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Go to any football website, and most likely you'll find something about the triangle passing concept. Chris Brown (Smart Football) describes the concept very well (though, when he gets into specifics, he discusses a different play that utilizes the triangle scheme).
The insight behind the triangle is that the horizontal and the vertical stretch are combined to create a single straightforward read for the quarterback that provides answers no matter what the defense presents.A true flood isn't realistic this close to the end zone, simply because there isn't enough room to operate. Meanwhile, a triangle concept is versatile against any coverage, fits within the limited space, and provides the QB a relatively simple read. Combine it with the fact that it only needs 3 yards, and you see why it is the favorite scheme of most pro-style (and most pass-based-spread) teams in modern football in those situations.
All of the major "new" (in relative terms) passing concepts are based on a triangle read. The weakness of the triangle stretch is that it's typically only possible to only get a two-man horizontal or vertical stretch, whereas with a true "flood" you can place three (or more) receivers across the field on a given plane to truly defeat a defense. This limitation means that a triangle can be throttled by certain coverages that rotate to the triangle side.
But all this is counterbalanced by the triangle's versatility: the route concept should result in a completion against almost any coverage, and, as will be shown further below, triangle stretches are also usually conducive to having a man-beating concept within them.
Michigan's Play Call
The second route, by the Z-receiver (Gallon), is a corner/flat (run to open grass to the outside). This is a horizontal stretch. This is the first zone-coverage-beater. This can also be a man-coverage-beater if his coverage is coming from the inside because the X-receiver provides a rub.
The W-receiver (Dileo) thus is the 2nd read for both man-coverage and zone-coverage. He is also the hot read. He is provided with a rub from both the X and Z receivers. He is running an option route. With no inside help, his route becomes an angle route. An angle is generally a man-coverage beat verse outside leverage. By stemming outside initially, it gets the defender flat footed and moving outside, opening up room on the inside. In concept, coming from a stack set, this would work like a double slant against a standard man coverage. Now, if there is inside help, the W-receiver is essentially running a snag route. What this means is that he will run to the void in the defense (the outside release is merely to hide behind the receiver in front, providing a better rub) and hitch, and work inside-out. The QB will throw him open. This means that with inside help but outside coverage, the QB will throw to his numbers. If the outside, flat defender follows the Z-receiver, the QB will throw to the back shoulder into the vacated zone, or in other terms, throw the receiver open. The W-receiver is the 2nd read (outside of a hot situation), but the most likely target.
So in theory, with this combination of routes, you have 2-zone beaters (plus check to the Z-receiver) and 2-man beaters, with the option of working inside or outside with the third receiver. The concept should work against any coverage.
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To read more about this concept, follow the link to Maize n Brew