Draft Economics

GregHarris

beware my sexy helmet/overall ensemble
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Jun 5, 2008
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Vox put up a great article on the economics of drafting.
 
How NFL teams ignore basic economics and draft players irrationally.
 
Was really stuck out at me was section 3, which suggests the real value of the draft (and not just talking head hyperbole) is early in the second round which maximizes performance with respect to salary.  Sounds familiar.
 
 
 
[value] peaks around pick 33, the start of the second round — making it the sweet spot in the draft. If you had to make one pick, this is where you'd get the most bang for your buck, because there's a pretty good chance of getting a productive player and he won't command a particularly high salary. But since you can get multiple picks by trading a single high one, maximizing value means moving down into round two (picks 33 through 64). 
 

Super Nomario

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... of course, Belichick figured this out years ago. Re-posted from another thread:
 
NickEsasky said:
I realize this wasn't directed at me, but if the 2nd round is such a crapshoot, doesn't it stand to reason that Bill's strategy of trading out of it into the second round increases the risk that whoever he drafts will not pan out? Granted he's getting more assets when he does trade back, but the further back he goes the more likely the pick is not going to succeed. 
This is true - trading back absolutely increases the chances you will draft a bust. But the goal of the draft isn't to avoid busts, it's to maximize hits. If we take the Patriots' draft-day trade with the Vikings this year as an example, they gave up a 1st for a 2nd, 3rd, 4th, and 7th. If we figure odds as something like (these are rough, but reasonably close to historical norms) - 80% success for the 1st-rounder, 50% for the 2nd, 35% for the 3rd, 15% for the 4th, 5% for the 7th - you will have a mathematical expectation of 0.8 of a useful player with the Vikings' end of that trade, and 1.05 of a useful player with the Pats' end of the deal. You come out ahead on the Pats' end from an expected value standpoint, but it's also clear that your chances of whiffing on that top pick are considerably higher. In the long run, a team that trades back will come out ahead, but in any given year the strategy can backfire.
 
The Patriots (and the other smart teams) realize that the draft is an exercise in probabilities, not certainties.
 

GregHarris

beware my sexy helmet/overall ensemble
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Jun 5, 2008
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Apologies as this was meant for the draft subforum.  
 
Edit:  Thanks!
 

Eddie Jurak

Go Leafs Go
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Dec 12, 2002
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Are the economics of low first round picks a little better due to the new CBA? Teams have an extra year of cost control for players taken late in the first compared to those taken after the first round.

Of course it only matters if the team hits on the pick...