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Saturday, April 27, 2013

NFL Draft 2013

The NFL draft has come and (almost) gone, and if you gauged the quality of players by the media attention paid to each round, you'd come away with the sense that first round picks were the most important (the first round had a night all to itself), followed by the second and third, and then the rest. This, of course, makes sense since the draft's logic is that the best players, for the most part, are selected earlier.

However, research conducted by students from Worcester Polytechnic Institute ("Better Value in 2nd-Round Picks") found that there's more value in second-round draft picks than in first-rounders. Analyzing the performance of players selected from 2000 to 2012 found that players selected in the second round had 70 percent of the production of first-round picks at 40 percent of the salary. Their study used two metrics to measure a player's success. The first was Approximate Value, which assigns value to a player's performance during a season. The other was "Appearance Value," which combines games played, games started, and "recognition" (e.g., Pro Bowl selection or other honors). If I am interpreting their findings correctly, what this means is that if you select two players in the second round, you will get 40% more output for fewer dollars than from your first round pick. The moral of the story? Teams should trade their first round picks for multiple picks in the second and (probably) later rounds (Don't forget: Joe Montana was picked in the third round, and Tom Brady was picked in the 6th.)

Their findings are similar to those of others. For example, the economists Case Massey and Richard Thaler found that the "surplus" draft value peaked with picks in the late first round and early second round (they defined surplus value was defined as the expected performance value above which a team could expect by spending an equivalent amount on a veteran free agent). The folks at Freakonomics summarize the Massey and Thaler study quite nicely in the short video, "The Luck of the Draft," which was produced last year (when Andrew Luck was one of the big names). Essentially, what it comes down to is that flipping a coin is sometimes just as reliable as listening to the experts, which is why a team's more likely to choose a winner with multiple picks in the later rounds than a high to medium pick in the first round.

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