Winning Outcomes - Quarterback Compensation [Post 37]

NFL fans have long debated whether having a quarterback on a rookie contract gives that team an edge (compared to paying top dollar for an elite veteran quarterback). To explore this, I analyzed data from the past five seasons (2019-2023), creating a scatterplot that tracks the top 100 highest-paid quarterbacks each season. I noted the quarterbacks who competed in the Super Bowl for each season, marking the winners in yellow.

Data source: https://overthecap.com/position/quarterback

What were my takeaways from this analysis?

1. Elite Talent Wins: Patrick Mahomes and the Chiefs are undeniably good at football, no matter the cost (and the same goes for Tom Brady and Matthew Stafford with their respective teams).

   
   

2. Top Dollar Isn’t Necessary: You don’t need to be paying your quarterback the highest salary to reach the Super Bowl.

   
   

Why do we see the 2nd trend? If the best quarterbacks command hefty salaries, why do many Super Bowl contenders feature less expensive quarterbacks? The answer is rookie contracts.

A rookie contract allows teams to acquire top talent at a fraction of the cost. For instance, the quarterback matchup for the 2023 Super Bowl featured Patrick Mahomes earning around $37 million vs Brock Purdy who was paid just $889,000 [1]. While Mahomes is exceptional, is he worth 41 times more than Purdy? The gap is likely much smaller.

The Takeaway: There are generally two strategies. You can invest heavily in a single high-caliber player and hope they deliver, accepting the risk that if they underperform you will have a several million-dollar liability on your roster and hopes of a Super Bowl ring down the drain. Alternatively, you can distribute your resources more broadly, relying on multiple smart decisions to achieve success like investing in your offensive line and key defensive players. The second approach mirrors real-life decisions where diversifying and managing risk can lead to more stable and sustainable success. Finding generational opportunities are few and far between and are often only identified in hindsight.

Works Cited

[1] Overthecap.com. “Quarterback Contracts and Salaries.” Over the Cap, overthecap.com/position/quarterback/2023.