Optimizing the allocation of funds of an NFL team under the salary cap

Jason Mulholland and Shane T. Jensen

International Journal of Forecasting, 2019, vol. 35, issue 2, 767-775

Abstract: Every NFL team faces the complex decision of having to choose how to allocate salaries to each position while being limited by the salary cap. This paper uses regression strategies to identify which positions are worthy of greater investment, under the assumption that players are paid in an efficient market. Using a combination of univariate regression models, we identify that it is worth investing in elite players at the quarterback, guard, defensive line, and linebacker positions. In addition, through a separate set of regression models we also consider the possibility that markets are not actually efficient. We determine that the optimal way to take advantage of inefficiency is through the draft, in order to find players who can provide significant win contributions early in their careers while they are being paid on relatively low rookie contracts.

Keywords: National football league; Linear regression; Resource allocation; Salary cap (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfor:v:35:y:2019:i:2:p:767-775

DOI: 10.1016/j.ijforecast.2018.09.004

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