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Numbers guy and Stanford MBA Paraag Marathe has become a scapegoat for the 49ers' failure, but he's really the future of the NFL

Wednesday, Dec 28 2005
Down on the turf of Monster Park, the supposed face of everything wrong with the San Francisco 49ers is hidden behind a pair of Ray-Bans, half-watching as the collection of undervalued assets and overpriced commodities known as a professional football team goes briskly about the business of warming up. Paraag Marathe, the Niners' director of football operations, a handsome 28-year-old wearing a crisp navy blue suit and looking like something out of Mergers & Acquisitions, stands on the sideline next to the team's bench, talking about things like "inflows and outflows" and "constrained resources." He is explaining, in his bright and energetic manner, his approach to managing the budget and personnel of a National Football League franchise, while the assorted personnel of one such franchise, the Arizona Cardinals, grunt and grab themselves in front of him. "It's like a private equity fund," Marathe says -- and to know how far the NFL has come and where the league is today, one need only imagine the same words issuing from Vince Lombardi's mouth.

Here in San Francisco, Week 13 of the NFL's 86th season opens on a clear December Sunday that soon turns gray and cold. The 49ers are to play the Cardinals in an hour or so, a contest of interest only to gamblers and draft-order prognosticators and the drivers enjoying the unusually light game-day traffic on 101, a matchup whose lack of appeal Marathe explains thusly: "It's 2-9 versus 3-8." That's a nice way of saying that over the next three hours, the two teams will perpetrate a game only intermittently resembling professional football in a stadium at least 10,000 people shy of capacity.

Such is the sad state of affairs in San Francisco, where this year the excitement over a new coach, Mike Nolan, and a No. 1 draft pick, quarterback Alex Smith, has dissipated with every snap. Having won only three times thus far (with one game remaining) -- after two victories last year and seven the year before -- the 49ers are now well established as a league patsy, a depressing fate for a team that in the 1980s and '90s seemed to have a timeshare on the Super Bowl. It's no surprise, then, that a 49ers game these days is an exercise in nostalgia for a not-so-distant past. The fans who bother to show up at Monster Park merely serve as reminders of what the burgundy-and-gold once were, outfitted as they are like the back wall of a sports memorabilia store: The jerseys all read "LOTT" and "RICE" and "YOUNG" and "MONTANA," and sometimes even "OWENS." No other football team is as subsumed by the shadow of its own reputation.

Here on the sideline, behind the Niners' bench, is the man who has come to embody that faded luster: Paraag Marathe, Stanford MBA, former management consultant, salary-cap whiz, football's version of a CFO, and quite possibly the most defenseless scapegoat ever to enter the clutches of the Bay Area's preternaturally dense sports media.

Marathe's name -- his first sounds like "Prague," his last is pronounced "ma-RA-tay" -- first began to crop up last year, during the 49ers' much-fretted-over coaching search, of which he was a primary architect in just his fourth season with the Niners. Having provided a variety of statistical analyses for the team during his tenure, he'd already been tagged sneeringly as a "Moneyball guy," a reference to the Michael Lewis book about the Oakland A's and their rational, stats-based approach to building a baseball team. All of this made Marathe an easy target, and the press delivered a facile and predictable caricature. Here was someone "with no football background," a guy with a "kryptonite-powered laptop" and a name that suggested, for one writer, "a middle-of-the-pack member of the PGA's European Tour." The San Francisco Chronicle's Scott Ostler wrote, "[E]very time the 49ers make a big 'people' decision, the public-address announcer in my head says, 'Now batting for Bill Walsh ... Paraag Marathe!'"

Marathe and Terry Tumey, the Niners' director of football administration (and also owner of an MBA), were often lumped together. An anonymous critic described them to a Web site as "book-smart guys ... making football decisions with no knowledge of football" and as "smart people who think they're smarter than they are." While both apparently are "very smart guys," wrote Ann Killion of the San Jose Mercury News, they just "aren't seasoned NFL men. ...." Another writer was more emphatic: Marathe and Tumey "are not real football people." And what were Marathe and his kind, then, if not real football people? "Computer guys," Killion offered in another column, going on to quote an anonymous former executive: "They're like fantasy football guys." Marathe's bent for numbers sent one reporter running to his Bartlett's to disinter a quote from that noted football mind, Henry Clay: "Statistics are no substitute for judgment," though it's not clear who was arguing they were in the first place. "Who Is Paraag Marathe?" the Chron asked in a headline. It might as well have read, "Who Does Paraag Marathe Think He Is?"

Marathe, standing on the sideline, laughs at his portrayal in the newspapers. "Well, people are just threatened, you know?" he says. "Especially the coaching thing, because who the hell am I" -- a "random Indian guy," as he'd put it earlier -- "to go interview coaches? You should be using an old football guy and all that stuff.

"It's funny. I actually had one of my interns look at all the GMs and vice presidents and their backgrounds before they got the job. You'd be shocked: Half of them are what you'd qualify as 'non-football guys .'" (Later he'll ask that this quote not be included in the story, perhaps worried that he might seem defensive.)

In this sport, the distinction between "football guys" and "non-football guys" is critical -- and, as Marathe points out, meaningless and arbitrary. On résumé alone, for example, Atlanta General Manager Rich McKay is no more a football guy than Marathe; he was an attorney before entering the NFL, with no playing or coaching experience. Yet with time and good press McKay has earned a fraternity pin.

What's overlooked, or outright ignored, in this bickering over who can and can't be a football guy is the fact that football guys no longer drive the league. Today's NFL, 12 years into what's known aridly as the Salary Cap Era, is as much Paraag Marathe's as it is Vince Lombardi's. That's disconcerting to those who insist football stopped evolving around the time Lombardi was first hoisted on a set of shoulders, but there's no denying that what happens now in the front office, on all those kryptonite-powered laptops, all but decides what happens on the field. It's no coincidence that the best teams of the past few years -- Philadelphia and New England, last year's Super Bowl matchup, come to mind -- are also the most efficiently run businesses. Maybe the 49ers' problem isn't that they employ too many people like Marathe; maybe it's that they don't have enough.

In all likelihood, however, the mindless scapegoating of Marathe will continue. "I believe," he says, "it'd be half as bad if [my name] were Perry Martin. It's a name you can pronounce. That would cut it in half. If I were white, it would cut it by another quarter. If I were 10 years older, it would cut it by another 10 percent.

"The thing is," he continues, "I'll never be a football guy, even when I'm 45 or 50. I'll never be a football guy."

In 1993, the NFL adopted a salary cap as part of the league's collective-bargaining agreement with the players' union. The move is often credited, perhaps dubiously, with the rowdy success of the NFL in the past decade, during which time it's supplanted baseball as the American pastime. Facing penalties for exceeding the cap -- this season's ceiling has been set at about $85 million -- teams were forced to adopt a more efficient approach: No longer could the wealthier franchises simply stockpile talent; no longer could they afford to consistently overpay for free agents. As a source of moderately priced talent, the draft took on a greater significance, while the importance of signing and retaining stars greatly diminished.

The culture of the league began to shift as well. Football guys were still football guys, but with the success of the Patriots' Bill Belichick, who studied economics at Wesleyan, the coaching ideal moved away from the tyrant with the cigars and Patton quotes to a new model entirely: "Bill Belichick, CEO," declared one Boston Globe headline.

The 49ers, however, struggled within the financial strictures of the new system, becoming by the end of the 1990s the cautionary tale of the Salary Cap Era. San Francisco, the league's biggest spender in the year before the cap, mortgaged its future without apology, borrowing against 2004 for the sake of 1994. The approach yielded a fifth Super Bowl victory, but saddled the 49ers with a number of ill-conceived contracts that landed them $20 million over the cap in 1999, in what's known as "salary cap hell." There's no question the Niners' cap problems have contributed to their current woes on the field, but to what extent is open for debate. Writes Aaron Schatz, editor of the indispensable Web site and lead author of Pro Football Prospectus 2005, in an e-mail: "Um, like, 100 percent? No, let's try that again. The salary cap problems are the reason this team collapsed." Scot McCloughan, the team's vice-president of player personnel, agrees that the "front office was handcuffed" and "didn't have money" for free agents.

The solution was obvious. Says Jeff Angus, a management consultant and author of the forthcoming Management by Baseball: "If I'm the owner of the Niners, I'd say, 'How do you squeeze more value out of a dollar?' Given the financial complications of the salary cap, I would want at least one finance guy to look for loopholes, to tell me how to structure my money, to tell me how to get the best present value and ROI [return on investment]."

Enter Paraag Marathe, CFO.

The resurrection of the 49ers will happen first in the cell of a spreadsheet. It's a business matter, above all, as much about standards and practices as it is about X's and O's. "We have a history of that," Marathe says, referring to the team's old habit of structuring deals so as to minimize the immediate hit on the salary cap. "That's why we got in salary cap hell twice. 'Wow, they were in it in '99, and all of a sudden they were in it in '03, '04. What happened?' Truthfully, we didn't do anything different. We just swept it under the rug, swept it under the rug, swept it under the rug, and at some point it was going to catch up to us."

Today, with the Niners at last on stable fiscal footing with an estimated $20 million in cap room after the season, their approach is different. "The name of the game is not finding the best players, as conventional wisdom says," according to Marathe. "The name of the game is finding the best possible players for the lowest price. ... It's just being smart about managing your money. It's what a financial adviser would do for a client."

Two off-season acquisitions stand out: Marques Douglas, an underrated defensive end from Baltimore whom Pro Football Prospectus described as possibly "the most economically sound signing of free agency"; and, perhaps counterintuitively, Jonas Jennings, a 28-year-old left tackle who has missed most of the season with a shoulder injury. In March, Jennings signed a reported seven-year, $36 million contract. "People thought Jonas Jennings was an expensive free agent," Marathe says. "But... left tackles -- productive ones -- play a long time, and he was the youngest possible unrestricted free agent." Moreover, according to the NFL Players Association, the average base salary for an offensive tackle with four years of experience is about $5.8 million a year. "He's clearly better than an average left tackle, in our scouting view," Marathe adds. "To us, it was a great value."

There was a time Marathe thought he'd be on the other side of the negotiating table. Born in Sunnyvale and raised in Saratoga -- he played one year of football at Lynbrook High School -- Marathe steered himself toward the sports world from the beginning. As an undergraduate in UC Berkeley's Haas School of Business, he did marketing for the football team, thinking he'd probably wind up an agent.

Steve Tseng, a vice-president with IMG Consulting, where Marathe interned during college, says Marathe distinguished himself immediately. "He's got great energy," Tseng says. "It became clear early on that he was brilliant. Most interns take a while to come up to speed. They don't know how we want the work presented, how to find it. Anytime I asked Paraag for anything, it'd come back perfect."

After graduating, Marathe took a job as a management consultant at Bain & Co., where he helped a Fortune 50 company with its CEO search. He continued to drift along the peripheries of the sports world, as well. He advised "a very, very large sports footwear manufacturer," he says, and became "kind of the sports guy at Bain," which in the spring of 2001 led to a brief assignment with the 49ers. Under co-owner John York, a former pathologist and the ultimate non-football guy in the popular mind, and then-player personnel director Terry Donahue, the team was looking at new ways of valuing draft picks. (Marathe won't go into much more detail than that, and the Niners refused to make York available for an interview.) "I got along really well with Terry, Coach [Bill] Walsh [general manager at the time], John York, and they asked me to come on board," says Marathe, a longtime fan who wanted to remain in the Bay Area and make a career in sports. "It wasn't a tough decision."

He joined the team that fall as a special projects manager; the next year, he began working toward an MBA at Stanford. "[The 49ers] said it was part-time," Marathe explains, "but it ended up being 40 hours a week of work, 40 hours of school. I didn't sleep for two years."

His role quickly expanded. While he remains vague about the nature of his work, it's clear that by 2003, he at least had a voice in personnel matters. During that year's draft, he allegedly clashed with Walsh over trade proposals. Marathe insists the disagreement was "misreported," but Walsh -- for whom Marathe still uses the honorific "Coach" -- was later quoted as saying, "Can a computer help determine who you pick on draft day? I don't know, maybe it can."

In fact, Walsh seems conflicted about the matter. A friend of Marathe's runs a company called Protrade that, according to its Web site, "uses live market buy/sell activity to establish a predictive market of athletes." Walsh offers a plug on the site: "Athletic performance analysis is heading in this direction, and I think Protrade is going to lead the evolution."

Says Marathe: "Bill Walsh always made trades based on instinct and gut feel. I looked at it from an agnostic point of view and said, 'All right, how did those picks pan out?'" Marathe analyzed the previous 15 drafts and found that Walsh's instincts were unimpeachable. "All the research [showed] that the value of those draft picks [was] almost identical to the value Bill Walsh placed on them. At the end of the day, all we were trying to do was replicate the genius of his mind."

In football, the "debate" over statistical analysis -- over whether someone like Marathe has a place in the NFL -- has largely been a phony issue, something that plays out in the columns of a newspaper more than in a team's front office. This is especially the case in the Bay Area, where the name of the Oakland A's general manager, Billy Beane, is a shibboleth within a certain segment of the population and a profanity within another.

But football, as Schatz of points out, has always been "open to doing objective analysis, even if it's not mathematical." What else is game tape study, for instance, if not objective analysis? As far back as the 1960s, Gil Brandt of the Dallas Cowboys was using computers to help determine the value of draft picks, in an era when just about everyone else was picking names out of sports annuals. Last year, the two most statistically minded organizations in the league -- the Patriots and the Eagles -- played each other in the Super Bowl.

What the 49ers are doing, as Schatz wrote in defense of Marathe in Pro Football Prospectus, "is not new." And yet the media insist on pushing a perception of the NFL as a wilderness of pure masculinity where no one need touch a computer. "My goal," Schatz says, "is not to change the world of football. It's to change the world of football coverage."

This season, Marathe, the non-football guy -- whom Beane has called "a very bright young man" -- was promoted to director of football operations, a senior front-office position in the organization, making him responsible for negotiating player contracts and managing the salary cap. The arc of his career is clear. As York told the Chronicle in January, "I don't think at this point in time that Paraag has the experience to be the general manager. I think over time that he could."

"Here," Marathe says in his office, grabbing a heavy volume from a shelf behind him. "My recent reading." Offensive Football Strategies is the title, and what the work lacks in plot and character development it makes up for in technical expertise. "It's a book by a bunch of ex-coaches who talk about, for example, the quick passing game," he explains, flipping open to the contents page. "I just find it really interesting. LaVell Edwards talking about adjusting pass defense. Tom Nugent on shifting into the I formation. Joe Paterno on creating an offensive philosophy. I've just been a student of [football]. Obviously, I know it a lot better than people think I do, but I know it a lot less than our coaches, than guys who have played the game."

Marathe's office is tucked into a corner on the second floor of the 49ers' headquarters in Santa Clara, a building that, given its sleek look and location, might as well be another Silicon Valley tech company. The room is spare and well ordered; the dry erase board is a Technicolor mess of reminders and inspirational quotes. On his desk are color-coded depth charts for the team's upcoming game against Seattle -- red is for unrestricted free agents, yellow for restricted free agents, green for players on injured reserve. "I give this to all our pro personnel guys," Marathe says. "When they watch the game, they can say, 'All right, I better make sure I pay attention to Steve Hutchinson and Shaun Alexander, because both of them are scheduled to be UFAs, and maybe we'll want to go after them.'" This is the NFL in the Salary Cap Era: a football game with players moving across the field like stocks on a ticker.

"The perception," Marathe says, "is that I'm sitting in here, I've got a laboratory coat on, I've got a protractor and a pocket protector, and I'm just coming up with wacky things. But, no: All I'm trying to do is take things that are complicated and make them less complicated, so that they can make a quicker and more educated decision -- 'they' being [VP] Scot [McCloughan] and Coach [Nolan]."

The most important work Marathe has done thus far for the team -- and the most instructive, as far as his method is concerned -- was last year's coaching search, which led to the hiring of Baltimore's defensive coordinator, Mike Nolan, son of former Niners coach Dick Nolan. As Marathe says, "We had a microscope on us, because of the fact we were 2-14 last year and there was all this turnover" -- coach Dennis Erickson and GM Terry Donahue were jettisoned at season's end -- "and then, all of a sudden, John York is using this random Indian guy to help interview head-coaching candidates, and by the way, what the hell is his name?" The coverage was predictable. Marathe says he was mocked for saying that "a head coach in today's professional sports environment is much like a CEO of a Fortune 50 company." "The 49ers," one critic wrote, "are conducting their head-coaching search like the Keystone Kops." In the Merc, Ann Killion again took on the team's circle of non-football guys, whom she described as "a pathologist who married well, a 28-year-old MBA whose background is as a corporate consultant, and a former college nose guard turned budget analyst." She wrote: "The 49ers' first step toward legitimacy had all the makings of a Saturday Morning Live skit. Right now, the 49ers have no NFL credibility. None. Zero. Zilch."

Part of the problem, Marathe says, was that the Niners were one of three teams looking for a head coach, "and we were the only team doing the nonconventional approach." In football, he says, the "common business practice" is the old boy network: "'I knew somebody who knew somebody who knew somebody else who knows him.'" Or maybe there's a hot college coach whose name gets dropped nightly on SportsCenter. The 49ers, however, "wanted to be agnostic about the process," Marathe says. Sifting through the past 25 years of NFL history, they identified a dozen or so of the most successful coaches based on measures like playoff appearances, average victories per season, and team improvement in their first two years on the job. The list that resulted could probably be drawn up in 10 minutes on a cocktail napkin in a sports bar -- Joe Gibbs, Bill Walsh, Bill Belichick, Andy Reid, Mike Shanahan, and so on -- but what happened next was unique: They identified the traits those "superstar head coaches" had in common, traits that Marathe placed in two "buckets." "The first bucket is, What did those superstars possess prior to getting the job?" he explains. "Who else did those superstars work for before they got their chance? What was their background? In their previous jobs, if they were coordinators, did they improve their unit? The second bucket is, What did they possess during their job that made them successful? That was a little more subjective, but we were able to do a ton of research." From his analysis, he discovered that the best coaches tended to have worked on the staffs of winning teams, often under other top coaches. In addition, he found that nearly all of the superstar coaches were disciplinarians by reputation.

Using those traits as screening criteria, the 49ers whittled down the list of candidates to just a handful -- coaches who hit on most, if not all, of the important measures. "Boiling the ocean," Marathe calls it. An advisory committee that included former 49ers players and coaches further thinned the list, down to five who would go on to interview. (Noticeably absent from the interviews were any college coaches. Marathe, while emphasizing that there were "a lot of other factors," points to the track record of college coaches making the jump to the pros without any prior NFL experience. Only two or three have had career winning records.)

The interviews -- all but one of them conducted in a hotel in St. Louis, away from media scrutiny in the Bay Area -- were epic sessions, some lasting six, seven hours, straight through lunch and into the afternoon. The questions ranged across the spectrum, but they all coalesced around a single point. "You're not just looking for a guy who's a head coach," Marathe says. "You want a guy who can manage the inflows and outflows of personnel, and understands that, in the Salary Cap Era, you're going to have churn on your roster. How a coach can manage churn, or how he understands that he has to manage that churn, is an important part of today's football knowledge."

One of the candidates, Jim Schwartz, a defensive coordinator with the Tennessee Titans in his first interview for a head-coaching job, took notice of the 49ers' novel, historically informed approach, something he "really respected." "When you saw some of the names who were interviewing," he says, "one of the things that stood out was that I was coming from a team that was 5-11. Usually, you're not getting many calls when the team is 5-11. People like the flavor of the month." When he was called in for an interview, Schwartz "realized they were looking a little bit beyond who was a hot name at the moment. ... They had no prejudice going in."

The 49ers went with Nolan, someone with "all the elements," Marathe says. "He blew away the interview process. In his quotes, at his press conferences, he exudes all of the qualities of an inspirational leader, a guy who the team rallies around and looks to for vision and direction. At the same time, he's a disciplinarian. He's exactly what we're looking for." Most importantly (at least as far as the media are concerned), he was a football guy, with a football-guy pedigree. Nolan, like everyone on the team, has struggled this year, but he seems to have charmed the Niners' legion of critics. After his successful debut, for example, the Merc's Killion swooned: "He was a leader on the sideline, coordinating his team, planning his strategy, aware of everything."

"Nolan," she wrote, unwittingly making Marathe's point, "was a CEO on the sideline."

"A lot of times," says Jim Schwartz of the Titans, "what happens in the media and even in the fan base is that if people don't understand, they fear it." In the football world, according to Schwartz, people hesitate to lean on complex statistical analysis because they "don't know or don't have the expertise." "When you start using words like 'regression analysis' and start using statistical modeling, you sort of go over their expertise," Schwartz says. "They don't have the background in those kinds of things that Aaron [Schatz of] or Paraag has."

Jim Schwartz is a football guy, to be sure. He's in his fifth season as the Titans' defensive coordinator and has worked the sidelines in some capacity since 1989. But he's a different kind of football guy, one who understands and appreciates what non-football guys like Marathe are trying to do; he is a football guy who knows his way around a regression. The man graduated from Georgetown with honors in economics, after all. There's an old Gil Brandt quote he likes to use: "We're taking one step closer to the dartboard than everybody else."

It's only a matter of years, maybe months, before someone makes Schwartz a head coach, and when that happens a cheer will go up from behind all those kryptonite-powered laptops. His hiring would represent at least a small shift in the terrain, if only because he'd be the first coach who, more than just being open-minded about numbers, candidly touts his alliance with the statheads. Those who fancy themselves doormen to the mythic football fraternity will be confused, infuriated even. They might even have to rethink the fraternity.

Would Schwartz want someone like Marathe in his front office? "Oh, certainly," he replies.

And why is that? Schwartz doesn't hesitate. "I think he's a football guy."

About The Author

Tommy Craggs


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