Under the Hood: Reviewing NFL Week 1
With the last bit of dust having settled on the NFL 2016 season's first week of action last night, we take a breath and look back at notable happenings. We detail three themes, in particular, that caught the betting public, or, in the case of the third item, us, off guard. We then go on to review our specific week 1 wager recommendations.
#1 NO PLACE LIKE HOME...FOR DARK HORSES, ANYWAY
We highlighted home underdogs as a playable theme in week 1, citing indications from our multi-faceted system as well as empirical analysis from researchers such as Vergin & Sosik (1999), Golec & Tamarkin (1991) and Dare & Dennis (2008) (see our Thursday Night Football pick for details). Our framework identified the following wagers:
Denver Broncos +3.0 vs the Carolina Panthers New York Jets +3.0 vs. Cincinnati Bengals Jacksonville Jaguars +6.0 vs. Green Bay Packers Dallas Cowboys PICK* vs. New York Giants San Francisco 49ers +3.0 vs. Los Angeles Rams _______ * We took Dallas as a PICK, but the spread closed at +1.0, per Vegas Insider
The Titans +2.0 vs. the Minnesota Vikings and the Washington Redskins +3.0 vs. the Pittsburgh Steelers constitute the other home dogs situations of week 1, however, our primary handicapping factors did not see value with these teams; in fact, we correctly advocated against Tennessee.
As it turned out, siding with home dogs was profitable during the first week of NFL action. This cohort finished 4-1 versus the number, if one grades the Cowboys as the PICK that we recommended rather than based on the closing line.
Interestingly, underdogs, in general, exhibited a notable edge last week, notching 7 covers versus 5 losses and 2 pushes and, perhaps more impressively, 6 outright wins. Home teams on the other hand, finished the week a lowly 6-9-1 (underdog and home records based on closing lines reported by VegasInsider.com). That home underdogs were overwhelmingly profitable despite the struggles hosting teams generally experienced last week fits with research validating the home underdog effect in the NFL spread betting market.
#2 THE DUBIOUS LEADERS
The replacement QB was yet another money-making theme of the NFL week that was. Unfamiliar names such as Trevor Siemian (DEN), Shaun Hill (MIN), Carson Wentz (PHI), Jimmy Garappolo (NE) and Blaine Gabbert (SF) led their respective teams to covers and straight-up wins in week 1. In fact, to the chagrin of the betting public, who lined up heavily against these teams, the group of unheralded quarterbacks were 5-1 straight up and against the spread in week 1 (again, counting the Cowboys game as a PICK), including three upset wins.
The Covers.com examined team's ATS performance in the first game after losing their starting QB. Of the 35 such instances identified in the 2010-2014 NFL seasons, the impaired squad went 23-11-1 versus the number. This historical observation, coupled with the week 1 happenings imply that the market might persistently overestimate the difference between the value of starting and replacement-level QBs.
#3 TOTALS DEFY EXPECTATION
The OVER asserted itself in week 1, with a 9-7 showing. This observation is at odds with research suggesting the betting public is biased in favor of higher scores, and most specifically with the work of DiFilippo, Krieger, Davis and Fodor (2014), who find that disappointing productivity is especially likely in week 1.
Consistent with the empirical analysis though, based on AccuScore's database, between 2010 and 2014 the UNDER is 45-34-1 in week 1 action (57%), but is an astounding 785-542 (59%) overall. Moreover, a naive strategy of betting the UNDER in every NFL regular season game has netted a profit in each of the last five completed NFL seasons (assuming a standard vigorish of -110).
The last time the OVER got off to a fast start out the gate, as was experienced in this week 1, the OVER still finished the season with a losing 47% win rate. However, the UNDER fared exceptionally well last year, cashing in after 70% of regular season games played. As such, we are not sure whether a reversion to the mean is underway which favors the OVER for an extended period, or if last week's success is entirely explained by variance. We will be monitoring this matter with great interest in weeks to come.
#4 THE NITTY GRITTY
In aggregate, our picks finished 7-5 -- in the ballpark of our target long-term win rate, and good for a profit of 1.13 units (or 8.7% of the risk amount). Our worse than average net vig of -112 sapped a bit of profit from our effort, but overall, we are satisfied when we net over one unit. We synopsize each game below.
Things that went right for us...
After a slow, turnover-riddled start that resulted in a 17-7 halftime deficit, Denver rallied back versus the Panthers in the second half to collect the "W", proving to be the live dogs our work suggested.
Minnesota too overcame early adversity to take control over Tennessee later.
Philadelphia delivered a relatively sweat-free cover, pulling ahead of the number by the intermission, and extending the margin in each the third and fourth quarters.
Save a stint in the third where the Jets were one point off the mark, New York too produced a fairly anxiety-free win.
The Patriots jumped out to a 10-0 start at the Cardinals, and remained in the driver's seat essentially throughout.
The 49ers offense proved functional versus the Rams formerly top-ten defense, while Los Angeles could not do anything right with the ball. The Niners won easily, keeping the visitors off the scoreboard entirely.
The Packers at Jaguars offered fireworks -- especially in the first half, where the two teams combined for five touchdowns and 38 total points. While the pace slowed dramatically in the second half, the early shootout between Rodgers and Bortles undid our play on the UNDER. In the end, the Packer's four point edge in the second quarter determined the outright winner, but the Jags' offense provided enough tit for the Packers tat to secure the cover.
Things that...not so much...
The Bears gave the Titans more than they could handle in first half, and even led versus the number through three, however, Chicago's inability to score was the story of the back half of the game, and the cover slipped away in the fourth.
The Bills held the hosting Ravens to a mere 13, but Buffalo themselves could not muster offensive production, and had to settle for 7 points when the final whistle sounded -- well shy of the cover.
Kansas City allowed Philip River's and the San Diego Chargers to go up 21-3 early. Remarkably, Alex Smith ultimately led the Chiefs back to the straight up win in OT, but the early deficit proved insurmountable for cover.
Dallas managed to move the ball into scoring position absent Romo, but struggled to find then endzone, settling for field goals in most cases. On the other hand, the Giants' Manning threw for three TD's, including the final score of the fourth, which put New York up by a point.