Optimizing the Allocation of Funds of an NFL Team under the Salary Cap, while Considering Player Talent
Thesis or dissertation
Date of this Version
Shane T. Jensen
Every NFL team faces the complex decision of choosing how to allocate salaries to each position while being limited by the salary cap. In this paper, we use regression strategies to focus on identifying what positions are worth greater investment under the assumption that players are paid in an efficient market. Using a combination of many univariate regression models, we identify that the positions at which it is worth investing in elite players are quarterback, guard, defensive tackle, and free safety. Additionally, we consider the possibility that markets are not actually efficient through separate regressions and detect that the optimal way to take advantage of inefficiency is through skilled drafting to find players who can provide significant win contributions early in their careers (since they are being paid the relatively low salaries of rookie contracts).
National Football League, linear regression, resource allocation, salary cap
Mulholland, J. (2016). "Optimizing the Allocation of Funds of an NFL Team under the Salary Cap, while Considering Player Talent," Joseph Wharton Scholars. Available at https://repository.upenn.edu/joseph_wharton_scholars/7
Date Posted: 10 August 2016