Forbes Article on Most Valuable Coaches

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FORBES MAGAZINE

Most Valuable NFL Coaches

12.18.06

 

The legendary Vince Lombardi said that when it comes to football, the desire to win is more important than winning itself.

Yet despite the long shadow Lombardi still casts over the game 36 years after his death--he coached the Green Bay Packers to five titles in the 1960s--current National Football League coaches would be hard pressed to agree. In the cutthroat world of professional football, winning is everything. Trying hard is noble, but it doesn't get you a raise. Owners, hungry for sold-out stadiums and the extra revenue that comes with playoff games, have shown they're willing to shell out big dollars to coaches who have proven they can win.

 

At some point, though, the question for the owners becomes, "How much is too much?" For a struggling franchise, it's tempting to lure a big-name veteran coach to turn things around, despite the fact that such coaches command a lot of money. What's more, the tactic doesn't always work.

 

Two years ago, the Washington Redskins brought back Joe Gibbs, the man who coached them to three Super Bowl titles between 1982 and 1991. But despite a $5 million-a-year contract, Gibbs has barely nudged the team's results past the level of the five seasons before his return--the Skins have averaged seven wins and nine losses per year since 2004.

 

Likewise, the Dallas Cowboys' four-year, $17 million contract with Bill Parcells, a veteran of several past coaching successes, including a pair of Super Bowl titles, hasn't yielded many dividends yet. Parcell's first three years in Dallas have produced only two more wins per season than what the Cowboys averaged during the previous five years, and just one playoff appearance (though the team seems to have found some recent momentum under new starting quarterback Tony Romo).

 

The sweet spot for an owner, of course, is hiring a coach who can significantly improve a team's performance--without breaking the bank to do it. So which NFL coaches have provided owners with the highest return on their investments?

 

To find out, we analyzed the performance of each of the league's 32 teams since its current coach took the reins. We then compared the results to the team's performance during the five years that preceded his tenure. Coaches who improved their teams' fortunes were awarded points for increasing both the number of wins per season and the frequency with which they've led their teams to the playoffs, with an additional bonus for winning the Super Bowl (for which, incidentally, they are awarded the Vince Lombardi Trophy).

 

Points were then divided into the average salary a coach has earned since he's been with the team, producing a "dollars spent per point" figure used to determine which coaches provide the biggest bangs for the buck. The less spent per point, the more valuable--or cost-effective--the coach.

 

According to our results, the most valuable NFL coach is Bill Cowher of the Pittsburgh Steelers, who has taken his team to the playoffs in 10 of his 14 seasons and who won his first Super Bowl last season, all while averaging $2 million a year in salary since taking over in 1992. His 14-year tenure in Pittsburgh has cost the team just $191,277 per point, the lowest of any coach in the league. Cowher, having begun his career well before the industry's salary explosion of the early 2000s, owns an average career salary that is lower than the estimated $2.9 million median. But even based on his current $4 million income, he'd rank as one of the league's best investments.

 

Other top producers for the money include Cincinnati's Marvin Lewis ($214,411 per point), New England's Bill Belichick ($244,561), Denver's Mike Shanahan ($329,088) and Chicago's Lovie Smith ($239,474). Just missing our top 10 were Baltimore's Brian Billick ($489,386), a Super Bowl winner in 2000 who has raised his team's average win total to nine games from six since taking the helm seven years ago, and Philadelphia's Andy Reid ($519,950), who's averaged 10 wins a season since taking over in 1999, while leading his club to the playoffs five times.

 

Rookie coaches that have impressed so far, like the New York Jets' Eric Mangini, have a tougher time cracking the list--they haven't yet had the chance to accumulate post-season points. Look for such coaches to possibly move into most valuable territory in coming years (though one, New Orleans' Sean Payton, has already done enough in the 2006 regular season to qualify).

 

The biggest flops? In addition to Gibbs and Parcells, who respectively cost their clubs $2.1 million and $3 million per point, the list of costliest coaches includes the New York Giants' Tom Coughlin ($1.9 million per point), who has barely lifted his team's performance during the past three years despite a $3 million annual salary. But even he pales in comparison to Dennis Green of the Arizona Cardinals. Green, in his third year with the team and making $2.5 million a year, has yet to nudge the Cardinals' annual average win total past five, or to take the team to any playoffs. His cost works out to a whopping $8.2 million per point.

 

Sometimes, it pays to just promote an assistant and give him a token raise.