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Sunday, March 3, 2013
 NFL econ: 49ers' sustainability, Rams' plan
By Mike Sando
Patrick Willis, Justin Smith, NaVorro Bowman
The 49ers have invested heavily in linebackers Patrick Willis (middle) and NaVorro Bowman (right). Is their defensive success financially sustainable?

BOSTON -- The San Francisco 49ers, having already spent big for Patrick Willis, engaged in a lengthy internal debate before deciding to invest heavily in a second inside linebacker, NaVorro Bowman, last season.

The St. Louis Rams also had big-picture NFL economics in mind when they sent the second pick of the 2012 NFL draft to Washington, a deal that stocked St. Louis with early picks while allowing Robert Griffin III to land in the nation's capital.

These were a couple NFC West points of interest when 49ers chief operating officer Paraag Marathe and his Rams counterpart, Kevin Demoff, joined a football analytics panel Friday at the recently completed MIT Sloan Sports Analytics Conference.

Marathe sat at one end of the four-man panel. Demoff sat at the other. For one hour, the two joined Football Outsiders' Aaron Schatz and former NFL executive Scott Pioli in discussing where the game is headed through increasingly sophisticated use of data.

There was some fun back-and-forth, including when Marathe, Demoff and Pioli dodged moderator Andrea Kremer's question about which players are most overrated. Demoff broke the tension by saying he hoped other teams would consider the Rams' impending free agents overrated, allowing St. Louis to re-sign them more easily.

On a more serious note, Marathe and Demoff expanded on how the 2011 collective bargaining agreement has changed the way teams build their rosters.

"There is a lot of discussion right now about the shrinking of the middle class in football," Demoff said. "Elite players continue to get paid at high levels and there are no more $3-4 million  players. A lot of that is because teams are getting better at scouting college players and the draft has become efficient."

The rookie wage scale has made college players more affordable, particularly early in the draft. That could be allowing teams to concentrate their free-agent budgets on a smaller list of higher-priced veterans.

"If you have $8 million to spend in free agency, you might be better off spending $7 million on one guy and $1 million on the other than buying two players at $4 million," Demoff said.

That is because teams are increasingly focused on accumulating as many high-impact players as they can with less regard for the positions those players play, in Demoff's view. For the 49ers, that meant paying both Bowman and Willis instead of letting Bowman hit the market simply because the 49ers' budget for inside linebackers was tapped out.

Such thinking could come into play for Seattle if safeties Earl Thomas and Kam Chancellor still project as Pro Bowl players when their contracts wane. Thomas, as the 14th pick of the 2010 draft, was the more highly valued player. Re-signing him would be the higher priority, in my view, if Seattle had to choose between its safeties. But if the Seahawks can draft a lower-cost alternative in the meantime, the team will have additional options.

As noted last month, the Seahawks got exceptional value from their defense last season largely because they've drafted so well recently, finding low-cost-starters in the back seven especially. Seattle ranked first in point allowed and seventh in EPA despite ranking 30th in cap dollars committed to defensive players.

The 49ers also fielded a top defense, but they're further along in their development, which is a nice way of saying they've got more money tied up in veteran players. San Francisco led the league in cap dollars allocated to defensive players last season. The decision to re-sign Bowman was made in that context.

"We have the most expensive defense in the league on an average per-year basis, and that is not sustainable over time," Marathe said. "Because of the cap, if every veteran on the team took a 15 percent discount on their market value, you couldn't field that team still under the cap because the difference between wholesale [draft] and retail [free agency] is so wide.

"You have to figure out which players to keep and which players to let move on and churn out. Because you have to continue to replenish the system."

Christian Ponder
Can the 49ers afford to pay talented free safety Dashon Goldson what they think he deserves?
Dashon Goldson's situation comes to mind. The Pro Bowl free safety is a player the 49ers value. Coach Jim Harbaugh recently called Goldson the type of player a team wants to reward. But will the economics make sense in the end?

"Paraag makes a great point in that his defense right now, and they are fantastic, but ultimately a scheme like that is going to be very expensive to keep and get veterans to do," Demoff said. "So, either they are going to wind up changing schemes and adapting, or they are going to decide which positions are most valuable. I have long thought teams would go to a 3-4 because it was easier to find nose tackles, but now [top] nose tackles are worth $12 million."

The prices for positions change over time in relation to supply and demand. There's been a trend toward more 3-4 schemes in recent years. Those schemes tend to be more complex. They often work best with veteran players running them. Veteran players tend to cost more money. It gets back to wholesale vs. retail.

The 49ers' decision at inside linebacker came down to whether Bowman and Willis could still have sufficient combined value if the defensive scheme changed.

"There was a lot of debate about that before we decided to make the move," Marathe said. "Ultimately, we decided that, yes, having two position trend-setting players was worth having on our team. But it was not without hesitation because of system."

Demoff sees strong focus on making efficient use of, say, the 35th through 53rd salary slots on an NFL roster. Teams drafting well can leverage additional margin for error under the current labor structure because early draft choices cost less.

The change is one the Rams in particular should welcome.

The Rams are still digging out financially from the old system after funneling wildly disproportionate resources into their 2008, 2009 and 2010 first-round choices. Chris Long, Jason Smith and Sam Bradford all were chosen among the top two overall picks at a time when those choices carried premium price tags.

Long signed a contract extension last season. Smith was traded to the New York Jets and subsequently released by them.

Bradford's rookie deal is scheduled to count $12.6 million against the cap in 2013, his fourth NFL season. The deal Andrew Luck signed with Indianapolis as the first pick under the new labor agreement could count closer to $7 million when Luck is in his fourth season in 2015. That's an advantage for the Colts.

The Rams have 10 contracts scheduled to count roughly $85 million against the $123.9 million cap for 2013, not counting the deal Steven Jackson is expected to void when free agency begins March 12. That is the highest projected figure in the NFC West. The Colts' 10 highest cap charges total less than $50 million. Factors beyond the rookie wage scale account for much of the difference. The Rams could reduce the figure through roster moves and renegotiation. But there's no getting around Bradford's rookie contract, either.

"When we did the RG III trade a year ago, we looked out and said, 'In 2014, we will have 12 players who were first- or second-round picks under the new rookie wage scale,' " Demoff said. "Twelve of our best players will make less than $25 million combined in 2014, which meant on the remainder of our team, we could overpay a few guys in free agency, we could make a few mistakes here or there and we would have a pretty good nucleus.

"We have all stopped looking at where you spend. It is, 'How do you accumulate the best players regardless of position?'"