Dynasty GAAP Memo: Sam LaPorta
I am a CPA who fits the typical accountant stereotype. I enjoy writing technical accounting memos, accounting research (yes, it’s a thing), and analyzing the financial statements of a business. In accounting, you often must evaluate qualitative and quantitative factors during complex transactions to forecast future performance. I have found that the outlook and rationale of evaluating business transactions parallels another interest of mine, dynasty fantasy football.
In dynasty, we are given both quantitative factors (athletic scores, draft capital, college production, etc.) and qualitative factors (camp hype, team situation, injury history, etc.) that we must consider and evaluate to derive an estimate or projection of a player. Then, we must take calculated risks based on our team’s overall financial statements (i.e., current roster and league). I could go on and on with accounting-based puns and comparisons, but I think you get it.
I will note that I will write in the form of “accounting memos”. For anyone who has not been exposed, the format is very standard. Each memo will start with the “purpose”. Next, it will outline the applicable “guidance” or accounting literature utilized and supply background. Last will be the analysis and conclusion. The goal is to state the issue and quickly address it. My write-ups will follow this same logic.
To summarize, welcome to “Good at Analyzing Players” or “GAAP”. And yes, this is a play on “Generally Accepted Accounting Principles” and my wife did come up with it.
Purpose:
The purpose of this memo is to evaluate the vesting period for rookie tight ends and evaluate how Detroit Lions TE Sam LaPorta could have vested immediately upon being drafted.
Background:
Sam LaPorta (“LaPorta”) is 22 and three games into his rookie NFL season after being selected 34th overall (second round) in the 2023 draft by the Lions. He was a three-star prospect coming out of high school. After spending four seasons with “Tight End University” at Iowa, he evolved into a versatile NFL prospect with a big frame (6’ 3” and 245 pounds), above-average blocking ability, and a diverse route tree with elite YAC ability.
Please see the metrics and discussion points below:
- Breakout Age: 20.6 years old (64th Percentile)
- 40-Yard Dash Time: 4.59 seconds (91st Percentile)
- Burst Score: 122.8 (76th Percentile)
- Speed Score: 108.4 (86th Percentile)
- College Stats (University of Iowa):
- 2019: 15 Receptions; 188 Yards; 0 TDs
- 2020: 27 Receptions; 271 Yards; 1 TDs
- 2021: 53 Receptions; 670 Yards; 3 TDs
- 2022: 58 Receptions; 656 Yards; 1 TDs
- DLF Dynasty Rankings:
- Overall: 107
- TE: 10
- Fun Stuff:
- George Kittle said: “LaPorta is going to be fantastic. I think he is the best tight end in the draft class. I think the Lions got a complete steal.”
- In his first three games, he has the most receptions by a tight end and is the first tight end to tally five catches in the first three games.
- In high school, he had 3,793 receiving yards and 50 touchdowns.
- The 2023 Iowa Hawkeye Pro Day was attended by all 32 NFL Teams.
Resources:
- Sleeper: Great interface for looking up historical statistics
- DLF Dynasty Rankings: Best dynasty rankings in the Industry
- DLF Average Draft Position (“ADP”) Data: Best resource to gauge current player value. Based upon real dynasty startups.
Analysis:
Equity compensation, also called stock-based compensation, refers to stock granted to employees as part of a pay package. However, it is common for stock-based compensation to have a “vesting period” where the employee gains ownership of the stock over a period of time. An example of this is that an employee could vest 20% in year one, 30% in year two, and 50% in year three. The thought is to retain talent by deferring compensation.
In fantasy there has long been a standing stigma surrounding the tight end position and that it takes “three years” for players to vest (or produce) in the NFL and become fantasy viable. This two-to-three-year period aligns with the deferred ratification of stock-based compensation. This is an interesting sentiment to examine in the context of LaPorta as he has burst onto the scene in the first three games of his career. The table below examines the top 12 tight ends per DLF rankings and their first three career games.
The table above is the best 12 dynasty tight ends in the NFL today and outlines how they started their respective careers. They produced on average three receptions for 34 yards with a 62% snap share. This confirms the “vesting” period concept that tight ends do not immediately produce for fantasy managers. Many fantasy managers implement a “do not draft tight ends in rookie draft” methodology. This theory is predicated on the fact that young tight ends are often cheaper after their rookie seasons than they were before them. Trey McBride, who was widely considered to be the TE1 in the 2022 draft, is a notable example of this sentiment paying off, when his ADP dropped by 21% from 144.5 in September 2022 to 183.8 in September 2023.
Meanwhile, LaPorta has averaged 6 receptions for 62 yards, which is 99% and 82% higher than the averages noted above, respectively. He might be accelerating his two-to-three-year vesting period. Companies might accelerate a vesting schedule for a stock-based compensation due to performance, which creates a higher “present value” for that employee. In our case, the Lions have clearly given him this opportunity with 22 targets through three games and it is already paying dividends. This illustrates that he might be an outlier within the historical tight end data set and vested immediately upon being drafted.
We can utilize a discounted cash flow model to estimate LaPorta’s present value. Discounted cash flow refers to a valuation method that estimates the value of an investment using its expected future cash flows (or fantasy points). In this case, we can extrapolate the averages above over a 17-game season.
While extrapolating the average is not a perfect way to derive projections, it does present a good indication that LaPorta is well on his way to becoming a long-term TE1 in dynasty. To discount the projections above, we should consider other qualitative factors that could overstate his production thus far. These include:
- Jameson Williams, who the Lions drafted 12th overall in the 2022 NFL Draft, was suspended six games for violating the league’s gambling policy. In week seven, he will rejoin the team and introduce another target for Jared Goff. Upon his return, LaPorta could see a downtick in targets.
- Amon-Ra St. Brown, who has been struggling with a turf toe injury since week two. While he hasn’t missed any games with the injury, turf toe injuries have variable impacts on performance. This could have limited Brown the last couple of weeks, which gave way to more targets for LaPorta.
- Jahmyr Gibbs, who the Lions drafted 12th overall in the 2023 NFL Draft, has been ramping up his usage over the last three weeks. He is currently averaging a 45% snap share and has two games with only two targets. Gibbs is an electric pass catcher and should garnish more and more targets as the season goes on.
Managers should be aware that LaPorta’s targets through the first three weeks of the season should potentially be discounted. For the sake of this exercise, we will assume a 20% discount rate which means his rest of season production is 80% of the average of weeks one through three. See the calculation below:
While the 20% discount rate is judgmental in nature, the updated cash flow model with the discount factored in is a good way to exercise the ‘Conservatism Principle’. This principle simply means that if there is uncertainty about incurring a loss, you should tend toward recording the loss. Thus, when given a choice between several outcomes where the probabilities of occurrence are equally likely, you should use the most conservative outcome. For us, that would be discounting the projections.
The projection, even after being discounted, is what makes LaPorta’s value so intriguing. The table below outlines the receptions and yard totals for the top 12 tight ends in 2022 and compares them to LaPorta’s projections above (with the 20% discount).
Even with the 20% haircut, he would have finished second in receptions and third in yards in 2022. If you continue to discount by 30%, he would have finished sixth in receptions (71) and seventh in receiving yards (738), which would still obviously finish as a TE1 on the season.
Conclusion:
LaPorta is proving to be an abnormality and seemingly vested immediately upon entering the NFL. He is well on his way to finishing as a TE1 in his rookie season. Based on the wasteland that is fantasy tight ends, I would be utterly shocked if he does not finish within the top seven TEs this season and for the foreseeable future (pending health). I tend to value him closer to TE4 overall (spicy!) based on the offense that he plays in, his production this far, and his age. This conclusion was corroborated by the projections above when comparing to 2022 tight end totals.
If I don’t have Travis Kelce, TJ Hockenson, or Mark Andrews, I am actively trying to obtain LaPorta. Here are a couple of trade ideas:
- Overall, my first thought is to use my current TE1 on my roster to get LaPorta. Hopefully, you have one of the second-tier TEs. In the second tier of tight ends, I would include Kyle Pitts (woof), Dallas Goedert, George Kittle, Dalton Kincaid, and Pat Freiermuth. If the LaPorta owner is still trying to figure out what they have, I would be sending any of the players above in an even swap. The hope is that the owner would want the more established asset based on the stigma surrounding rookie tight ends. To get it done, I would even throw in a rookie third or fourth rounder if needed to buy years back.
- I would also be sending a future mid to late first-round rookie pick, especially if I don’t have a tier one or two players at the position and it’s a tight end premium format.
“You know, somebody called me underwhelming one time, and I was like, ‘Alright,’”
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