SI Curse: Contrary Indicators 101

My last final of the semester was yesterday, so I should be able to post much more frequently over the next few weeks, just in time for the Eagles stretch run. There’s a lot to be said there, and a few things I started and have to finish, but today I want to illustrate the “SI Cover Curse”.

Obviously, being on the cover of Sports Illustrated, as Nick Foles was last week, does not actually “curse” its subject. So why does it seem to work so often? Basically, it’s because it HAS to work; that’s how the system is designed.

Items with covers that change by installment use those covers to drive sales. Think of the gossip magazines paying millions of dollars to celebrities for exclusive pictures. They do that because people decide which ones to buy based on what the see on the cover. Beyond the brand, it’s the only real advertising available. As a result, you only get “attention-grabbing” cover subjects.

Now let’s look at a normal career arc for an NFL player (or any athlete). I apologize for the crudeness of the drawing.

Generally, players start slowly as they adjust to the NFL game (and get bigger/stronger). After an initial period of development, they plateau, and remain there until they get old and decline. Pretty simple. Let’s take that graphic and break it into those sections.

Note that this tracks closely with relative fame. Very few players are really famous upon entering the league. Similarly, very few players maintain their level of fame after they decline and retire. That has obvious implications for magazine covers. They don’t put nobody’s on the cover of Sports Illustrated (well, rarely).

Of course, that curve is far too smooth. So let’s add a layer to show the general oscillation of a player’s career skill/fame. Every player has peaks and valleys, which oscillate around the longer term average.

These are rough approximations, obviously some players have drastically different career arcs (injuries, in particular, can throw things off). However, looking at the larger point: when, in the graph above, do you think a player is most likely to be on the cover of Sports Illustrated, or any magazine for that matter?

How about at these points:

At the highlighted points above, players are at their short-term peak in fame/significance. That’s when they’re most likely to be put on the cover of Sports Illustrated. And in order for it to be a “peak”, it MUST be followed by at least a short-term decline thereafter (otherwise it wouldn’t be a peak). That’s the essence of the “Sports Illustrated Curse”. Generally, players only get on there if they’ve been playing extremely well. For example, looks at these headlines and decide which ones are actually interesting:

– No-name player plays badly!

– Famous player plays well!

– No-name player plays well!

– Famous player sucks!

You don’t have to be a marketing major to realize that the bottom two are the better “stories”. Moreover, for a “no-name” player to actually get on the cover, he has to more than just “play well”, he has to be lights out, or be involved in a singular moment of some large significance. This is why Nick Foles was featured. Outside of Philadelphia, nobody knew who he was, yet he’s putting up a historically good streak of play. That’s a story.

However, it’s only a story because he was playing SO well. If he had been merely “good”, he wouldn’t have made it. That leaves us with just two possible consequences of the following statement:

Nick Foles, relative unknown, played historically well for a short period of time. Then…

– Nick Foles was just that good, and continued to play at that level until he had broken nearly every NFL passing record.

– Nick Foles was not actually the greatest QB ever, and his subsequent performance declined soon after.

Now, if the second option happens (as the odds suggest is an almost certainty), it won’t be because he was “cursed” by Sports Illustrated. Encouragingly, Foles has been playing SO well that a somewhat significant decline in performance will still leave him as a very good quarterback.

The system within which the magazine business operates is built upon capitalizing on short-term over-performance. It’s no surprise that cover subjects experience a decline in performance/fame soon after. The level of play required to get Nick Foles on the cover of SI is almost certainly unsustainable; consequently, it won’t be sustained!

So the “Sports Illustrated Cover Curse”, while not an actual “curse”, is not complete bullshit. It’s a valuable contrary indicator for those who know how to properly evaluate it within the larger context of the player/team/league/etc…

Lastly, this isn’t just a sports-related phenomenon. It’s relatively well-known in the investment industry, though it’s tough to follow due to the long-term nature of the trends (2 year lag for an inflection point after a 30 year trend is on point, but tough to make money from). For example…

From 2005 (the market peaked in 2007):