You are a free subscriber to Me and the Money Printer. To upgrade to paid and receive the daily Capital Wave Report - which features our Red-Green market signals, subscribe here. The Illiquid Market for NFL Head Coaches and Why It Matters to Wall StreetTen NFL head coaching job openings... and how many really good coaches?
Dear Fellow Traveler, When the NFL’s Buffalo Bills fired Sean McDermott on Monday, my first reaction wasn’t outrage or celebration. I stopped thinking like a team fan and more like an economist. McDermott isn’t a perfect coach, but he’s had a 98-50 record at the helm, and got the team to the postseason, where he was a modest 8-8. This has turned into one of the strangest NFL coaching cycles I’ve ever seen. Historically successful coaches are being shown the door. McDermott in Buffalo. John Harbaugh is out in Baltimore (and later joined the New York Giants). Mike Tomlin is stepping away from the Pittsburgh Steelers. He’s not fired, but still gone from the sideline after making the playoffs and having yet another winning season. The latter two are likely heading to the Hall of Fame. Typically, this is not how coaching cycles usually work. Normally, the league shuffles the bottom of the deck, where the worst-performing teams dump their coaches and hire someone else’s discharge. Rebuilding teams will speculate and roll the dice on young coordinators from other successful teams. Owners also convince themselves that “culture” can be installed like a software update, when it takes a lot of effort and persona to win over a locker room. Winning teams, however, don’t usually go that route. So, what gives? Let me give you a different perspective on the NFL coaching carousel than you’ll see on ESPN. What’s happening is something sports people rarely talk about, because it requires a deeper understanding of economics. First, expectations among top-tier teams are Super Bowl-or-bust. We now know that, with the moves on the teams in recent weeks, Buffalo and Baltimore. Second, and more importantly, NFL head coaching is an extremely illiquid market. And the decisions being made reflect this. Why NFL Head Coaching Is IlliquidThere are 32 of these head coaching jobs on the planet. Each one comes with responsibility for a franchise worth at least $5 billion, a locker room of highly paid, highly fragile egos, a coaching staff that operates like a small corporation, and an owner whose patience is inversely proportional to how often ESPN says their name… plus the many other things that come with this job. This is not just play-calling. Many people can design plays. My daughter designed one of our soccer plays this year. The ball ended up on the street. But there are very few who can run the entire building in the NFL. A modern NFL head coach must manage a staff of 30 to 40 people while serving as CEO, psychologist, strategist, and public spokesman. He has to navigate ownership politics without appearing political, develop quarterbacks while protecting them from themselves, handle media pressure that would fold most executives in a week, and win now while pretending to build for later. Can you name the head coach of the Detroit Lions? Or the coach of the New England Patriots? Or the head coach of any NFL team? Odds are that you can. The average NFL team’s value is $7.1 billion. Brinker International, the parent company of Chili’s and Maggiano’s, has a market capitalization of roughly $7.1 billion and ranks around 900th globally in market cap. Can you name their CEO? Or the name of any CEO whose market capitalization ranges between $5 billion and $13 billion (the range of NFL team values)? There are 150 of those companies on the Russell 2000. Name one. These are important people. Their jobs require SEC compliance, quarterly earnings calls, activist investors circling, supply chain complexity across hundreds of locations, and constant franchise relationship management. And yet. The talent pool for that kind of job is probably as thin as the one for NFL head coaches. The comparison isn’t about the similarity of business models. It’s about the scarcity of people trusted to run complex systems at scale. These are different skillsets with similar constraints. The difference is that nobody watches Brinker’s board meetings on Sunday afternoons. That’s illiquidity meeting public pressure. And it changes the math on everything. Scale Makes Markets Tighter, Not BroaderLet’s zoom out. We’ll go BIGGER on a CEO search. In 2017, I spoke with an executive recruiter about ExxonMobil (XOM). He asked me a simple question. “How many people do you think could run Exxon right now?” I guessed 100. He laughed. He said the real number was probably eight. Then he explained why. To run Exxon, you don’t just need to be a good manager. You need to be a petrochemical engineer by training. You need experience running an 80,000-person global organization. You need deep operational knowledge across upstream, downstream, and refining. You need geopolitical fluency. In 2017, that meant relationships in Russia, China, the Middle East, and Washington. You need capital allocation discipline at a scale where mistakes cost billions. You need credibility with governments, regulators, unions, and sovereign partners. You need a strong finance background to allocate capital across decades, not quarters. Yes, there might be 25 or 30 people on Earth working toward that role. But at that moment? Eight. And here’s the real constraint. How many of those eight are actually available? Consider the things that stop people from taking these jobs. Think non-competes. Golden handcuffs. Reluctance to uproot families. Unwillingness to inherit someone else’s political mess. Timing that doesn’t align with career windows. Suddenly, the number isn’t eight anymore. It’s three or four. That’s a major reason why executive compensation looks insane to people who don’t understand illiquid markets. High failure rates don’t imply abundant talent. They imply how unforgiving the job actually is. You’re not just paying for labor. You’re paying for scarcity and availability at the exact moment you need it. NFL head coaching works the same way. When something goes wrong, there really isn’t a massively deep bench to pull from. Illiquidity Meets the Money PrinterNow layer in the part we talk about here all the time. Money printing. Constant monetary support. Liquidity injected through specific pipes. People love to ask why CEO pay has exploded relative to the average worker. They usually ask it as a moral question. It’s not. It’s a structural one. Once you understand that executive labor markets are illiquid, the compensation outcomes stop looking mysterious and start looking inevitable. And this was supercharged in 1993. The Clinton-era executive compensation tax cap limited the deductibility of cash wages above one million dollars. Section 162(m) of the tax code. The intention was political. The result was financial engineering. Companies didn’t stop paying executives. They changed how they paid them. Stock. Options. Performance grants. Long-dated incentives tied to equity prices. The law had performance-based exceptions that companies exploited aggressively for decades. The 2017 tax law closed some of those loopholes, but by then the incentive structure had already reshaped how corporate America compensated its top tier. And here’s what really matters. At the exact same time, the monetary regime shifted toward persistent liquidity support, declining rates, and asset-price sensitivity as a policy feature rather than a side effect. You couldn’t have designed a better machine for equity-linked compensation if you tried. Executives weren’t just being paid more. They were being paid in instruments that directly benefited from money printing. And here’s the uncomfortable part. This wasn’t a loophole. It was an adaptation. If you’re running a trillion-dollar balance sheet in a world where capital is abundant but competence is scarce, you don’t price labor like a factory job. You price it like a rare asset. That’s why CEO pay doesn’t track wages. It tracks liquidity. Explaining a system isn’t the same thing as endorsing it. But you can’t change what you refuse to understand. Why This Matters for the NFL TooThe same forces apply to NFL head coaching. Owners aren’t just competing with other teams. They’re competing with timing and replacement risk in a brutally thin market. When you lose a viable head coach, you don’t just lose a play-caller. You lose institutional knowledge, staff cohesion, quarterback development, and cultural stability. In an environment where franchises are worth $6 billion and media and fan pressure is relentless, the cost of getting it wrong is enormous. Owners don’t fear paying too much. They fear getting it wrong with no viable second option. That’s why contracts look bloated. That’s why buyouts are massive. That’s why “overpaying” is often the rational move. Illiquid markets plus abundant capital always produce the same outcome. Scarce operators capture outsized rewards. Back to Buffalo and BaltimoreWhich brings us right back to this coaching cycle. It’s incredible to see the winning records of both McDermott and Harbaugh. McDermott isn’t responsible for Josh Allen’s turnovers (nor is he responsible for tough refereeing calls), and John Harbaugh didn’t kick the ball 80 miles right of the uprights during their season-ending loss to Pittsburgh. Both franchises set very high standards and have two of the most prized assets in all of sports: Josh Allen and Lamar Jackson, two future Hall of Fame quarterbacks who are in their primes and in win-now mode. Someone like Ravens owner Steve Bisciotti has shown a clear preference for a CEO-style head coach and is willing to tolerate occasionally tough seasons that can build toward future success. He likes stability in business, and that’s evident in that he started by building a recruiting company in Aerotek. That’s not accidental. Baltimore is a complex organization. It values continuity, internal development, and stability. Those issues set the internal framework for how the team assesses its hiring strategy. At this point, it helps to step out of fandom entirely and think in terms of market structure. What follows isn’t a ranking, a prediction, or a scouting report. It’s a thought experiment designed to show how decision-making works in an illiquid labor market, where demand is high, supply is thin, and the cost of getting it wrong is enormous. The specific names don’t matter. They’re placeholders to illustrate scarcity, not endorsements, rankings, or predictions. So you start with the key question… How many people on Earth could run the Baltimore Ravens right now? Let’s say the Baltimore Ravens start looking for a CEO archetype for their head coach. In a market like this, the first filter isn’t scheme or personality. It is availability. There are only a handful of proven, CEO-style head coaches, league-wide. You can argue about who belongs on that list, but the number itself is the point. You can think of names like Andy Reid, John Harbaugh, Dan Campbell, Sean McVay, Sean McDermott, and Nick Sirianni. Again, let’s not get into a debate, but let’s say those are the only six… and they just fired one of them. Four others are taken. At the same time, one of the few internal succession options had already exited the system. Former Ravens defensive coordinator Mike Macdonald took the Seattle job last year, removing a potential low-friction replacement from the pool. That’s a supply shock. And he’s out. That further tightens the candidate market… and likely increases the cost of the next CEO who may have similar qualities. Now, the search party is assembled… and the focus starts to center on the ability to manage like a CEO and reflect the values to the organization. Oh, and they have to likely get the approval of the team’s star player, Lamar Jackson… At this stage, the search shifts from known quantities to probability management. They have to look for the “next guy” in the pile of coordinators out there. Teams are now forced into probability management, evaluating coordinators with far less information and far higher variance, often while competing with other franchises for the same small pool of candidates. The examples below aren’t assessments. They’re deliberately unresolved cases meant to show how little certainty exists at this stage of the decision tree. Who knows if Jesse Minter in San Diego or Klint Kubiak in Seattle fit that CEO profile until they interview them (and they are being considered for other jobs)? What about Bears Coordinator Declan Doyle, who many in the industry think could be the next big thing as a CEO? He’s available, but he’s only 30 and ran an offense for one year. How would a 35-year-old veteran respond to him? These questions matter in our hypothetical. Once we run that analysis, we can see the list is thin… in terms of supply. But then, look at demand. All the while, rival Buffalo is likely also seeking a CEO-like coach, while six other franchises are still looking for a coach and might shift to a CEO-like leader. That creates more demand for the dwindling supply… and the calculus changed after Buffalo fired its coach. It’s entirely possible that both teams have a short list of two or three candidates, and those candidates are also on the short list of three other teams. This is what talent illiquidity looks like in practice. Demand is high, supply is low. The same dynamic exists on Wall Street, especially as market capitalization increases. How many people could run Apple today? How many people could take over Amazon in 12 months or three years? There are armies of people who are answering those questions, and plenty more, figuring out what sort of compensation package to offer that small pool of candidates when the time comes. That’s because getting it wrong has incredible consequences for any organization. It gets dizzying… and there’s a lot on the line. In the end, Baltimore and Buffalo didn’t just fire a coach. They exited a thin labor market at a moment when replacements are scarce. So, we end up in situations where coaches like John Harbaugh are paid millions of dollars just to leave Baltimore so they can search for a similar coach… only to spend lots of money on someone they hope can fill the void. It requires an incredible amount of vetting, trust, vision, and… of course… luck. It’s the same system... with a different uniform. Stay positive, Garrett Baldwin About Me and the Money Printer Me and the Money Printer is a daily publication covering the financial markets through three critical equations. We track liquidity (money in the financial system), momentum (where money is moving in the system), and insider buying (where Smart Money at companies is moving their money). Combining these elements with a deep understanding of central banking and how the global system works has allowed us to navigate financial cycles and boost our probability of success as investors and traders. This insight is based on roughly 17 years of intensive academic work at four universities, extensive collaboration with market experts, and the joy of trial and error in research. You can take a free look at our worldview and thesis right here. Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. 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