Why Jauron may be safe regardless

[yall]

He could also be shamed into resigning. Costs Ralph nada.

[nucci]

The greater issue, outside of pure business decisions, is that RW does not like paying people not to work. I'm sure you'll recall the Wade Phillips event, when Wilson claimed WP quit on and was not fired. The former would remove RW's obligation to pay WP.

 

This is a stubborn man, Mr. Wilson. He's accustomed, over a lifetime of business and sports ventures, to getting his way. He's not fired a coach mid-season since the eigthties when HC's earned a fraction of what they used to.

Who does??

[Doc]

Um, not so fast. Dockery was cut because he was due a roster bonus the next day. Money had everything to do with it.

 

But, yes, there is no way they can "get back" money already spent.

Dockery may have been due a bonus, but his contract called for $18.5M guaranteed. So in his 2 years with the Bills, that's what he made. It's little different from eating Jauron's contract with $9M left.

[Sisyphean Bills]

Dockery may have been due a bonus, but his contract called for $18.5M guaranteed. So in his 2 years with the Bills, that's what he made. It's little different from eating Jauron's contract with $9M left.

The Bills decided to not pay him $4.5 million more and cut him. I'm not going to debate you about water that passed under the bridge. I'm already on record that paying Dockery a Steve Hutchinson contract was a very bad move and for any number of reasons.

 

http://voices.washingtonpost.com/redskinsi...al-with-sk.html

 

Also, there is one large difference. Dockery was a player. The Bills are contractually obligated under the CBA to spend up to a minimum. Wherever that cap money goes.

 

Jauron is a coach. His contract comes out of the operating revenue of the franchise. Right out of Ralph's pocket, you might say. There is a distinction, and Ralph, even at 91, knows it. You might recall that when talking about the Toronto deal, Ralph was quick to say that none of that money would ever go towards player salaries.

[West End Stench]

Sorry but this is not a sunk cost decision and I don't think your condescending tone really adds much to the conversation. It's a replacement project decision. The cost of the current equipment over its projected lifespan (Jauron) needs to be compared with the ROI of replacing the equipment with newer, more effective equipment. Of course, in sports the return of a new coach is not guaranteed and its value needs to reflect that.

If you're going to call everyone idiots, it would be more effective if you knew what you were talking about. Your "one rule of economics" sounds like a guy with a hammer that only sees nails.

Thanks for the Econ lesson, Mr. Bernanke, but I think (hope) the majority reading recognized this as a project with replacement decisions. And while ROI replacements shouldn't be overlooked, the considerations of sunk costs should not impair the ability to make a decision (which is what some readers in this thread suggest is happening) . Avoiding a sunk cost fallacy is inherent in making a project decision, so I'm not sure exactly what your point is.

 

Yours truly,

Mrs. Ralph Wilson

 

P.s. - Sorry if I sounded condescending but some of the off the cuff remarks on this message board are just intolerable to the point where finding a logically sound discussion is a rarity. Frustration sets in for all at 1-3 (0-2)

[todd]

Good post. Sunk costs are rarely part of a business decision. They shouldn't be in this case.

 

People on this board are so clueless sometimes. There is one rule of economics, finance and business that you guys think that Ralph Wilson, a self-made multi-millionaire, is forgetting. Contractual agreements with Dick Jauron all but make the $9 Million owed in salary completely sunk. Sunk costs are never ever considered in future business decisions, whether it is millions of dollars paid for the coach, or the $200 K sunk into stadium maintenance this past summer.

 

Saying that "Ralph won't fire Jauron because he doesn't want to eat the $8 million" is so ignorant that it makes my head spin. Even if Wilson is in fact senile to the fact that he forgot this fundamental rule of thumb (which I doubt), he is still surrounded by a handful of financial advisors who are paid a healthy salary to remind him of elementary finance decisions.

 

I'll agree with some that Jauron might be kept longer than we may like, but I'll put money ($9 million?) down that it's not because he's afraid to eat the sunk cost. The decision to keep him until the seasons end could be for a larger demand-rebound in the off-season if we wait to fire him in the off season, when our record is 0-0, instead of bringing in an unkown after the bye week when we're 2-6.

[Ramius]

The Bills decided to not pay him $4.5 million more and cut him. I'm not going to debate you about water that passed under the bridge. I'm already on record that paying Dockery a Steve Hutchinson contract was a very bad move and for any number of reasons.

 

http://voices.washingtonpost.com/redskinsi...al-with-sk.html

 

Also, there is one large difference. Dockery was a player. The Bills are contractually obligated under the CBA to spend up to a minimum. Wherever that cap money goes.

 

Jauron is a coach. His contract comes out of the operating revenue of the franchise. Right out of Ralph's pocket, you might say. There is a distinction, and Ralph, even at 91, knows it. You might recall that when talking about the Toronto deal, Ralph was quick to say that none of that money would ever go towards player salaries.

 

Which really makes you wonder...the 78 million from toronto wasn't going to the players, and obviously isn't being spent on the front office and coaching staff, so where exactly did it go?

 

I can name probably 30 (everyone but the raiders) other teams in the NFL that could assemble a hell of a FO and coaching staff with 78 million. Its too bad ralphie isn't willing to fork over his precious toronto money to do so.

[Red]

People on this board are so clueless sometimes. There is one rule of economics, finance and business that you guys think that Ralph Wilson, a self-made multi-millionaire, is forgetting. Contractual agreements with Dick Jauron all but make the $9 Million owed in salary completely sunk. Sunk costs are never ever considered in future business decisions, whether it is millions of dollars paid for the coach, or the $200 K sunk into stadium maintenance this past summer.

 

Saying that "Ralph won't fire Jauron because he doesn't want to eat the $8 million" is so ignorant that it makes my head spin. Even if Wilson is in fact senile to the fact that he forgot this fundamental rule of thumb (which I doubt), he is still surrounded by a handful of financial advisors who are paid a healthy salary to remind him of elementary finance decisions.

 

I'll agree with some that Jauron might be kept longer than we may like, but I'll put money ($9 million?) down that it's not because he's afraid to eat the sunk cost. The decision to keep him until the seasons end could be for a larger demand-rebound in the off-season if we wait to fire him in the off season, when our record is 0-0, instead of bringing in an unkown after the bye week when we're 2-6.

 

You're also forgetting about one of the most simple reasons to invest: RETURN on said investment.

 

Ralph surely does not want to "sink" millions of dollars on an investment and not get something in return- even if it is solely to fill a position until a better candidate is available.

 

Ralph invested $9 million in an individual who is supposed to have a return of so many wins, playoff berth's, etc.

 

I don't think that he wants to let that investment walk away with nothing in return, either.

 

I just don't think that Jauron will be the investment that ever delivers.

[CircleTheWagons]

Thanks for the Econ lesson, Mr. Bernanke, but I think (hope) the majority reading recognized this as a project with replacement decisions. And while ROI replacements shouldn't be overlooked, the considerations of sunk costs should not impair the ability to make a decision (which is what some readers in this thread suggest is happening) . Avoiding a sunk cost fallacy is inherent in making a project decision, so I'm not sure exactly what your point is.

 

Yours truly,

Mrs. Ralph Wilson

 

Well your original comment read like you were suggesting that RW shouldn't care about Jauron's contract when considering a new coach because it was a sunk cost. I was simply pointing out that it's not that a simple a business decision since any new coach has to have a return above Jauron's return over the same time frame worth the cost of his new contract.

Your initial post read to me like RW should not consider Jauron's contract in future decisions, which is typically what people refer to in "sunk cost" discussions.

With a full stadium and a limited ability to add additional revenue, where is the return for Ralph to replace Jauron rather than waiting a couple of years? Since we agree it's a replacement decision, do you really think Ralph will be convinced a new head coach will bring in the return to justify the change? There is little evidence that it has worked in Buffalo in the past.

[Mr. WEO]

Good post. Sunk costs are rarely part of a business decision. They shouldn't be in this case.

 

 

Why pay to renovate an old stadium while paying for a new one?

 

 

He doesn't want to pay twice for one employee. Hence, he won't fire him this year.

[Giaimo25]

HOPEFULLY ralphie was smart enough to put some sort of clause in jaurons contract that says if he doesnt meet his end of the bargain (i.e. winning season??) that the contract would become null and void and we can go get a good coach for next year. I am not ignorant enough to think that any coach worth a nickel is going to come into this tailspin of a year so instead i will just be pissed off about MY sunk cost of $300+ to directv to watch another losing bills season

[WellDressed]

$9M is a lot of money...even to Ralphie.

 

PTR

 

 

Oh, that's great......When was it known that Jauron was getting 3M per year??

[Sisyphean Bills]

Why pay to renovate an old stadium while paying for a new one?

 

He doesn't want to pay twice for one employee. Hence, he won't fire him this year.

Moreover, why pay twice for an employee and eliminate income with a lock-out?

 

West End's post that nobody considers the expense of an investment versus the return on that investment after the time of purchase of said investment is what makes no sense. Maybe in an imaginary world of infinite resources that's true.

[Fan in San Diego]

Oh, that's great......When was it known that Jauron was getting 3M per year??

 

Or that it is guaranteed? Link please? Or maybe there are performance clauses?

[West End Stench]

Well your original comment read like you were suggesting that RW shouldn't care about Jauron's contract when considering a new coach because it was a sunk cost. I was simply pointing out that it's not that a simple a business decision since any new coach has to have a return above Jauron's return over the same time frame worth the cost of his new contract.

Your initial post read to me like RW should not consider Jauron's contract in future decisions, which is typically what people refer to in "sunk cost" discussions.

With a full stadium and a limited ability to add additional revenue, where is the return for Ralph to replace Jauron rather than waiting a couple of years? Since we agree it's a replacement decision, do you really think Ralph will be convinced a new head coach will bring in the return to justify the change? There is little evidence that it has worked in Buffalo in the past.

 

No, I don't think Ralph believes a new head coach in the middle of the season will bring a considerable return. Neither do I, and for a number of reasons. Why drag in a new and probably unproven head coach at 1-3? Give a new coach an offseason to establish his own personnel, players and system before throwing him into the messy, talentless team that we have right now.

 

In addition, I'm not saying that the amount of a sunk cost shouldn't be reflected on. All I'm saying is that when looking ahead to a new project, that hesitation and mulling over what has already been spent on a *failed* project shouldn't be a factor since the money paid to Dick is non-recoverable. The return on the Dick Jauron investment is arguably zero in this situation. Since Ralph should be ignoring sunk costs, what he should be considering is the amount of capital available to spend on new coach, the expected return on investment in the current coaching market (# wins that a Shanahan, Gruden, Ditka, or whoever you guys dream of can provide), and the timetable for return.

[CircleTheWagons]

No, I don't think Ralph believes a new head coach in the middle of the season will bring a considerable return. Neither do I, and for a number of reasons. Why drag in a new and probably unproven head coach at 1-3? Give a new coach an offseason to establish his own personnel, players and system before throwing him into the messy, talentless team that we have right now.

 

In addition, I'm not saying that the amount of a sunk cost shouldn't be reflected on. All I'm saying is that when looking ahead to a new project, that hesitation and mulling over what has already been spent on a *failed* project shouldn't be a factor since the money paid to Dick is non-recoverable. The return on the Dick Jauron investment is arguably zero in this situation. Since Ralph should be ignoring sunk costs, what he should be considering is the amount of capital available to spend on new coach, the expected return on investment in the current coaching market (# wins that a Shanahan, Gruden, Ditka, or whoever you guys dream of can provide), and the timetable for return.

I completely agree with you. My worry for the Bills is that Ralph values Jauron's return well above zero over the next two years. In the last ten years, Ralph has made two significant signings in management - TD and now Jauron. Neither has improved the product on the field. I'm not sure Ralph is ready to spend big $$$ based on the return he had in his previous investments.

 

I would rather see a complete top-down cleansing before we try and hire a new coach. I haven't decided if it goes all the way to the owner yet...

[Paup 1995MVP]

People on this board are so clueless sometimes. There is one rule of economics, finance and business that you guys think that Ralph Wilson, a self-made multi-millionaire, is forgetting. Contractual agreements with Dick Jauron all but make the $9 Million owed in salary completely sunk. Sunk costs are never ever considered in future business decisions, whether it is millions of dollars paid for the coach, or the $200 K sunk into stadium maintenance this past summer.

 

Saying that "Ralph won't fire Jauron because he doesn't want to eat the $8 million" is so ignorant that it makes my head spin. Even if Wilson is in fact senile to the fact that he forgot this fundamental rule of thumb (which I doubt), he is still surrounded by a handful of financial advisors who are paid a healthy salary to remind him of elementary finance decisions.

 

I'll agree with some that Jauron might be kept longer than we may like, but I'll put money ($9 million?) down that it's not because he's afraid to eat the sunk cost. The decision to keep him until the seasons end could be for a larger demand-rebound in the off-season if we wait to fire him in the off season, when our record is 0-0, instead of bringing in an unkown after the bye week when we're 2-6.

I agree that Ralph is not going to make his decision on keeping or firing Dick based on the extension given last year. Ralph hates being embarrased. If we lose to Cleveland and play crappy, Dick will be fired. If he can not get the team ready to play an 0-4 team at home when his job is very much in jeopardy, than there is no reason for him to be coaching this team.. I think Ralph will figure that out. I think Dick might actually resign if we get another pitiful performance. And I for one am not convinced in the slightest that we beat the Browns. The psyche of this Bills team is awfully fragile. Guys have not won much here, and don't have a lot of confidence. It will be very interesting to see what they bring to the table on Sunday. A loss and changes HAVE to HAPPEN.

[Doc]

The Bills decided to not pay him $4.5 million more and cut him. I'm not going to debate you about water that passed under the bridge. I'm already on record that paying Dockery a Steve Hutchinson contract was a very bad move and for any number of reasons.

 

http://voices.washingtonpost.com/redskinsi...al-with-sk.html

 

Also, there is one large difference. Dockery was a player. The Bills are contractually obligated under the CBA to spend up to a minimum. Wherever that cap money goes.

 

Jauron is a coach. His contract comes out of the operating revenue of the franchise. Right out of Ralph's pocket, you might say. There is a distinction, and Ralph, even at 91, knows it. You might recall that when talking about the Toronto deal, Ralph was quick to say that none of that money would ever go towards player salaries.

The Bills have never been close to the salary cap floor. And it's not like they paid Dockery based on it. He got $18.5M, which ideally was supposed to be for at least 4 seasons. He didn't last more than 2. That $4.5M saved goes into Ralph's pocket and can be used for a new HC. So it's the same deal.

 

But wait, I thought that the owners had the players by the short hairs and a lockout wasn't going to happen?

[BillsVet]

Who does??

 

Wayne Huizenga, before selling the Dolphins to Stephen Ross, hired Bill Parcells to clean up the Dolphins at the end of a 1-15 season in 2007. Parcells advocated firing the entire coaching and front office staff. Everything. And then he hired an entire new staff. This reportedly cost 27M dollars. Forgive me for not having a link, but I recall starting a thread about the cost to win.

 

And guess what happened? That team Parcells built went 11-5 in 08. Sure, Miami got a lot of bounces their way, but Huizenga sold the team and made a significant profit.

 

The point is, it's a business, and Huizenga made a decision just prior to selling the team. RW plays marketing games, doesn't build a real football team, and depends on gimmicks (TO) to sell tickets. All the while, the team languishes in mediocrity, or perhaps worse this season.

 

EDIT: Huizenga-Parcells

[Doc]

Wayne Huizenga, before selling the Dolphins to Stephen Ross, hired Bill Parcells to clean up the Dolphins at the end of a 1-15 season in 2007. Parcells advocated firing the entire coaching and front office staff. Everything. And then he hired an entire new staff. This reportedly cost 27M dollars. Forgive me for not having a link, but I recall starting a thread about the cost to win.

 

And guess what happened? That team Parcells built went 11-5 in 08. Sure, Miami got a lot of bounces their way, but Huizenga sold the team and made a significant profit.

 

The point is, it's a business, and Huizenga made a decision just prior to selling the team. RW plays marketing games, doesn't build a real football team, and depends on gimmicks (TO) to sell tickets. All the while, the team languishes in mediocrity, or perhaps worse this season.

Huizenga didn't plan on Brady missing the season, Favre getting injured, or Pennington falling into their laps. And this season is proving to be a major disappointment for them, with Parcells probably quitting at the end.