This article was originally published on Cold-Brewed Bets.
Let’s be honest with ourselves…
It’s never not NFL season.
If there aren’t actual games, then it’s the anticipation of free agency, the draft, the schedule release, training camp…
The NFL is unlike any other sport in that no matter what time of year it is, for fans it’s always captivating our attention at some level.
And this is even more true if you’re a bettor.
At this point with the schedule being released earlier this month, we pretty much have almost every NFL betting mark open: Win Totals, Division/Conference/Super Bowl Futures, Make/Miss Playoffs, Award Markets, and Week 1 Point Spreads.
Hell, there are even places that have put up point spreads for every single game for Weeks 1 thru 18.
It’s safe to say that the NFL season is foremost in our minds, and because of that, it’s time to start thinking about making some bets.
And for me that means starting by creating my 2023 Pre-Season Power Ratings.
NFL Betting: What Are Power Ratings?
Power ratings are the set of numbers almost all professional bettors and bookmakers keep on teams that help them determine point spreads for every game.
For example, you may have Kansas City power rated as -7; meaning they’re around 7 points better than an average team.
You might have Houston power rated as a +7; meaning they’re around 7 points worse than an average team.
If KC played Houston on a neutral field (so no home-field advantage factored in) the point spread would be KC -14 (the difference between -7 and +7).
These ratings get adjusted as the year goes on based on how teams perform, injuries, and everything else, but every week they serve as the starting point in determining what the point spread of a given game should be.
And therein lies a key point about power ratings: They’re a starting point.
No professional bettor or bookmaker - at least the good ones - believes that their power ratings are the end all, be all; they have to be willing to adjust based on what the game market is telling them (more on this in a minute).
For bettors who make their own numbers, strong power ratings can help them make bets before a point spread may move and get them "Closing Line Value" - meaning the number they bet is more favorable than what the number is when the game starts.
An example of this would be betting a favorite at -2.5 when the number closes -3, or an underdog at +3 when the number closes +2.
The theory is - especially in the NFL market - that the more of these kinds of bets you make, the more you will win in the long term because you are getting the best of the number.
How to Create Your Own Set of Power Ratings
I can remember back to when I first started betting. I would listen to people on podcasts and shows talk about ‘making their own numbers’ when it came to the NFL.
The concept sounded so complex to me, and whenever I would ask someone on social media, I could never get a straight answer either.
But there was one concept I kept hearing over and over again: The NFL point spread market is one of the most—if not the most—efficient markets in all of sports betting.
So what does it all mean? Consider this…
NFL sides—meaning which side you bet on; underdog or favored—have more money bet into them on a regular basis than any other sports betting market. We’re talking 6-and-7-figure bets being made every Sunday.
And what value do these bets and money hold to the sportsbook?
Data they use to move the point spreads throughout the week, so that come game time, the closing point spread is a pretty accurate representation of the true difference between the teams, based on the thousands of opinions registered through bets and money.
I have to shout out Ken Barkley, writer over at The Chalkboard and one of the hosts of You Better You Bet, for this.
I’ve listened to YBYB religiously for a few years, and one of the things Ken routinely talks about is the efficiency of NFL side markets - meaning that the closing point spread is probably the best indication we have of the true difference between a team, especially as the season goes on.
And it was thanks in large part to Ken that I was finally able to grasp this concept of market efficiency, and use that to create my first set of power ratings that have helped me bet the NFL more successfully over the past few years.
Don’t Reinvent the Wheel
The first thing we’re going to do is create a set of 2022 post-season power ratings.
This is an extremely important part of creating ratings because it gives you a pretty accurate starting point.
There are a lot of people who will give you general recommendations for creating your own power ratings. But the method that always made the most sense to me was to use as much existing data as possible.
Also, why reinvent the wheel?
Below we’re going to cover the most time-consuming part: Creating the starting point of your power ratings.
(In Part 2 of this series, we’ll cover the more subjective part - adjusting your ratings).
We already have point spreads from every single game in the previous season, so that’s where we’ll start.
If I was creating my power ratings from scratch, the first thing I’d do would be to find how the market rated each team from the previous season.
The simplest way to do this is to take the average of all the closing point spreads from every game.
The most time consuming part if you’re doing this first is going back and aggregating all the closing point spreads from the previous season.
(Note: to minimize the future time this requires, every week during the season I log the closing point spreads from the previous week)
Once you have all that data, it simply comes down to taking the average of all the point spreads, and you’ll get a set of ratings similar to mine here:
Now, a few very important notes on these ratings:
These are just the market ratings of each team based on closing point spreads. But if you look at the order, it pretty closely mimics how all 32 teams finished in terms of rankings last year. However, while these are a great indicator of the difference between the teams, this alone isn’t going to help you win (more on this in Part 2).
I throw out Week 18 point spreads considering the volatility of the games with so many teams resting their starters. 17 data points are plenty.
To account for what the market is giving teams for home field advantage, I usually just assign a blanket 1 point advantage to the home team and a 1 point disadvantage to the road team. It's admittedly arbitrary, but it's also likely a good average across all teams.
If you do this exercise on your own, your numbers may vary slightly depending on the data source you use for closing point spreads.
So there you have it. Your first set of power ratings. You can go through the exercise on your own, or use my 2022 numbers above as your starting point.
But like I said, this is just your starting point. These numbers reflect teams at the end of the 2022 season. A lot changes during the off-season and many teams will look much different in 2023.
So how do we account for that?
We’ll talk about that in Part 2 on Tuesday at noon (central)!
This article was originally published on Cold-Brewed Bets.
PS - Heads up! If you were planning on subscribing to BBFF's All-Access Pass this season, the early bird discount ends on 6/1! Get yours here!