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What’s the cash value of a draft pick?

An exercise in exploring fungibility

2022 NFL Draft - Rounds 4-7 Photo by David Becker/Getty Images

In the NFL, there are two primary forms of currency used to build and maintain teams, salary cap space and draft picks. And, at first blush, the two currencies appear almost unexchangeable on a common market. For instance, how do you value draft picks in terms of dollars?

After all, it wasn’t until the early 1990s - just before the advent of the salary cap - that Jimmy Johnson and his colleagues in Dallas took a crack at developing a draft pick trade value chart, in order to create some semblance of a common currency for draft picks alone. And, even that system has been refined over the years.

Salary cap seems much more straightforward, given that it’s measured in dollars and cents, but even that can be complicated by “time value of money” calculations when looking at salary costs over a multi-year horizon.

For years now, I’ve been thinking about how to create a common draft pick/salary cap exchange, while simultaneously hoping someone more steeped in this world would undertake the exercise. I’ve come across some helpful resources, which I’ll describe and incorporate below, and then take a crack at an integrated solution.

OvertheCap

In 2019, Overthcap.com’s Jason Fitzgerald made a run at this exercise, which can be found here. He used the Jimmy Johnson trade value chart to assign the relative value of each draft pick, and looked at the salary “value” of players taken at each draft position over a 5-year period, from 2011 to 2015, the period after the introduction of the rookie wage scale.

In his exercise, one Jimmy Johnson draft point was effectively worth around $5,000 in salary cap space, in 2019 dollars.

The analysis was interesting, but static, and my goal is really to find a draft pick to salary cap conversion metric that is flexible with the inevitable, annual growth of the cap. Inspired by Jason’s work, I’ve attempted to pursue my own solution.

My Methodology

Unable to find what I was looking for on the vast internets, I decided to take a run at crafting a conversion myself. The place that I decided to start was with the Rich Hill draft trade value chart. That chart, which can be found here, was developed by Rich Hill of the SB Nation site Pats Pulpit, based on his analyses of several years of recent draft trades. It’s certainly not the only draft chart this exercise could be run with, but it’s the one I happen to like best, so I’ve settled on it here.

In the Rich Hill chart, picks are valued from 1000 points (#1 overall) all the way down to 1 point (the picks in the last third of the 7th round). Again, for the purposes of this exercise, I have assumed that these values - in the aggregate - accurately reflect the performance values of the players that tend to be taken at these positions in the draft. More on why that matters later.

As a rule, each team starts the draft with seven draft picks, awarded to them in the reverse order of their league wide finish at the end of the season. For this exercise, though, I wanted to look at the point value of the “average” draft, so I summed the value of those picks in the middle of each round, arriving at a Rich Hill point value of approximately 519 points.

The real value of draft picks to an NFL team is being able to chase the performance they would get in a veteran at a reduced price for several years, so next I wanted to pull the approximate cap value of 7 players (13%) of an overall NFL roster. In 2023, the full salary cap is approximately $225,000,000. Thirteen percent of that value is $29,700,000.

But the financial value of players on rookie deals is not that full amount, after all, even players on rookie deals get paid a decent sum of money. And fortunately for us, those sums are quite specific and assigned to each draft slot. It turns out that the rookie deal salaries for players taken at those 7 average slots sum to about $11,500,000 per year. Subtract out that $11.5M from the overall cap value of those players ($29.7M), and you arrive at $18.2M.

Again, for the purposes of this exercise, we’re going to use that $18.2M (about 8% of the cap) to represent a “draft bonus” cash addition to the salary cap. If you have the right mix of more than seven picks, or seven better than average picks, it could end up being more, but here we will continue to work with averages.

Now that we have this “draft bonus” number, $18.2M, determining the cash value of each pick is a fairly simple formula. Divide that $18.2M by 519 draft points, to arrive at around $35,000 per draft point, with a mid-first round value being around $10.7M and a mid-seventh round draft pick being about $70,000.

The formula looks something like this:

((Full salary cap * .13) - (Sum of annual rookie salaries at middle positions in all 7 rounds))/Sum of Rich Hill pick points values in the middle positions in all 7 rounds = Added value per pick point

At first blush, it’s a little hard to determine if this number is in the ballpark or reasonable, but upon reflection, I think it’s pretty close. Let’s look at the added cash value of the number one overall pick using this formula. Number one overall is 1000 draft points, an added value of around $35M per year above the $10M per so paid to that player on his rookie deal. To the extent the number one overall pick is, ideally, used on a high-end, starting caliber QB, that $45M per year slots in at #6 in current QB salaries, just about exactly where you would expect it to be.

From there, values drop fairly quickly though, with the number two pick (717 pts) having a value of $25M and the number three pick (514 pts) having a value of $18M. For those curious, Washington’s pick at #16 has an added value of $6.4M. As the draft progresses, and the risk of a playing busting - generally - increases, that risk is built into their value through the connection to the trade value chart. Sixth and seventh rounders have almost no added value, $140,000 and $70,000, respectively, because their odds are so long, but obviously, if they do hit (like Kam Curl and Darrick Forrest), that represents a windfall to their teams.

So What’s the Utility?

Other than being an interesting thought exercise, what’s the practical value of this sort of conversion? Well, in the first place, I think there’s a tremendous value in a “common currency” when teams are trying to make determinations about saving cap room, or acquiring picks in a trade.

For instance, if Daron Payne is going to cost you $22M to resign, but you could get a draft pick, like #32 overall, worth $6.4M (about 3% of cap over each of 4 years) in return for him, is that worth it? Does that give you better information than saying, “is Daron Payne worth pick #32?”

At this point, Payne is a known quantity, with relatively little risk about his likely performance - assuming he’s injury free - whereas a rookie, even one taken high in the second round, has significant risk. But, we also need to remember that that rookie risk is, to an extent, baked into the draft trade chart.

Regardless, from a performance perspective, the odds are that if we take Payne’s replacement with that pick, we will not be getting a player of his caliber. One expectation might be that the $10M equivalent or so ($6.4M in added value + ~$3.1M in actual salary) would bring us a player in the range of BJ Hill, Folorunso Fatukasi, or DJ Jones, if we were to deploy it on another interior defensive lineman. Of course, there’s no guarantee of that outcome, and the player could be anything from a future All Pro to a total bust. This is ultimately about better being able to get our arms around probabilities.

So, the odds of the Payne trade above delivering us another Payne are fairly low. What’s the upside then? The guaranteed upside is that we wouldn’t be paying Payne ~$22M per year for the next 3 or 4 years and could use that money elsewhere. Additionally, in this hypothetical, we would also likely be getting a $6.4M “cap bonus” in added rookie value for those four years as well. Is that worth the likely loss in performance? That’s a decision each front office will have to make for itself (in the coming months, I expect to run through several scenarios in independent articles).

This approach also provides a very stark picture of the utility of those first several picks. Essentially, if you’re not using them on a quarterback, should you really be using them at all?

Let’s take, for example, the selection by Jacksonville of EDGE rusher Travon Walker number one overall in the 2022 draft. As stated above, the “added value” of that pick is around $35M (with his actual salary adding $10M per year to his “full cost”), yet the top paid EDGE rusher in the game, TJ Watt, was “only” paid $28M last year. Effectively, under the best case scenario for Walker, the Jaguars left around $17M in value on the table with his selection.

By this analysis, no non-QB draft pick is even close to worth the value of the first overall pick. As it turns out, that’s true for number two overall as well. This kind of evaluation can be done at every draft position, and cross-checked with actual position salaries as well. If an above average - but not great - linebacker is getting paid $10M in the league, and the total draft pick value of a pick doesn’t drop below $10M until around pick #17, it would probably be imprudent to take a guy you think will be an above average linebacker before that point in the draft. This exercise can be played out in a variety of different ways (a full value chart is available at the end of this article).

A “common currency” also allows teams to plan better into the future as well. If it appears that in future years your actual cap space consumption is going to be pushing against the cap ceiling, it’s an exceedingly poor idea to be trading away high draft picks (ala the Rams), because that’s the one place you can reliably achieve value outside the cap.

I’m sure this will spur lots of interesting conversations - it’s by no means a finished product - and I look forward to having those in the comments below.

I’d like to thank Bill-in-Bangkok for his editorial assistance with this piece.

Poll

What do you think of this exercise to find a common draft pick/salary cap currency?

This poll is closed

  • 68%
    I think you may be onto something.
    (92 votes)
  • 8%
    I think it’s worthwhile, but you’ve missed the mark.
    (12 votes)
  • 22%
    I think it’s a flight of fancy.
    (30 votes)
134 votes total Vote Now

Rich Hill Trade Chart Draft Pick Points and Value (2023)

RD1 PTS VALUE RD2 PTS VALUE RD3 PTS VALUE RD4 PTS VALUE RD5 PTS VALUE RD6 PTS VALUE RD7 PTS VALUE
RD1 PTS VALUE RD2 PTS VALUE RD3 PTS VALUE RD4 PTS VALUE RD5 PTS VALUE RD6 PTS VALUE RD7 PTS VALUE
PK/TM PK/TM PK/TM PK/TM PK/TM PK/TM PK/TM
  1  CHI 1000 $35,000,000   32  PIT 184 $6,440,000   64  CHI 80 $2,800,000   102  CHI 34 $1,190,000   135  CHI 17 $595,000   176  MIA 6 $210,000   219  CHI 3 $105,000
  2  HOU 717 $25,095,000   33  HOU 180 $6,300,000   65  HOU 78 $2,730,000   103  HOU 34 $1,190,000   136  HOU 16 $560,000   177  NYJ 6 $210,000   220  PHI 2 $70,000
  3  ARI 514 $17,990,000   34  ARI 175 $6,125,000   66  ARI 76 $2,660,000   104  ARI 33 $1,155,000   137  BUF 16 $560,000   178  ARI 6 $210,000   221  LV 2 $70,000
  4  IND 491 $17,185,000   35  IND 170 $5,950,000   67  DEN 75 $2,625,000   105  IND 32 $1,120,000   138  IND 16 $560,000   179  TB 6 $210,000   222  IND 2 $70,000
  5  SEA 468 $16,380,000   36  LAR 166 $5,810,000   68  DEN 73 $2,555,000   106  DEN 32 $1,120,000   139  DEN 15 $525,000   180  LAR 6 $210,000   223  SF 2 $70,000
  6  DET 446 $15,610,000   37  SEA 162 $5,670,000   69  LAR 71 $2,485,000   107  NE 31 $1,085,000   140  CLE 15 $525,000   181  DET 6 $210,000   224  GB 2 $70,000
  7  LV 426 $14,910,000   38  LV 157 $5,495,000   70  LV 70 $2,450,000   108  LV 30 $1,050,000   141  LV 14 $490,000   182  NE 6 $210,000   225  ATL 2 $70,000
  8  ATL 406 $14,210,000   39  CAR 153 $5,355,000   71  NO 68 $2,380,000   109  ATL 30 $1,050,000   142  CLE 14 $490,000   183  JAX 6 $210,000   226  KC 2 $70,000
  9  CAR 387 $13,545,000   40  NO 149 $5,215,000   72  TEN 67 $2,345,000   110  CLE 29 $1,015,000   143  NYJ 14 $490,000   184  TEN 5 $175,000   227  CAR 2 $70,000
  10  PHI 369 $12,915,000   41  TEN 146 $5,110,000   73  HOU 65 $2,275,000   111  NYJ 28 $980,000   144  LV 13 $455,000   185  NE 5 $175,000   228  NO 2 $70,000
  11  TEN 358 $12,530,000   42  CLE 142 $4,970,000   74  NYJ 64 $2,240,000   112  ATL 28 $980,000   145  CAR 13 $455,000   186  HOU 5 $175,000   229  TEN 2 $70,000
  12  HOU 347 $12,145,000   43  NYJ 138 $4,830,000   75  ATL 63 $2,205,000   113  CAR 27 $945,000   146  NO 13 $455,000   187  LAR 5 $175,000   230  CLE 2 $70,000
  13  NYJ 336 $11,760,000   44  ATL 135 $4,725,000   76  NE 61 $2,135,000   114  NO 26 $910,000   147  TEN 13 $455,000   188  CLE 5 $175,000   231  NYJ 2 $70,000
  14  NE 325 $11,375,000   45  GB 131 $4,585,000   77  MIA 60 $2,100,000   115  GB 26 $910,000   148  BAL 12 $420,000   189  LAR 5 $175,000   232  LV 2 $70,000
  15  GB 315 $11,025,000   46  NE 128 $4,480,000   78  GB 59 $2,065,000   116  NE 25 $875,000   149  GB 12 $420,000   190  NE 5 $175,000   233  GB 2 $70,000
  16  WAS 305 $10,675,000   47  WAS 124 $4,340,000   79  IND 57 $1,995,000   117  WAS 25 $875,000   150  WAS 12 $420,000   191  WAS 5 $175,000   234  WAS 2 $70,000
  17  PIT 296 $10,360,000   48  DET 121 $4,235,000   80  PIT 56 $1,960,000   118  MIN 24 $840,000   151  SEA 12 $420,000   192  DET 5 $175,000   235  PIT 2 $70,000
  18  DET 287 $10,045,000   49  PIT 118 $4,130,000   81  DET 55 $1,925,000   119  PIT 24 $840,000   152  DET 12 $420,000   193  DEN 4 $140,000   236  LAR 2 $70,000
  19  TB 278 $9,730,000   50  TB 115 $4,025,000   82  TB 54 $1,890,000   120  JAX 23 $805,000   153  TB 11 $385,000   194  TB 4 $140,000   237  IND 2 $70,000
  20  SEA 269 $9,415,000   51  SEA 112 $3,920,000   83  SEA 52 $1,820,000   121  SEA 23 $805,000   154  SEA 11 $385,000   195  SEA 4 $140,000   238  HOU 2 $70,000
  21  LAC 261 $9,135,000   52  MIA 109 $3,815,000   84  MIA 51 $1,785,000   122  KC 22 $770,000   155  SF 11 $385,000   196  KC 4 $140,000   239  GB 2 $70,000
  22  BAL 253 $8,855,000   53  LAC 106 $3,710,000   85  LAC 50 $1,750,000   123  LAC 21 $735,000   156  LAC 11 $385,000   197  LAC 4 $140,000   240  MIA 2 $70,000
  23  MIN 245 $8,575,000   54  CHI 104 $3,640,000   86  BAL 49 $1,715,000   124  BAL 21 $735,000   157  CHI 10 $350,000   198  BAL 4 $140,000   241  NYG 2 $70,000
  24  JAX 237 $8,295,000   55  DET 101 $3,535,000   87  MIN 48 $1,680,000   125  CLE 20 $700,000   158  MIN 10 $350,000   199  MIN 4 $140,000   242  PIT 2 $70,000
  25  NYG 230 $8,050,000   56  JAX 98 $3,430,000   88  JAX 47 $1,645,000   126  JAX 20 $700,000   159  ATL 10 $350,000   200  JAX 4 $140,000   243  GB 1 $35,000
  26  DAL 223 $7,805,000   57  NYG 96 $3,360,000   89  NYG 46 $1,610,000   127  NYG 19 $665,000   160  NYG 10 $350,000   201  HOU 4 $140,000   244  NYG 1 $35,000
  27  BUF 216 $7,560,000   58  DAL 93 $3,255,000   90  DAL 45 $1,575,000   128  DAL 19 $665,000   161  DAL 9 $315,000   202  LV 4 $140,000   245  DAL 1 $35,000
  28  CIN 209 $7,315,000   59  BUF 91 $3,185,000   91  BUF 44 $1,540,000   129  BUF 18 $630,000   162  IND 9 $315,000   203  BUF 4 $140,000   246  ATL 1 $35,000
  29  NO 202 $7,070,000   60  CIN 88 $3,080,000   92  CIN 43 $1,505,000   130  CIN 18 $630,000   163  CIN 9 $315,000   204  CIN 4 $140,000   247  CIN 1 $35,000
  30  PHI 196 $6,860,000   61  CAR 86 $3,010,000   93  CAR 42 $1,470,000   131  CAR 18 $630,000   164  SF 9 $315,000   205  HOU 3 $105,000   248  SF 1 $35,000
  31  KC 190 $6,650,000   62  PHI 84 $2,940,000   94  PHI 41 $1,435,000   132  CHI 17 $595,000   165  NO 9 $315,000   206  JAX 3 $105,000   249  PHI 1 $35,000
       63  KC 82 $2,870,000   95  KC 40 $1,400,000   133  KC 17 $595,000   166  KC 8 $280,000   207  NYG 3 $105,000   250  KC 1 $35,000
            96  ARI 39 $1,365,000   134  NE 17 $595,000   167  ARI 8 $280,000   208  NE 3 $105,000   251  KC 1 $35,000
            97  WAS 39 $1,365,000        168  LAR 8 $280,000   209  MIN 3 $105,000   252  KC 1 $35,000
            98  CLE 38 $1,330,000        169  DAL 8 $280,000   210  LAR 3 $105,000   253  TB 1 $35,000
            99  SF 37 $1,295,000        170  GB 8 $280,000   211  DAL 3 $105,000   254  LAR 1 $35,000
            100  NYG 36 $1,260,000        171  LAR 8 $280,000   212  MIN 3 $105,000   255  NYG 1 $35,000
            101  SF 35 $1,225,000        172  SF 7 $245,000   213  ARI 3 $105,000   256  SF 1 $35,000
                      173  LV 7 $245,000   214  WAS 3 $105,000   257  KC 1 $35,000
                      174  TB 7 $245,000   215  SF 3 $105,000   258  NE 1 $35,000
                      175  DAL 7 $245,000   216  NYG 3 $105,000   259  NO 1 $35,000
                           217  GB 3 $105,000     
                           218  LV 3 $105,000