Wednesday, September 14, 2016

Anatomy of an Overlay

I was on the golf course last Friday afternoon when it was reported that Rob Gronkowski wasn't on the Patriots' team plane to Phoenix. Didn't hear the news until the next morning.

I was on the phone and online Saturday afternoon as soon as it was reported that the spread on the Pats-Cardinals game had gone from Arizona minus six to minus nine. Too bad for me, I couldn't get to Vegas on such short notice. An opportunity for profit was missed.

A game point spread moving three points in a day means a full-fledged market stampede is in motion. Such stampedes create market distortions, the kind investment bankers spend their working lives trying to detect ahead of the suckers. And like all stampedes in all markets, the swing in the Pats game came from investors overrating one fact at the expense of any and all contradictory fact.

It's certainly a fact that Gronkowski is an outstanding football player. He might be the best tight end of all time. Losing him makes it more difficult for New England to win any game. But how much more difficult is the question.

Not three points worth. No tight end that ever lived is or was a three-point spread player. That honor is reserved for quarterbacks, and not many of them. Tom Brady's one, of course, but his expected absence was already factored into the original six-point spread. Pats getting six is a bet that without Brady, New England isn't as good as would be with him. Pats getting nine was essentially a bet that Jimmy Garoppolo would stink in his first game as a starter, so much so that New England's other offensive players would be rendered pretty much impotent.

That bet was a personnel judgment. Taking the other side of the bet was one Bill Belichick, who indicated through his every action in preseason that he thought Garoppolo would do just fine as a quarterback temp. Don't know about you, reader, but I would never make a football bet with Belichick. I just don't like my odds.

A lot of bettors lost a lot of money on that proposition because of two other facts they ignored, one a strictly gambling truth, the other a larger football truth that non-betting fans ignore every autumn weekend, causing them frustration if not financial loss.

Gambling truth: Bettors tend to overrate the short-term impact of injuries. Injuries work through attrition. They wear a team down and eventually overwhelm its depth. But for one game, substitutes tend to play almost as well as the starters they replace. Martellus Bennett is a Pro Bowler. Belichick and Josh McDaniels proved their playbook contains a goodly number of effective plays where the primary tight end blocks rather than catches. For one game, a makeshift offensive line can do just fine. It's by games three or four without starters where a team starts to really miss them.

Football truth: There are 45 guys in uniform for each team in an NFL game, and each and every one of them is important to the outcome. If the Pats lose Brady, Gronkowski and Nate Solder and the 42 remaining Pats play their best, New England will be competitive with any team. It's as simple as this. The Pats are a good team. The expression "good team" means a team with many good players, not just a couple of stars.

Good players, even great players, do not always play their best. If the Pats who took the field last Sunday night had to play all 16 games this season, they wouldn't win 'em all. They wouldn't win the Super Bowl. But they'd win more than they'd lose, and they'd never, ever, be a real nine point underdog against anyone.


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