Sunday, April 25, 2010

Could Any NFL Player Be Had in Exchange for Draft Picks?

CC image from ian_ransley on Flickr.

In the NFL, teams can trade players, cash, and draft picks. The value of future draft picks depends on many things (more on this later), but these picks unambiguously have positive value.

Because of this, is no NFL player untouchable, as his value can be exchanged for draft picks? For instance, say that we could compute a value of 100 points (on some scale) for Peyton Manning. In theory, a team could send 100 points worth of draft picks (maybe that's two picks next year, or maybe that's three years' worth of picks) to the Colts in exchange for Manning, and both sides would be happy.

The value of a draft pick many years down the road has a wide variance. The trading team's record the year before (which determines its draft position), the receiving team's needs, and the overall strength of the draft class are all unknown. Additionally, draft picks in the far future are worth less than draft picks today, because of greater uncertainties and the pressure to succeed today. But presumably teams could discount the value of future picks accordingly and be able to trade gobs of picks for today's star players.

Perhaps star players usually stay put because of the endowment effect. In other words, people put higher value on things they already have. A good example is something like tickets to a big game. If you already have the tickets, it might take $200 for you to part with them, but if you don't have tickets, you might only be willing to pay $100 to purchase them. Your valuation of the tickets is inconsistent, as it depends on whether you already have them. In this case, perhaps the Colts value Manning at 200 points while the rest of the league only values him at 100 points.

Additionally, general managers have an incentive to win now. Maybe it would be smart to trade Manning for three years' worth of picks, but the Colts would immediately suffer in the short term, and the GM might be fired long before the team sees the value of these future picks come to fruition.


Robert LaHue said...

I would say yes, in theory, any player could be had for enough draft picks. But, for the reasons you point out, particularly endowment effect, it's highly unlikely teams will trade away star players for draft picks unless they're already being shopped around (i.e. Jason Campbell).

Another aspect I think that tends to keep teams just trading picks back and forth during the draft is that teams have developed a point-value system for all the given picks in a draft.

An example chart:

So, let's say a team is using this exact chart and has the #10 pick (1,300 points) in the first round, and the team with the #17 pick (950 points) calls up and wants to trade. Provided Team A feels the mid-first round picks are lackluster, Team B could offer #17, their second round pick and either a 4th or 5th rounder, roughly equal the point values, and pretty much guarantee the deal.

So that's why you're seeing the one team every year that trades down two or three times in the first time, each time chopping down two or three picks. They're primarily doing it to accumulate the mid-and-late-round picks.

Greg Finley said...

I'd never seen anything like that draft-value chart. That's a good way to roughly quantify the problem. Thanks for sharing that.

Also, did you just use "star player" and "Jason Campbell" in the same sentence? :)

Robert LaHue said...

Yeah, didn't realize that mistake until it was too late.

I still thought Campbell could have had a shot at being a decent quarterback. Until he went to the Raiders. Now he's just screwed.