NFL Playoff Expansion: Should the League Add Another Wild Card?

Adjusting to a new schedule hence the lack of posts over the past week. I think I’ve got a routine down, but will wait for confirmation before announcing a rough schedule. There’s still a lot to do regarding a review of last season, then we’ll need to look towards the draft and free agency.

First, though, playoff expansion. Roger Goodell mentioned recently (two weeks ago I believe), that the league is seriously considering adding a wild card spot to both conferences. That would allow 7 teams to make the playoffs, with the #1 seed in both conferences having the only first round byes.

My initial reaction: Terrible idea.

However, as is usually the case, a deeper analysis made things a bit more complicated. So, let’s first talk about why adding a 7th team would be a good idea, then we can look at why it’s a bad idea.

Good Idea

From a business standpoint, two additional playoff games mean the league can sell another TV package. Brian Solomon (@Brian_Solomon), a Forbes markets reporter, mentioned to me on Twitter that this could be worth around $1 Billion. Obviously, that’s a relatively big deal. Beyond that, adding an additional team means the #2 seed gets to host an additional playoff game. I’m not sure what owners would say publicly about this, but there’s no doubt they love the idea of another playoff game’s gate revenue.

From a fan’s perspective, it’s hard to find fault with an additional playoff spot. Beyond the initial negative reaction, largely derived from some abstract notion of what the playoffs "should" be or which teams "deserve" to be there, an additional game likely adds to the overall enjoyment level for fans. Each team has an increased chance of making the playoffs. Also, the bar for making the playoffs is lowered, meaning late season games will "mean" more for mediocre teams. That makes those games more entertaining. Additionally, how many non-Eagles playoff games did you watch? My guess is a lot. Presumably you did so because you enjoyed them. So it’s safe to assume you’ll derive added enjoyment from an addition 2 playoff games, even if the Eagles aren’t involved.

What about quality? Won’t lowering the bar to the playoffs just result in bad teams getting in? Maybe, but not as much as you’d think (or I thought before doing the research). Here’s a table showing which teams would have been added to the playoff field over the past 5 seasons if there had been a 7th spot in each conference:

There’s definitely some mediocrity in there; I can’t say I’d be excited to see the 2011 Bears in the Playoffs. However, there are also some legitimately good teams, whose addition clearly adds to the overall quality. Look at the 2012 Bears or the 2010 Chargers; in either case, it’s hard to argue those teams don’t "belong" or that they somehow compromise the overall quality of the playoff tournament.

It seems that the only real complaints about an added team, from a fan’s perspective, will be from the #2 seed. That team loses its bye, and as I showed above, has to play another game, perhaps against a very good opponent. However, as I said above, it’s a home game. For all of the live attendees, another home game seems like a net benefit. For fans at home, it’s just another opportunity to watch their favorite team play. Yes, it hurts their chances of winning the Super Bowl. However, if the team can’t beat the #7 seed in a home playoff game….

So…pretty clearly, the addition of a 7th team is probably net benefit to all those involved (except maybe the players). However, we do need to discuss the negatives, some of which are obvious (and minor) and some of which are relatively abstract (and potentially significant).

Bad Idea

Let’s get the easy one out of the way first.

- Injuries. Any additional game increases the chances that a player will get injured. This is a major argument against the expansion of the regular season. However, this change results in just 2 added games. Again, this negative result seems to be focused on the #2 seed in each conference. None of the other teams are effected, and the #7 seed will gladly take the risk of injury in exchange for a spot in the playoffs. This is a legitimate gripe, but doesn’t have anywhere near enough significance to outweigh the benefits.

Now we need to ascend to a higher level of analysis. As we’ll see, the reason the playoff field will expand is because the benefits are mostly clear and quantifiable ($$$) and the detriments are largely abstract and qualitative. In such a scenario, a near-term focused business enterprise (as the NFL appears to be) will always choose the $$$.

Since the NFL’s decision-making is based entirely upon the fact that it is itself a business and operates for the benefit of other businesses (the teams), any argument against playoff expansion has to focus on the business side of things. We can complain all we want from a fan’s perspective, but unless it affects the bottom line, it doesn’t matter.

So…here are a few points, which by themselves do not pose significant risks. However, after I list them, I’ll try to tie them together to explain why I’d be more cautions than the NFL in expanding the playoffs.

- Super Bowl quality. The premier event of the NFL season is the Super Bowl. Recently, the NFL has benefitted tremendously from the competitiveness of the game. Viewership is huge and therefore the value of that entity is extremely high. However, adding a playoff team affects the probability of producing a good game. This is a long-term concern. At the moment, the Super Bowl is a huge cultural event, drawing in casual viewers who don’t really care what the involved teams’ records were. However, I’d argue that the casual viewership is, at its core, built from a foundation of more interested fans. Those are the one’s most likely to be effected, over the long-term, by a diminution in the general competitiveness of the game.

Look back to the Super Bowls of the mid-late 80′s:

1985 – 49ers 38, Dolphins 16

1986 – Bears 46 – Patriots 10

1987 – Giants 39 – Broncos 20

1988 – Redskins 42 – Broncos 10

1989 – 49ers 20, Bengals 16

1990 – 49ers 55, Broncos 10

That’s what the NFL should be worried about. Adding mediocre teams may effect the general competitiveness of the games. Of course, the counterargument is that the overall parity of the league has shifted such that mismatches won’t happen like they did in the past. That’s a fair point, but it’s not dispositive. We’re just looking at possible risks. Again, this is a relatively small risk, and something that would take a while to develop. One bad Super Bowl isn’t going to change the NFL’s value much. It would take a string of such games to really result in a decline in general interest, and even then, the resulting value effects are unclear. However, just because a the probability of a risk is small doesn’t mean it should be ignored.

- Piercing the veil of "the event". 3 of 4 Wild Card games this year had trouble selling out. In fact, those games would not have sold all of their tickets had it not been for corporate sponsors willing to take large swaths of seats off the teams’ hands. Although it’s unlikely that a #2 seed would have as much difficult selling tickets as the teams this year did, it’s indisputable that added games increase the probability of a failure to sell out.

Ok, so what? Why is this a problem?

Well similar to the SB discussion above, the NFL has built its tremendous popularity by convincing the general public that each game is an "event" that shouldn’t be missed. The structure of the season (just 16 games, 1 game a week, typically on Sundays) helps as well. I submit that if the games ceased to sell-out, the foundation of the "event" would begin to erode. Right now the NFL has a LOT of casual fans; fans who don’t really follow the team but still tune in every Sunday. Why? Because it seems culturally important. It’s the same thing that drives street performers. If you walk by one on an empty street, you’re unlikely to stop and watch/give money. However, if you see one surrounded by a large crowd, you’re going to want to see what’s going on, right? Apply similar logic to the NFL games.

It’s important not because of any intrinsic value but because so many other people think it’s important. The casual fans don’t want to miss out. However, if the games can’t even sell all of their tickets, how could it possibly be that important?

Once again, this is a long-term, relatively abstract risk. One empty seat isn’t going to effect TV viewership. However, consistent blocks of empty seats might.

Intermission

Just realized that I’ve hit 1500 words and am running out of time, so I’ll provide a temporary wrap up, and we can continue the analysis later.

There is no law that says the NFL has to remain tremendously valuable. It seems inconceivable that it won’t, but large, seemingly stable businesses do collapse, and it’s often not the result of what were obvious defects (if they were obvious they’d have been addressed). This needs a lot of unpacking, but for now, let’s just say that if I was the NFL, I’d be very careful about reaching for limited, near-term gains ($1 Billion split between every team is not a huge gain compared to overall value) in exchange for taking on long-term, qualitative tail risk. What I identified above (along with other similar issues) is hard to quantify (think about general product dilution). However, that’s precisely why you shouldn’t be too cavalier in inviting it. Individually, the potential negative effects are all likely to be small and to only manifest themselves over the long-term. But they are also very tough to eliminate/address, and once they take effect, it’s hard to combat.