Sunday, April 19, 2009

Thoughts on the Value of NFL Draft Picks

A big NFL trade got me thinking recently, why don't we see more trades in the NFL? And more specifically, why don't we see more trades of draft picks?

This past Friday the Eagles acquired Jason Peters, an offensive lineman from the Buffalo Bills, for a couple draft picks. Peters has been named to the Pro Bowl multiple times, but lots of people claim he was overrated last season. That's really not my point of emphasis here, I'm frankly excited that the Eagles were able to get someone who's supposedly very good and just wanted to get the hell out of Buffalo.

Anyway, what I've been trying to wrap my head around is why teams don't trade their draft picks more if some of them are great drafters of talent and others are so terrible.

While there's no proven methodology for evaluating draft skill, common wisdom is that certain teams (Patriots) are really good at finding and drafting good NFL players while others (Lions) are pretty terrible.

Well, if you're terrible at drafting players...why the hell are you holding onto and using draft picks that other teams should be willing to pay for in the form of current players?

If some all powerful entity came out of the clouds and gave me a brand new John Deere tractor...what would I, a farming novice, do with it?

Would I...

A) Sell it to the highest probably dressed in overalls?


B) Insist on using it myself, driving it straight down Michigan Avenue and sowing the fields of Millennium Park? (I'm not sure with what...sorghum? Do people grow that? See...I'd be a terrible farmer)

Anyway, obviously I would choose A. I have no skill at farming, and would have no use for a tractor.

Hey Detroit can't farm for sh*t!!!

Yet they and other teams like them insist on using their draft picks and taking players, a disproportionate number of which will eventually be bagging groceries.

Would it not be in their best interest to look at the draft objectively, realize they don't know how to predict who will do well at the professional level, and make trades to bring in players (probably younger ones) who have shown exactly that?

Why would you not do that? Some theories...

#1 - Two words...Tom Brady. Just like every other problem of the modern world, it can be traced directly to the the biggest jerk in the game today. When the Patriots took Brady late in the draft, they effectively turned every draft pick into a lottery ticket, with every pick a potential Hall of Famer. (Of course, Brady isn't the first home run late round pick, just the most commonly cited example) Since every GM sees the overpromoted examples of late round successes, they think that every one could be their ticket to the Lombardi Trophy (or at least the playoffs)

#2 - There is definitely the potential for the lemons problem. Any existing players that good drafting teams would be willing to give up would clearly raise concerns from the poor drafting teams. Why would a good drafting team give up a player for a draft pick if they really like him? This is why I think the poorly drafting teams would have to overpay to get players

#3 - The teams that stink at drafting don't just make mistakes in evaluating potential players, they also make mistakes evaluating their own capabilities. Maybe they make excuses for poor drafting (e.g., injuries, coaching)...but I'd wager that like stock pickers, MBA students, and every other group of people ever sampled, NFL GM's are each pretty sure that they are better than the average GM at evaluating talent.

One other thing I was thinking about. It's pretty clear that draft picks, especially as they get later in the draft, won't pay off in the short term (if at all). It's also clear that every year, there are several teams with executives that come into the season under pressure to deliver a winning season. Sports media members love to speculate on the GM's on the 'Hot Seat' that need to win or get's usually pretty obvious.

There executives should be motivated to make their teams save their jobs. As such, shouldn't these GM's be willing to trade their draft picks and/or younger undeveloped players for mature players (and therefore, potential wins)?

That last thought basically means that if I were Andy Reid or Jeff Fisher or someone with great job security, I would call the Vikings or the Saints or someone if I wanted more draft picks right now

1 comment:

MattS said...

Yeah, you nailed it. It's a mixture of a lemons problem (whereby the asymmetric information of who they should draft shuts down the market) and a principal agent problem (whereby the GMs don't build for the benefit of the organization several years down the line; they just build to keep their job). You nailed it. How come the Wharton MBAs can't do this type of analysis?