Monday, May 5, 2014

Beating the Chart: Where to get the best value in the NFL Draft

The NFL Draft has been a focus of mine for the past couple of years. I did some analysis to get at the real value of each pick in the draft and create an updated version of the draft value chart used by NFL teams.

Along with this chart there were some basic guidelines for doing well against users of the old-school chart popularized by Jimmy Johnson: trade down. The older chart valued top picks – especially the top two or three – much higher than the rest of the draft. The disparity continues throughout the draft as each round is worth less relative to the previous one than my analysis would suggest, even after subtracting out the replacement value (an undrafted free agent).  

The older chart drops off by more than 50% each round relative to the previous one. The Sports + Numbers version still has a steep drop off from the first to the second round – roughly 50% – but subsequent gaps are 40% and then 30% for later rounds.
It’s important to note that this does not suggest that teams should expect immediate starters from later rounds.

This figure shows the percentage of players drafted in each round who start in their first, second and third season. Although UFAs are shown on the graph for reference, the denominator for them is players on the roster and excludes players signed for a tryout and subsequently cut.

The drop-off from round to round for the first seasons is about 50% from 1 to 2 and 2 to 3, then 30% for the remainder. By the third season the drop-off is between 20% and 40% for all rounds. This data, along with adjustments for performance and more valuable positions, underlies the revised draft value chart that I produced.

Now that we’ve reviewed a bit about the relative value of picks within each chart, we can get to the big finish.  

The solid line on here tracks how much more value each pick is on the Sports + Numbers chart as opposed to the Jimmy Johnson chart, with the units being % of #1 overall pick. The surplus value peaks in round 1 with the 21st pick being worth 15.3% more on the Sports + Numbers chart (41.9% of the #1 pick vs. 26.7% on the Jimmy Johnson chart).

The dotted line shows the relative value of each pick (e.g., the first pick of round 2 is worth 69.7% more on the Sports + Numbers chart than it is on the Jimmy Johnson chart). The Jimmy Johnson chart bottoms out much faster than the data supports, so each pick gets more and more valuable on the Sports + Numbers chart relative to the older valuation right up until the end, when the two converge at a miniscule number for the last pick in the draft.

As a GM looking at this data there are two imperatives. First, as mentioned above, is still to trade down. The dotted line on the last graph shows the justification as each subsequent pick up is more and more undervalued by anyone using the Jimmy Johnson chart until the last few of the 7th round. Second is to target trades where you can get the most surplus in what your trading partner thinks is a fair deal. Sweeping up sixth rounders is all well and good, but it takes a lot of them to accumulate the kind of surplus value found in a single late first rounder.

If you hold a top ten pick and can get a playoff team to swap a late first rounder plus a second and a third you will be doing very well for yourself and your team. The 9th overall (45%) is worth the 21st, 53rd and 85th according to the Jimmy Johnson chart. According to the Sports + Numbers chart, however, you will have sent out 58% in that hypothetical while taking back 81%, a surplus worth a mid-second round pick on its own.


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