The 80/20 Rule Explained

The 80/20 Rule is something you hear often from the Ravens executives in the context of their philosophy in managing personnel decisions.

The rule in a nutshell states, generally, that if the team can find 80% of a current player’s production from another player at 20% of the cost, the team will opt for the less expensive, less talented player.  The Ravens have employed it on numerous occasions, such as when they brought in Daryl Smith (1yr / $1.1M) for Dannell Ellerbe (5yr / $34.75M) when they were unable to retain him at their target price last year.

This is a concept that largely doesn't matter in other leagues, like Major League Baseball where rich teams can spend to their heart’s content.  Not so in the NFL where every team is strictly limited to the same $130 million salary cap.

Let’s take a look at what the 80/20 is and what it means in detail.

The 80/20 Rule is player valuation - not player evaluation

Player valuation is an important concept and is often confused with player evaluation - the two are related but distinct.  The 80/20 Rule is simply the Raven’s philosophy for conducting player valuation.  So what is the difference between them?

Player evaluation is the process of judging a player’s ability – scouting and coaching essentially.  This is the scouts and coaches’ bread and butter, but talented front office executives, like Ozzie Newsome, of course play a part in it, too.  So, for instance, a defensive back might be judged on his ability to play trail technique on a wide receiver.  A running back could be evaluated on his ability to pass block against top tier pass rushers.  These are important judgments because they factor into answering the question as whether the player can play at the NFL level and, better yet, be a starter.

Player valuation is the process of judging a player’s monetary worth relative to his peers and the overall market.  It has little to do with football at its core.  It has everything to do with understanding how that player’s talents fit into the NFL economy and judging how much to pay a player given the confines of a rigid salary cap.  Its economics, essentially, informed by the player evaluations that have been done on him.  This is what the front office must do well to keep their jobs.

Player valuation mistakes are the second biggest detriment to team success after failed drafting.  Bad deals cost a team in many ways in the short and long term.

The 80/20 Rule is like the Pirate Code – it’s more like a "Guideline"

The 80/20 concept applies on a relative scale to the various NFL positions.  You cannot apply it rigidly across the board or you are left with a team devoid of the star talent necessary to win big games.  You still need to pay stars, especially at critical positions, to compete at the highest level – there is no award for most economical team.  Instead, the 80/20 rule is meant to supplement the roster since you cannot have a top-paid star at each position.

The one position at which 80/20 definitely does not apply is Quarterback. The position is paramount to the success of the team and as a result, a team will never make a sacrifice at the QB position merely to save money.  These days, having a franchise QB is a very binary reality – you either have one or you don’t.  And if you don’t, you are not a realistic contender for the Lombardi.  It’s as simple as that.  Once, teams were able to pay second-tier quarterbacks (think Matt Cassel’s $11 million APY contract with Kansas City or Alex Smith’s $8 million APY) but no longer.

Joe Flacco has a $20 million APY (currently) on his deal.  Ryan Fitzpatrick has an APY of about $3.75 million.  Fitzpatrick is 20% of the cost of Flacco and approximately 80% of the production.  However, that 20% difference at the quarterback position is quite literally the difference between night and day in the NFL.  It’s the difference between playoffs and no playoffs.

Its the difference between game-ending interceptions and game-ending touchdowns.

That’s why you cannot 80/20 the QB position. And that is why these days franchise QBs are regularly becoming the new highest paid players at the position each year.  Expect that trend to continue in the coming years when Cam Newton, Russell Wilson, and others come due.

After QB, the next three premium positions are pass rusher, left tackle, and cornerback.  Teams gladly pay a premium for these positions, too, and the Ravens are no different.  The Ravens may have wanted Kruger but not at $40 million as they knew he wasn’t nearly the same player that Suggs was.  But Terrell Suggs has many years of star production and they didn’t hesitate to pay him $61 million in 2009 and another $28 million extension this year.  80/20 is position and player quality dependent.  The Ravens don't 80/20 a star unless they believe he can no longer produce like one.

The 80/20 Rule in Action

Few examples embody the 80/20 rule quite like the Anquan Boldin trade.  At the risk of addressing a long-exhausted topic, bear with me, and let us look at the move from a purely non-emotional 80/20 perspective.

The Ravens certainly wanted to keep Boldin but felt that he was a classic 80/20 case.  Despite the hand-wringing in 2013, Baltimore actually found 80% of Boldin’s production at 20% of the cost.  His name was Marlon Brown.

In fact, to prove it to you, here are Brown’s and Boldin’s statistics both for 2012 and 2013.  I then calculated how Brown compared to Boldin both as a Raven and 49er.

Marlon Brown
Year	Age	Tm	Pos	G	GS	Rec	Yds	Y/R	TD
2013	22	BAL	WR	14	12	49	524	10.7	7
2013 Per game						3.5	37.4		0.5
Percent production of Boldin's: 2012						81%	61%	75%	188%
Percent production of Boldin's: 2013						66%	51%	77%	114%
Anquan Boldin
2012	32	BAL	WR	15	15	65	921	14.2	4
2013	33	SFO	WR	16	16	85	1179	13.9	7
2012 Per Game						4.3	61.4		0.3
2013 Per Game						5.3	73.7		0.4
Brown APY	$      496,666.67
Boldin APY	$  6,000,000.00
Brown Cost	8.28%

Accounting for games played, we see that Marlon Brown produced between 60% and 80% of Boldin’s production in receiving categories EXCEPT touchdowns where he actually outproduced him in both seasons.  And Brown played fewer snaps in the games he did appear in.

The data suggests that Boldin was the better player, and anyone watching in the past two years would have little doubt of that.  But now let’s look at their cost:

Marlon Brown (APY $496k) cost just eight percent as much as Anquan Boldin (APY $6 million).  Going forward Boldin is unlikely to do better than his 2013 while Brown is definitely expected to improve upon his rookie campaign.

This is the sort of value you must make for yourself at times with a rigid salary cap unless the position is so immensely important (e.g. QB) that the production cannot be sacrificed.

Opportunity Costs

Finally, the other unheralded but vital element of the 80/20 rule are the opportunity costs that it frees up.  When you sign a player for lots of money, you inherently sacrifice your ability to sign others with that money.  These are opportunity costs that you never actually see and so they often go unnoticed.  You don’t see the deals that your team doesn’t make as a result of these costs but believe me they absolutely exist.

Elvis Dumervil is exactly one such example.  Because the Ravens elected to free up Boldin’s salary, they had the fortuitous opportunity to sign a difference maker at a more important position that they would not otherwise have had.  Dumervil was the Ravens’ best rated player (per Pro Football Focus) in 2013 and filled the void left by Kruger and did so impressively.  Baltimore had no idea he’d become available, but unlike other interested teams, like Miami and Pittsburgh, Baltimore had the cap space to make the deal happen.

The Patriots are not unlike Baltimore in their philosophy and made a similar deal.  They certainly wanted Talib in 2014 but had a ceiling on what they’d pay him.  Denver outbid them.

Then Darrelle Revis came available – one of the best cornerbacks in the NFL.  The Patriots got Revis for approximately the same cost as Talib but the difference between players is vast.  This is the opportunity cost that the Broncos paid for and the Patriots freed up for themselves.  You could say Baltimore and New England were lucky to have those opportunities arise or you can acknowledge that they made the opportunity possible for themselves through adherence to a logical principle of roster management.

In the NFL, the best teams find value at non-essential positions, retain its stars, and pay for the positions that truly matter when it must. Baltimore’s 80/20 philosophy is the embodiment of its player valuation strategy and it has enabled them to be contenders by prioritizing the most essential positions and players and doing what it can everywhere else.  It’s never popular, it’s never perfect, but it does work.