Another really interesting piece (essentially for a team wanting greater overall value the next 3 years) - on average, it is of more benefit to trade a future higher round pick for one this year. http://www.footballperspective.com/the-time-value-of-draft-picks/ Yr #65 #48 Diff 1 0.8 0.0 +0.8 2 1.6 1.1 +0.5 3 1.8 2.1 -0.3 4 1.7 2.3 -0.6 5 1.3 2.1 -0.8
Personally, I would be the GM that always trades for future draft picks. The article is interesting, but I'd much rather pick at 48 the following year compared to 65 this year.
Article hits close to home for me because I've made this argument several times. What this guy has done differently is construct rates of ascent and decline via Pro Football Reference's "AV" stat, in order to get his arms around the point at which accepting the future higher pick will have had higher value. But there are several things dismissed or just glossed over. For example he wants to have a terminal ending to the comparison of 48 and 65 at Year 5...of the EARLY pick. This is a fallacy. If the early pick gets to Year 5 in order to accumulate AV then the later pick should receive that as well. In his example the AV total for pick 48 should be 9.3 and the one for pick 65 should be 7.2. He kind of dismisses that as somewhere off deep into the future. The values won't cross until Year 5 post trade so who cares. This is not a good way to do business though. You should not be looking to bleed value like this because the cost won't come until a few years down the road and "who cares". Really he's not exploring the time value of draft picks at all. He's exploring the average success of different draft picks at different spots according to one website's method of assigning a single number to a player's value. The article itself should have been more aimed at relating pick values to one another rather than an exploration of time value, which was not really addressed. His data presents a challenge to the widely-used draft trade value chart. And I think it's a valuable challenge because it actually reflects something I've felt for a while now which is that low round picks are held more valuably than the chart would have us believe. The chart would have us believe that two mid 7ths are only about as valuable as one late 6th. I don't see that. This guy's findings suggest that two mid 7th round picks would actually be about as valuable as a late 4th round pick. Additionally, the chart would have us believe that you only have to go from #1 overall to #7 overall to reach a pick that is half as valuable. In other words if you want me to move downward from #1 overall to #7 overall, you've got to give me an additional #7 overall to make it equal value. This guy's findings suggest it's more like from #1 overall to #30 overall. This is MUCH more in line with how I would think of it. That to me is the value of this piece. This piece unfortunately does very little to address actual time value of a draft pick.
