"Belichick was right! Economics and the NFL draft"

[Patters]

In a subscriber only article in the Boston Globe, it is reported that two economists from the Wharton School of economics have spent years analyzing the NFL draft determining if first-round picks are worth it. They concluded that 2nd round draft picks are on average 15% and up to 25% more valuable dollar for dollar. Their analysis looked at 1000s of players. I suppose intuitively In Belichick We Trust, but it's always good see his practices endorsed in a logical analysis.

Belichick was right! Economics and the NFL Draft - Ideas - The Boston Globe

...

Just days ago, Pats fans waited eagerly on draft night only to watch, deflated, as head coach Bill Belichick traded away the team’s first-round draft pick in exchange for a raft of lesser picks from later rounds. ... Instead, just like they’ve done in past years, the Pats traded down, leaving many fans grousing on talk radio.

...

Belichick’s strategy, however, has a strong endorsement from at least one surprising place: the world of high-level economics. A research paper published in March by two university economists suggests he may be taking exactly the right approach.

...

"Massey and Thaler began by assigning a performance value to players drafted between 1991 and 2001 who remained in the league six to eight years later.... As the paper puts it: “In paying a steep price to trade up, teams are paying a lot to acquire a pick that is worth less than the ones they are giving up.”

 

[RobAllan]

Alright, I'm going to play the devil's advocate here for a moment:

1. I don't think the issue most fans have is trading out of the first round.
2. I do think it's draft reaches, and I suspect the economics works better if the talent you take in the 2nd round is, in fact, 2nd round talent.

Not saying this is my position, but I'd have a hard time arguing it too.

 

[upstater1]

Alright, I'm going to play the devil's advocate here for a moment:

1. I don't think the issue most fans have is trading out of the first round.
2. I do think it's draft reaches, and I suspect the economics works better if the talent you take in the 2nd round is, in fact, 2nd round talent.

Not saying this is my position, but I'd have a hard time arguing it too.

The only reaches we can think of are Tavon Wilson and Sebastian Vollmer, and obviously, the jury is out. The 2nd round busts were actually first round types. Darius Butler for instance, had a mid first round grade, was considered as a first by several teams but dropped.

 

[RobAllan]

The only reaches we can think of are Tavon Wilson and Sebastian Vollmer, and obviously, the jury is out. The 2nd round busts were actually first round types. Darius Butler for instance, had a mid first round grade, was considered as a first by several teams but dropped.

Sure.

My point is, however, that when a draft stirs up people invariably come in with articles like this and say "A-ha! Bellichick was right!" He may be right, he may not be, but I'm not sure the article really has anything to do with what was getting the goats of most of the naysayers. I'm also a firm believer that it's okay for BB to be wrong time-to-time as I highly suspect he's human.

I think it's a good article. I think BB has increased his chances of value in the 2nd round multiple times in his drafts. I'm not sure that addresses the concerns many fans have, however, so I question the efficacy of pointing to such content to achieve that end.

 

[Jercules]

So the study covers '91 to '01--long before the latest CBA fixed the insanity of the rookie wage scale, but... perhaps also before the wage scale really became a problem?

 

[Patters]

Alright, I'm going to play the devil's advocate here for a moment:

1. I don't think the issue most fans have is trading out of the first round.
2. I do think it's draft reaches, and I suspect the economics works better if the talent you take in the 2nd round is, in fact, 2nd round talent.

Not saying this is my position, but I'd have a hard time arguing it too.

I suppose we'd have to look at our averages compared with other teams. It's awfully hard to say if the Pats are worse or better than other teams in terms of who they pick. One thing is clear though, we do get a lot of picks most years, so that increases the odds of us picking not only good players but mediocre ones as well. Also, BB's idea of talent I think not only factors in position skills, but who that player might be up against in our division, whether that player may have trade value down the road, and whether they are general purpose players who can serve in many different roles. I suspect our overall draft success is pretty good on average in BB era; I'm sure sure if any team really stands out from the rest in terms of the ability to consistently draft quality players.

 

[patriot lifer]

So the study covers '91 to '01--long before the latest CBA fixed the insanity of the rookie wage scale, but... perhaps also before the wage scale really became a problem?

that's a good point. I guess one thought that is unclear is what we mean by the "economics" of the draft. Is it regarding dollar value versus talent received? Or is it purely a matter of draft picks versus talent received?

For example, for a couple years BB would keep trading first round picks into the next year, essentially deferring a first round selection while picking up an additional second round pick every year. The conclusion of the paper may be that teams should be taking these deals as they are presented (money being irrelevant in this circumstance). And that trading up is seldom economic. A team may be confident that a player is going to be really good and is a perfect fit for the team, but teams miss on players and they aren't always as good as previously thought. Trading up reduces the total draft selections, which puts all ones eggs in one basket.

But I'm not sure if money is incorporated in this paper.

 

[Brady2Moss]

Let me know when their study on the economics of using Rutgers as a feeder program to your team is

 

[Grover]

Thaler's not a Wharton guy. He's at the University of Chicago. (An important point to some of us). Phew! Glad that's cleared up

 

[nabwong]

Yes and No. You do not trade out if you could take Peyton Manning and Andrew Luck. I will say that the only position worthy of the overall #1 pick is a franchise QB. Otherwise, bring on the sale.

 

[JMC00]

The only reaches we can think of are Tavon Wilson and Sebastian Vollmer, and obviously, the jury is out.

Well in the instance of Vollmer the jury is not and Tavon Wilson he was the 3rd safety taken and was the 3rd best rookie safety last year.

 

[Patsfanin Philly]

Thaler's not a Wharton guy. He's at the University of Chicago. (An important point to some of us). Phew! Glad that's cleared up

It's not like the U. of Chicago has the most Nobel lauriates in Economics or anything.

 

[patsfan13]

I have posted about this a few years ago.

Thread posts no longer available too bad:

http://www.patsfans.com/new-england...344-wharton-leadership-journal-belichick.html


And this thread:

http://www.patsfans.com/new-england-patriots/messageboard/10/899240-freakonomics-nfl.html

So some of us get frustrated when BB trades down and gets an extra pick here and there instead of getting out binkey. Then we look at the roster and see that not all of those stockpiled picks make the team, and that makes us crazy and think perhaps BB is crazy.

Caught this video on the NFL network on the value of draft picks is the 3rd DE statistically a lot better than the 4th or 5th... seems it may not matter. IOW there is a lot of luck involved.


Food for thought as we approach another draft and see BB trade down:

NFL Videos: Football Freakonomics: Draft Luck


and the paper they refer to in this piece:

The Loser's Curse: Overconfidence vs. Market Efficiency in the National Football League Draft | Berkeley.edu PDF

Quote:
In this paper we offer some evidence on both of these important concepts in an unusual but
interesting context: the National Football League, specifically its annual draft of young players. Every year the National Football League (NFL) holds a draft in which teams take turns selecting players. A team that uses an early draft pick to select a player is implicitly forecasting that this player will do well. Of special interest to an economic analysis is that teams often trade picks. For example, a team might give up the 4th pick and get the 10th pick and the 21st pick in return. In aggregate, such trades reveal the market value of draft picks. We can compare these market values to the surplus value (to the team) of the players chosen with the draft picks. We define surplus value as the player’s performance value – estimated from the labor market for NFL veterans – less his compensation. In the example just mentioned, if the market for draft picks is rational then the surplus value of the player taken with the 4th pick should equal (on average) the combined surplus value of the players taken with picks 10 and 21.

Yale School of Management


Call me crazy but I'm guessing BB and E Adams are sorta familiar with this stuff, maybe even talked to the authors...

Study disputes value of top picks - Houston Chronicle


This sort of understanding of value is one of the things that differentiate BB and the Patriots. Like the draft value chart this info will need to be updated in the context of the current CBA. My guess is that our FO is still ahead of the curve here.

BB is in a position of great leverage compared to many other teams due to his job security relative to most franchises, where the GM or coach is a bad season or two away from losing their job.

 

[Observer]

What does the study say about third round picks compared to second round picks?

 

[mgteich]

As you say, the conclusions are worthless because of the institution of the rookie wage scale which addressed the issue the paper suggests. Now, I suspect that first rounders are more valuable, especially of you include their entire first contract, including the fifth year.

That being said, what is not clear is the value of the bottom quarter of the 1st round compared to the second. This is Belichick territory.

So the study covers '91 to '01--long before the latest CBA fixed the insanity of the rookie wage scale, but... perhaps also before the wage scale really became a problem?

 

[NSPF]

Would just like to add that another recent study, this time looking at the most recent 13 years, came to pretty much the same conclusion.

2013 NFL draft: Study shows more value in 2nd-round picks than 1st-rounders - ESPN

 

[mgteich]

I'm impressed. The writer predicted the 2nd round would include Geno Smith. Lacey and Teo. He also had Barkely and Nassib in the 2nd instead of the 4th.

Would just like to add that another recent study, this time looking at the most recent 13 years, came to pretty much the same conclusion.

2013 NFL draft: Study shows more value in 2nd-round picks than 1st-rounders - ESPN

 

[patfanken]

Just a thought. I think that some of the discrepancy comes from the concept that all first rounders are equal. I think BB believes that because the Pats are constantly going to be picking late in every round, you have to look at the draft more like thermoclines. As you descend in the draft there are definite breaks in the level of talent within draft. But the key is that these breaks don't come neatly at the end of each round.

For example the top grade of player might only be 4-8 players in length, The next grade might be 15-20. The next 20-30, etc. I don't think BB goes into a draft knowing he's trading down. I think he knows who he'd like to draft, but when you are drafting so low, you have to recognize that when the players you rate at late first round values are gone, it is always better to trade down into the next "thermocline" and hopefully get multiple players where you only would have gotten one without the trade.

The reality of this draft wasn't that it sucked all the way through, it just sucked at the top. There were a distinct lack of depth in players who would be immediate impact players. Last year was a great year for those kinds of players, and we were able to get one at 21. This year after you got out of the top 6 every player take was a good player, but none were without question marks.

I think we got a real "first round" talent with our pick at 53, but there are legitimate questions that won't be answered until we see him on the field. None of our picks this year are ones that we can feel the same way we felt about picking up Jones and Hightower. But that can probably be said for 40 of the picks that were made before ours

On the other hand, I've never felt better about our 7th round picks, where I think the draft was still deep enough that we got 2 guys who are good enough to make the roster of one of the best teams in the league.

So, getting back on point, I think that whether trading down or up is more a function of the number of high level talents that each draft brings to the table....especially when you are picking at the end of each round. In a top heavy year like 2012 you trade up to get a guy who might have slipped into your range. In a thin year like 2013 it might not be a good idea.

On of the more interesting and telling things to come out of the 2013 draft was that in BB's mind he wasn't "reaching" for Duran Harmon. He not only targeted him, he believed others had as well. If that wasn't the case, BB would have taken the trade, that we now know was available at 91.

 

[supafly]

Let me know when their study on the economics of using Rutgers as a feeder program to your team is

As much as we continue to joke about this, one of the most important aspects of draft selection is the transitional period made from college to the NFL; not only in terms of adapting to the scheme etc, but also in adapting to the lifestyle, additional work, seriousness, and attention to detail.

By choosing players from a school like Alabama, Florida, or now...Rutgers--Belichick already KNOWS that he's increasing the likelihood of succeeding in this specific program due to the comparitive nature of the college program that he's choosing these players from.

In other words, guys like Schiano, Meyer, and Saban all run programs that mirror many of the aspects that this one does in terms of discipline, image, success, and work habits-- so by choosing these players he obviously believes that he is raising his chances of these players succeeding here in NE.

For example, he doesn't believe that the program of Clemson is all that hot...unless it's sheer coincidence that Belichick has never drafted a player from that program since he's been here.

 

[Finnishfan]

In a subscriber only article in the Boston Globe, it is reported that two economists from the Wharton School of economics have spent years analyzing the NFL draft determining if first-round picks are worth it. They concluded that 2nd round draft picks are on average 15% and up to 25% more valuable dollar for dollar. Their analysis looked at 1000s of players. I suppose intuitively In Belichick We Trust, but it's always good see his practices endorsed in a logical analysis.

Belichick was right! Economics and the NFL Draft - Ideas - The Boston Globe

...

Just days ago, Pats fans waited eagerly on draft night only to watch, deflated, as head coach Bill Belichick traded away the team’s first-round draft pick in exchange for a raft of lesser picks from later rounds. ... Instead, just like they’ve done in past years, the Pats traded down, leaving many fans grousing on talk radio.

...

Belichick’s strategy, however, has a strong endorsement from at least one surprising place: the world of high-level economics. A research paper published in March by two university economists suggests he may be taking exactly the right approach.

...

"Massey and Thaler began by assigning a performance value to players drafted between 1991 and 2001 who remained in the league six to eight years later.... As the paper puts it: “In paying a steep price to trade up, teams are paying a lot to acquire a pick that is worth less than the ones they are giving up.”

Not wanting to discredit the study or anything, but I wonder if they have valued the positions the same way NFL does?

QB is the most highly valued position in the drafts, followed by OT and DE. But those three are ALWAYS valued higher than other positions. In fact, the last time the 1st overall pick was anything other than one of those three was in 1996.

The thing about position value in draft is that it makes it impossible to compare values except if you make the comparison individually within each skill position.

For instance, there are usually 3-4 OTs and 5-6 WRs in the roster of 53. I would say that the "draft value" for OT is 2x the "draft value" of WR, despite the careers are often longer for OTs and need for players to fill the roster is greater for WRs.

In this 2013 draft 5 OTs (3 in top 4) and 3 WRs were taken in the 1st round. All 5 OTs came off the board before the 2nd WR. If we would make 1 team out of this 1 draft class, that would mean that the practice squad OT positions would be picked before the 2nd starting WR.