NFL Teams Leap Blindly Off Of the Coaching Cliff

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New Year's Eve was notable as the day that our Washington lawmakers struggled not to send the nation over the fiscal cliff. But Monday was also when many professional football owners decided to hurl their organizations over another sort of precipice, the coaching cliff. Experience shows that most of these owners were sending their outfits off into an abyss from which they will be lucky to emerge any time soon.

New Year's Eve this year was what is known in the NFL as black Monday, the first day after the end of the regular season, when owners who have decided to change coaches generally do their firing. This year, nine of the 20 teams that did not make the league's playoffs released their coaches and/or general managers on Monday, quite a mortality rate when you consider that a few more might still get the ax as owners continue to ponder their teams' futures.

Most NFL owners have a track record of success in other businesses, and a few of them run teams that have been in their families for generations. Neither background seems to guarantee success in big-time sports, where team executives often manage with their hearts instead of their heads. That approach rarely pays off on the field.

Back at the end of the 2011 season, Stephen Dubner at the Freakonomics blog took at look at 17 coaching changes in the NFL over a 10 year period. Teams had a collective winning percentage of .309 the last year of a coach's tenure, but did only marginally better the first year with a new coach, with a .358 winning percentage. Perhaps even more telling is that even that brief improvement disappeared for most teams, who eventually regressed to their previous mean. Only a very few organizations turn around completely under new coaches.

The risks of coaching changes in big time athletics seem to outweigh the rewards. A paper published this fall in the Social Science Quarterly looked at coaching changes over a 13-year period among elite college football programs, where 10 percent of coaches get axed every year, on average. The study found that poor teams recorded small but short-lived improvements in their records, and mediocre teams, that is, those that had been winning about 50 percent of their games, on average did worse with a new coach.

NFL owners in need of a coach will now debate with themselves whether they should hire someone from those elite college ranks. Rutgers University's John Maxymuk, author of a biographical dictionary of NFL coaches, looked at 356 coaching changes in the league since the 1950s. While only 11 percent of NFL coaches ever win a championship, he found, there's not much difference in success rates between college coaches brought into the league and those hired from NFL ranks. Among college coaches, 11 percent won NFL championships. By contrast, 12 percent of former NFL coaches hired to lead a new team eventually won championships.

The biggest losers seemed to be former winners. Of the 20 coaches who have previously won an NFL championship and then moved on to coach another team, only one, Weeb Ewbank, has won another championship.

The job is only getting tougher because of the league's labor agreement with its players, which places all sorts of restrictions on rosters, including a salary cap that limits the ability of a team to rapidly reshape its player rolls. Under those circumstances, firing the coaching staff becomes a kind of emotional release for an otherwise frustrated owner. Research published in the August 2012 edition of the Journal of Sports Economics found that the league's rate of coaching changes has accelerated since the NFL instituted a salary cap nearly 20 years ago.

NFL franchises are such visible and widely followed businesses that owners also find it difficult to manage them as they run their other businesses. The Giants' late co-owner Bob Tisch once told me that he thought that owning a television network (in his family's case, CBS) was a difficult task thanks to media attention, until he bought into the NFL and found a level of scrutiny beyond anything even he was prepared for.

That many NFL teams now boast new stadiums carrying heavy debt-loads also encourages the coaching merry-go-round. Although the league has among the best television contracts in professional sports, teams increasingly rely on local revenues from sources like seat sales to pay off their stadium debt. A winning team is obviously an easier sell. That many of these teams also charge a premium for seats at stadiums that were built at least in part with taxpayer subsidies also increases the pressure to put a winner on the field.

Still, most of the evidence suggests that the league's coaching carousel is a triumph of hope over experience.

Steven Malanga is an editor for RealClearMarkets and a senior fellow at the Manhattan Institute

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