Study: Trading up in the draft is a sucker's bet

[Skyy God]

I'm crediting blind luck rather than Pioli's savvy for the success of the Baldwin/Houston trade.

Today the Philadelphia Inquirer profiles Cade Massey, a professor at Penn's Wharton School of business. Already with a study under his belt arguing that the conventional wisdom of the Draft Value Chart is all wrong, Massey was contracted by an unnamed NFL team to study the history of the draft for market inequalities. He discovered something that won't come as a surprise to football fans: the draft is kind of a crap shoot.

There is skill in making individual picks, Massey says, but the fact that draft success isn't sustainable points to the conclusion that every team is fairly evenly matched. What seem to be indicators that drafting is a talent, like the Lions' drought or the Patriots' boom of a decade or so ago, are statistically expected aberrations.

"Some teams have great years, other teams have bad years - and it matters," Massey said. "But those differences aren't persistent year-to-year, which tells me that they are chance driven. Something between 95 and 100 percent - I'm not exaggerating - of team differences in the draft is driven by chance."

If you take issue with that, you'll have to math it out with the math guy; I'm just passing things along. But Massey's field of study seems perfectly designed to tackle the NFL draft— according to his site, his expertise in psychology and economics hones in on "judgment under uncertainty, with a focus on optimism, overconfidence, and learning."

Last year, he co-authored a study with the University of Chicago's Richard Thaler. Entitled "Loser's Curse: Overconfidence vs. Market Efficiency in the NFL Draft," it aimed to determine whether there are any patterns in how front offices value draft picks, and if those patterns expose an opportunity for greater value.

The study is embedded below, but here's a talking point: teams overvalue higher picks in part because they overvalue their own judgment in evaluating players, and that "overconfidence is exacerbated by information." The more front offices know about a prospect, the more they think they know, and they also assume other teams value that prospect as highly, creating a feedback loop that pushes players higher up the draft board than they may deserve.

In terms of practical takeaways, the study says to toss out that hoary chestnut, the Draft Value Chart. You know the one: teams have consulted it for decades to put a rough value on any trade including multiple picks. (Example: the second overall pick would be exactly equal to a sixth and a 16th.)

Massey says the chart is wrong, because it doesn't take into account salaries in a salary cap league. His study looks at "surplus value," or what a player actually gives you compared to what would be expected for his contract worth. Because rookie contracts keep salaries artificially low, the surplus values of draft picks are nearly always positive. But some are more valuable than others.

That treasured first pick in the draft is, according to this analysis, actually the least valuable pick in the first round! To be clear, the player taken with the first pick does have the highest expected performance, but he also has the highest salary, and in terms of performance per dollar, is less valuable than most players taken in the second round.
Here's the chart showing the surplus value of picks from drafts between 1994-2008 (when, it must be noted, the lack of a draft slotting system severely inflated the top picks' contracts). According to the research, teams gained more value from drafting late in the first round than they did early in the first.

Massey and Thaler have advice for GMs: only suckers trade up. Over those 14 years of drafts, they calculated the outcomes of every possible 2-for-1 trade for a first rounder using the Draft Value Chart, and found "overwhelming evidence that a team would do better in the draft by trading down." The team that would have traded down would have gained an average of 5.4 man-starts per season, with roughly the same amount of Pro Bowl appearances, at a cheaper cost.

The study was naturally controversial, in part due to misreadings. It deals only in probabilities, not in individual picks. If you trade up and land a player who turns out to be a superstar, it was a good trade. The study merely says that in most cases, that possibility doesn't justify the risk.

It also has little chance of making an impact in actual front office behavior, because of the very psychological barriers it cites. In terms of "impact"—tickets sold, media coverage garnered, general excitement—a top pick is always going to be desirable. Even more important is the corollary: the fear of missing out on a superstar. That's the kind of thing that costs GMs their jobs, and leads to moves that look sexy in the short term but don't work out over time.

http://deadspin.com/study-nfl-teams-...the-1378701238

[Red Gorilla]

It's not surprising. Most teams who trade up are drafting based on need. I don't expect Dorsey to trade up much. He must have said BPA 400 times in the offseason.

[BlackHelicopters]

Interesting read.

[Tombstone RJ]

If you can trade down in the first round, especially out of the top 5 picks, it's always a good thing. That being said, the key for any team is to make the picks count. I know this article claims there's a lot of chance/luck involved but I beg to differ.

Indy had the chance to draft either Manning or Leaf. Indy chose Manning. Good choice, and not luck at all. Now, let's talk about Luck. Indy could have drafted RG3 or Andrew Luck. Indy drafted Luck.

See, it's not random chance. It's making good decisions.

[Jakemall]

I've always felt that trading down was the smartest thing to do...look at the Pats.

[Jakemall]

Originally Posted by Tombstone RJ

If you can trade down in the first round, especially out of the top 5 picks, it's always a good thing. That being said, the key for any team is to make the picks count. I know this article claims there's a lot of chance/luck involved but I beg to differ.

Indy had the chance to draft either Manning or Leaf. Indy chose Manning. Good choice, and not luck at all. Now, let's talk about Luck. Indy could have drafted RG3 or Andrew Luck. Indy drafted Luck.

See, it's not random chance. It's making good decisions.

And yet, someone did chose Leaf in the first round...

[Skyy God]

Originally Posted by Jakemall

I've always felt that trading down was the smartest thing to do...look at the Pats.

Wouldn't you want to cite an example that supports your position? Because the Pats have been shitty at drafting for a while.....

[Tombstone RJ]

Originally Posted by Jakemall

I've always felt that trading down was the smartest thing to do...look at the Pats.

trading down certainly increases a team's chance of landing productive players. But again, I've seen teams trade down and stock up on picks and it didn't amount to a hill of beans because they drafted poorly.

Remember the 1999 Rams team? That team had a boat full of picks and it was already loaded, right? I was thinking to myself "dynasty", right?

Nope. Bad drafts.

Also, look at how the NE patriots right now. They have had a friggen plethora of picks over the last 5 years and only a few of them have panned out. Aaron Hernandez anyone? Sure, Gronkowski was a nice pick but for all the picks the pats have had over the last few years you'd think that Tommy Terrific would be neck deep in talent, right? Nope. Bill Belichick has simply not drafted well. IMHO, if BB didn't have Tommy Terrific, no one would think he's a great HoF coach. He's a guy who has benefitted immensly from a HoF QB.

Don't even get me started on some horrid, horrid Broncos drafts by Mike Shanahan. He had two real good drafts in 2006 and 2008 and then nada.

[Tombstone RJ]

Originally Posted by Jakemall

And yet, someone did chose Leaf in the first round...

yah, but not the Colts and they had a choice. The question is if SD had the #1 pick would they have taken Manning or Leaf?

[Jakemall]

Originally Posted by Tombstone RJ

trading down certainly increases a team's chance of landing productive players. But again, I've seen teams trade down and stock up on picks and it didn't amount to a hill of beans because they drafted poorly.

Remember the 1999 Rams team? That team had a boat full of picks and it was already loaded, right? I was thinking to myself "dynasty", right?

Nope. Bad drafts.

Also, look at how the NE patriots right now. They have had a friggen plethora of picks over the last 5 years and only a few of them have panned out. Aaron Hernandez anyone? Sure, Gronkowski was a nice pick but for all the picks the pats have had over the last few years you'd think that Tommy Terrific would be neck deep in talent, right? Nope. Bill Belichick has simply not drafted well. IMHO, if BB didn't have Tommy Terrific, no one would think he's a great HoF coach. He's a guy who has benefitted immensly from a HoF QB.

Don't even get me started on some horrid, horrid Broncos drafts by Mike Shanahan. He had two real good drafts in 2008 and 2010 and then nada.

Oh you're right..you can have bad drafts (although I'd argue that Aaron was a great pick...can't predict that sort of thing). Which is why having more picks in general is better. If it's all a crap shoot, then spread your risk.

I'm not saying that it is always right...sometimes there might be a sure thing...but just as often there isn't. Remember when Reggie Bush was supposed to be the next Barry Sanders? He's become a solid RB...but was he worth the #1 pick in the NFL?

[Jakemall]

Originally Posted by Tombstone RJ

yah, but not the Colts and they had a choice. The question is if SD had the #1 pick would they have taken Manning or Leaf?

Or trade down and get someone else and an extra body...

[LoneWolf]

Originally Posted by Tombstone RJ

If you can trade down in the first round, especially out of the top 5 picks, it's always a good thing. That being said, the key for any team is to make the picks count. I know this article claims there's a lot of chance/luck involved but I beg to differ.

Indy had the chance to draft either Manning or Leaf. Indy chose Manning. Good choice, and not luck at all. Now, let's talk about Luck. Indy could have drafted RG3 or Andrew Luck. Indy drafted Luck.

See, it's not random chance. It's making good decisions.

Trading down out of the first five picks is always a good thing?

Yeah, I'm sure Indianapolis would have been much better off trading down and not drafting Manning or Luck. Detroit wishes they would have been able to trade down and not draft Stafford or Megatron. Jesus you are a moron.

[Tombstone RJ]

Originally Posted by LoneWolf

Trading down out of the first five picks is always a good thing?

Yeah, I'm sure Indianapolis would have been much better off trading down and not drafting Manning or Luck. Detroit wishes they would have been able to trade down and not draft Stafford or Megatron. Jesus you are a moron.

I should have said, if a team has the luxury of trading down then it's a good thing. Obviously because of Manning's injury and the fact that Luck was the #1 pick, the Colts didn't have the luxury of trading down.

[jd1020]

Originally Posted by Red Gorilla

It's not surprising. Most teams who trade up are drafting based on need. I don't expect Dorsey to trade up much. He must have said BPA 400 times in the offseason.

Shame when #1 came around...

[patteeu]

Originally Posted by Tombstone RJ

If you can trade down in the first round, especially out of the top 5 picks, it's always a good thing. That being said, the key for any team is to make the picks count. I know this article claims there's a lot of chance/luck involved but I beg to differ.

Indy had the chance to draft either Manning or Leaf. Indy chose Manning. Good choice, and not luck at all. Now, let's talk about Luck. Indy could have drafted RG3 or Andrew Luck. Indy drafted Luck.

See, it's not random chance. It's making good decisions.

What leads you to this conclusion? The success of a lucky pick looks the same as the success of a pick based on a good decision.