The NFL Draft consists of seven rounds, in which each Club is initially allotted one pick. Clubs can be awarded additional compensatory selections based on the results of free agency, according to a formula agreed to by the NFL and NFLPA. The NFL Draft is a Club’s principal opportunity to a premium product at wholesale prices. Poor drafts, however, can also doom a GM and Club. Many argue that the NFL Draft is the most important building block for a GM. Former NFL General Manager Bobby Beathard, whose teams went to seven Super Bowls, said of the Draft “I think it is the foundation of the entire league, it’s the most important part of putting your team together. You build everything around the draft. You mold your team around the draft. For me, free agency, what you are getting sometimes, is too risky.”
Following the Green Bay Packers’ 2011 Super Bowl victory, General Manager Ted Thompson was lauded for his roster management, especially his work in the Draft. From 2006 to 2011, Thompson made 57 Draft selections, 28 of which were still on the roster for the Club’s Super Bowl victory, including 13 starters. However, it is not always about the GM when it comes to successful draft selections. Former Giants GM Ernie Accorsi talked about his decision to defer to Reese and coach Tom Coughlin’s preference for defensive end Matthias Kiwanuka during the 2006 Draft, saying: “I decided to let them have their way. A GM shouldn’t always be heavy-handed. The front office is a team, too. This was good for the team. And, obviously, it wasn’t a franchise-changing decision. If it had been a franchise-changing decision, I’d have ignored everybody and insisted on having my own way.”
Clubs take different approaches to handling their allotted draft picks. The Patriots, five-time AFC Champions between 2001 and 2011, led the NFL with a total of 51 total draft picks between 2006 and 2010. In contrast, the Patriots’ rival, the Jets, had the least number of draft picks with only 27 in that period. Rather than bring in a large number of rookies, the Jets have instead focused on trading their draft picks to allow them to move up in the Draft where they can draft better players. For example, in 2007, the Jets traded picks in the first round (25th overall), second round (59th) and fifth round (164th) to the Panthers for the Panthers’ 14th overall slot and a sixth round pick. The Jets used the 14th overall pick to draft Darrelle Revis, now a perennial Pro Bowler at cornerback. Then, in 2009, the Jets traded three players, their first round pick (17th overall) and second round pick (52nd) for the Cleveland Browns’ fifth overall pick, which the Jets used to draft quarterback Mark Sanchez.
The Jets’ strategy of course presupposes that they are able to find a trade partner on or before draft day. Over the years, these partners have not been hard to find. In the 2010 offseason and Draft, there were 86 trades involving 109 draft picks. 44 of these trades involved a total of 55 players, while the remaining 42 trades were draft picks only. Trades of top ten draft positions, however, remained rare until the 2011 CBA. Between 2008 and 2011, there were a total of five trades involving top ten draft positions. The limited mobility at the top of the draft was due to two main factors: (1) the compensation of top ten selections; and (2) the perceived “value” of a top ten pick.
Rookie compensation had increased so dramatically that Clubs actually preferred to draft later in the first round rather than be forced to guarantee tens of millions of dollars to unproven rookies. The 2011 CBA resolved this issue by reigning in rookie compensation, as discussed above. Not surprisingly then, there were six trades involving top ten draft selections in the 2012 Draft.
The perceived value of a top ten overall pick stems from the Cowboys’ creation and use of the “Trade Value Chart.” In the 1991 NFL Draft, coming off a 7-9 season, the Cowboys had ten picks in the first four rounds. Consequently, it seemed likely that the Cowboys would be active in the trade market during the Draft. However, Cowboys coach Jimmy Johnson lamented that he had no way of knowing how much certain picks were worth, e.g., is a third round draft pick more valuable than fifth and seventh round picks?
Mike McCoy, a Cowboys executive and minority owner, set out to create a solution. McCoy examined all NFL Draft day trades in the previous four years to determine how Clubs had valued certain positions in the Draft. McCoy did not seek to determine whether the Clubs’ perceived valuations were accurate but was merely reflecting how Clubs had acted in the past. McCoy’s end product was the Trade Value Chart which assigned numerical values to each pick in the Draft. For example, the first overall pick is worth 3,000 points, the second overall pick is 2,600 points, the first pick of the second round is 580 points and so on, until the last pick is worth 0.4 points.
The Cowboys used the Trade Value Chart during the 1991 Draft to draft a total of 17 players. The Cowboys improved to 11-5 in 1991 and won the Super Bowl in 1992. McCoy’s Trade Value Chart became legendary. Cowboys’ assistants took promotions with other Clubs and made sure to take the Trade Value Chart with them, cementing its use around the NFL.
Despite its widespread use, the Trade Value Chart has proven to be inaccurate and unreliable. Cade Massey of Duke University and Richard Thaler of the University of Chicago compared the value Clubs placed on certain Draft positions – based on what the Club gave up to get to that position – with the actual performance of the players drafted at that position. The research indicated that Clubs erroneously discount future picks and overvalue early picks. The Trade Value Chart claims that the top overall pick is 3,000 points and the first pick of the second round is only worth 580 – meaning you would need at least five picks at the top of the second round to be able to trade for the first overall pick. This is clearly wrong. The first overall pick is, on average, not even twice as good as the first pick of the second round. These types of errors permeated the Trade Value Chart, indicating that GMs must ensure that their Draft day decisions are based in reliable analysis.
Understanding the mechanisms and strategies that power the economic engine behind the draft can be an asset in the successful completion of a draft. However, nothing supersedes a General Manager’s ability to work with their coaching and scouting staff to evaluate these prospects properly and to generate proper values for each player based on the return on investment that can be expected within the context of their individual program and scheme. A scout must understand that there is a difference between evaluating a prospects traits, characteristics, and abilities, and the process of valuing how much those traits are worth. Make sure you take the time to understand the whole context surrounding the draft so that you can be best positioned to maximize your skills and knowledge.
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