Daily Options Report

Here's one thing I learned when I had my book Sometimes you have a theory on something, but then run numbers, and the data just does not bear you out. So here's what I did; I either wrote it up as such (it happened on put/call for me) or switched topics.

The WSJ sports apprently has no such thought process.

The working theory in this piece? Notice the disparity between good and bad teams so far this season in the NFL?  It's because the salary cap has failed.

One of the fundamental principles of the National Football League is that every team should have a realistic shot at winning every time it steps on the field. This season, that's not the case.

The strongest teams, like the New England Patriots and New Orleans Saints, have looked unstoppable at times, while weak ones like the Detroit Lions seem exceptionally hapless. There have been six shutouts, the highest number since 1994, and 20 blowouts of 21 points or more, the second-highest number in the past 39 years. Even more troubling is that for the first time since the beginning of the modern NFL, seven teams have zeroes in their records, meaning they've either won or lost every game they've played.

According to team executives, agents and union officials, this season's results point to a larger truth about the league that has, until now, only been the subject of whispers. The engine the NFL uses to enforce parity—a cap on player salaries—has so many loopholes, they say, that it no longer prevents teams from spending drastically different amounts on talent. And while it's difficult to make a precise connection, there's evidence that this imbalance may be responsible for lackluster games.

And this was written before yesterday's slate of even more blowouts. It's pretty demonstrable we have some really awful teams this year. The Rams indeed had about zero chance vs. the Colts yesterday. But is there a correlation to salary imbalances and lackluster games? After all, it seems to be the whole thesis behind the article.

Well, he has this.

While it's not clear how much a team's actual spending translates to wins and losses, a person who has seen these figures says that some of the NFL's better teams, the Vikings, the New York Giants and last year's champions—the Pittsburgh Steelers—have been near the top of the pile in actual spending while two of its worst—the Kansas City Chiefs and the Tampa Bay Buccaneers, are at the bottom.

Yes, there's your proof!

But how about we take a better look.

We don't have final numbers for 2009 yet, but here they are for 2008, which is frankly better in that we know where everybody finished. If you can find a correlation between payroll and final results, I'm all ears. But here's my observations.

The Raiders had the highest payroll and finished 5-11. The Browns were 4th, ended 4-12, and I would argue in the latter part of the season were about the worst team I have ever seen. Playoff teams ranked 3rd, 6th, 7th, 8th, 14th, 15th, 17th, 19th, 21st, 25th, 29th, and 31st. And it also seems to have very little to do with market size.

Speaking of market size, let's look at some of the powerhouses terrorizing the league this year. We have the Saints the king of the NFC, and it's pretty tough to make the case that there's some huge financial advantage playing in a relatiively old stadium in one of the smallest and poorest cities in professional sports. Next up we have the Vikings, also playing in a smallish city in a relatively old stadium. In the AFC we have the Colts....and well, at least they have their own new stadium.

Bottom line is the actual cap numbers can mislead in a given year as teams do play with the numbers. The sisters of the poor in his article, the Bucs and Chiefs are more likely rebuilding than permanently downsizing. But I'd also argue also that the cap has relatively little to do with parity anyway. It's more about the revenue split and the nature of the game. It's not baseball, rosters are twice as big, injuries are huge, and careers are way shorter.  And most importantly, bad teams have hope they'll get better within a year or two. The Bucs aren't even a year removed from a 9-3 start.