who really know what I’ll end up talking most about. Right now, I feel like work-related topics like Android Performance and data are going to take up a lot of space. I will likely talk about Watford a lot too, as well as the intersection of numbers and sports: money, analytics, salary caps, maximizing value, etc.. I know I’ll get into some culture/race related shit because that just occupies a lot of my brain cycles. Nothing will be off the table as long as I feel like it’s appropriate for me to talk about publicly.

So yeah, we’ll see where this goes. If nothing else, I’ve got a cool domain name.
On Moneyball and the Real Lessons Learned

July 12 2023

/

Baseball, Data, Money

The mystique around the 2002 Oakland A’s was built on the foundation laid by Michael Lewis’ excellent 2003 book Moneyball. In it, A’s GM Billy Beane, handcuffed by a cheapskate owner, had to use non-traditional techniques to identify and acquire players that other organizations undervalued. Namely, he and his team used data over traditional scouting to find good players who were not expensive because they had skills that were not valued. The movie of the same name took the hype to the next level, and soon the word “Moneyball” on everyone’s lips, beyond sports, beyond America, where it was used to describe anything from using data in decision-making to exploiting market inefficiencies to over-perform your budget.

As the term took off outside baseball, it kind of went out vogue within it, eventually displaced by the term analytics as a catch-all for using data in scouting, player development, and in-game decision-making. 20 years in, using data is no longer novel within baseball – it’s de rigueur. The same goes for other sports, where it’s not about whether or not data is used, but just how much. And while the likes of Bill James were doing statistical analysis long before Beane flopped as a Mets draft pick, it’s hard to argue that he (along with Lewis) brought it to a mainstream audience.

But here’s the thing: while Beane was notable for his use of On-Base Percentage as an undervalued metric for evaluating players, among other data-based revelations, and making Scott Hatteberg more famous than he had any right to be, his real secret weapon was wage suppression. All of the team’s stars were young players whose earnings were artificially suppressed because they were under “team control” – meaning they can’t negotiate higher wages or go to another team because their rights were held by the A’s.

The most egregious cases were the teams’ 3 young star pitchers, Mark Mulder, Tim Hudson, and Barry Zito, who made less than $2M combined that season, less than 5% of what was already a paltry payroll. While the A’s were able to improve on the margins cheaply because they valued walks as much as hits, the biggest reason for their success was the fact that their 5 best players – sluggers Eric Chavez and Miguel Tejada were the other two – made less than $8M combined that year. Without that level of extra value created by an unfair system, there was no way those A’s would’ve won 103 games that year with that payroll.

So the moral of the story is that just because something was seen to be groundbreaking, so much so that it changed multiple industries indelibly, it doesn’t mean the story behind the story is exactly like it was told.

Never Stop Never Stopping

When I first read Moneyball all those yeas ago, my first reaction was to find novel market inefficiencies everywhere so that I can exploit them in order to over-perform at whatever I’m doing. But it didn’t take long for me to realize that this was just not it. Even the idea of using data to find nuggets of insight that only you would know, that’s never going to last. If what you do is profitable, important, or otherwise interesting to other people, there will bound to be other really smart people out there trying to do exactly what you’re doing. It’s only a matter of time until everyone else catches up.

Special sauces might give you a head start in whatever field you’re in. It did for Beane – until the rest of the league caught up. OBP became properly valued and he and the A’s had to move on to a new thing. And when the rest of the league spun up analytics departments too, the A’s actually fell behind because they lack the resources to fully exploit the power of data. When you deal in the realm of knowledge, trade secrets can only take you so far.

So the lesson I landed on after properly digesting Moneyball is this: in order to create sustained success, you’ve got to differentiate yourself and never stop getting better. The only sustained competitive advantage in an information economy is non-stop innovation. Lead the field and let everyone else follow.

And on top of that, you have to take full advantage of the environment around you. I don’t want to use the word “exploit” because there is a moral line that I wouldn’t cross, but within reason, you have to leverage what’s at hand. For Beane, it’s about fully leaning into the collectively bargained agreement that MLB and the players’ union signed that allows for below-market salaries to be imposed on young studs – and staying away from inefficient contracts for free agents whose best are behind them. Only by combining those two strategies can you maximize your outcome.

Epilogue

For Billy Beane and the Oakland A’s, despite Moneyballing their way to some amount of regular season success, they never could quite make it over the line and win the World Series. There’s also a lesson there: just because you’ve maximized your potential, it doesn’t mean you’ll always achieve the kind of success you want. In addition to luck, sometimes your best just isn’t good enough, especially when you come up against folks that are also doing Moneyball things but have access to a lot more resources. Think the LA Dodgers in baseball, and Manchester City in football. But you have to be OK with that. You do the best you can and let the chips fall where they may. The only thing you can control is the process, and to judge yourself only by the outcome (which you can’t control) is shortsighted.