Unlike baseball, the NFL has a salary cap on player spending that limits what even the richest owners are able to do to improve their team. NFL GMs can manipulate the cap with various accounting gimmicks such as prorated signing bonuses to spend more than the cap amount in any given year, but there are always consequences down the line. It’s worth it if you get a Super Bowl out of it, but if you misjudged the talent you spent the big bucks on, you’ve got a problem.
Ideally you’d like your team to be good at identifying value so that they get the biggest bang for their buck. First and foremost, that means skill in evaluating individual players. When you can take any quarterback in the draft and you choose Mitchell Trubisky over Patrick Mahomes, you lose, not only on the scoreboard, but financially. Trubisky, the No. 2 pick in 2017, cost the Chicago Bears $29.0M over four years, while No. 10 pick Mahomes cost the Kansas City Chiefs only $16.4M, according to Spotrac.
The loser’s curse
That’s the problem with high draft picks. The stakes are high both financially and for team success.
In 2013, Cade Massey and Richard Thaler of the University of Pennsylvania calculated the “surplus value” of draft picks at different draft positions. They started with the NFL rookie compensation scale as a function of draft position, and then compared it to the salaries of veterans signed to second contracts (“performance value”) at the same draft position. The difference between the two is the surplus value of the pick, i.e., how much more or less expensive the rookie contract amount is than the salaries NFL teams choose to pay for players chosen with that pick after their rookie contracts are up.
Their result was that the highest picks in the draft are greatly overvalued relative to those late in the first round and early in the second round. Since the worst teams in general are the ones with the highest draft picks, they dubbed this phenomenon “the loser’s curse.” The Carolina Panthers, now with the No. 1 pick, will pay $7.4M this year and $40.6M over four years to whichever player they choose. The New York Giants, at No. 25, will only pay $2.6M this year and $14.1M over four years for the player they select, per Over The Cap.
Giants fans, having gotten used to having high draft picks for the past five years, are somewhat unsettled this year having to wait so long for their team to pick and anticipating watching so many of their favorite players drop off the board. But the loser’s curse concept says that it’s not nearly as bad as fans imagine. The performance value of the highest picks on average is indeed greater than that of lower picks, so you’re not delusional to want higher picks for your team. But the added value is not as much as you think it is. You get a much better “buy” later in Round 1 and early in Round 2.
Here are the players selected at No. 25 in the past few drafts: Tyler Linderbaum, Travis Etienne, Brandon Aiyuk. All of those have been pretty good value for their teams.
Getting a better buy matters in a salary-capped NFL. There’s a limit on what you can spend that is the same as the teams you’re competing against. Wise allocation of resources is paramount. In that sense, the 2023 Giants are in an almost ideal position from a surplus value standpoint. They have the chance to improve the team greatly while spending only $1.045M per draftee in 2023 on average for their 10 picks. In 2022 the Giants spent $10.2M on Kayvon Thibodeaux and Evan Neal alone. That’s one part of the answer to why Joe Schoen has been able to sign more free agents this year.
Using draft picks wisely
I can’t tell you who the best player is for the Giants to draft at No. 25 or with any of their other picks. We all have our favorites. There’s a good chance we’re wrong about those favorites. GMs know a lot more than we do, but they can be wrong too, a disturbingly large amount of the time.
What a team can do is to draft with positional value in mind, and to do so at the most favorable place in the draft whenever possible. The Massey-Thaler chart above doesn’t tell us how to do that, other than providing a general guide for how much to demand or give up in trade-ups or trade-downs.
One obvious flaw in the chart, however it is used, is that not all positions are created equal. And no position is more unequal than quarterback. In today’s NFL with rules that favor the quarterback and receivers, passing is king, and a franchise QB is the Holy Grail of all NFL teams that don’t have one. There’s a good reason for that. Timo Riske of Pro Football Focus showed a few years ago that QBs generate more wins above replacement (WAR) than other positions, especially near the top of the draft:
It’s not true all the time, as the tremendous spread in both QB WAR and WAR for other positions indicates. You can get Joe Burrow near the top of the draft but you can also get Zach Wilson, and conversely you can get Lamar Jackson late on Day 1 but more often than not you don’t. But overall, highly drafted QBs are the best bet to become impact players.
Ben Baldwin, writing in Open Source Football recently, redid the Massey and Thaler analysis with QBs removed. The resulting loser’s curse chart shows an even more dramatic increase in surplus value for picks outside the top five, all the way through most of the second round:
Expressing the y-axis in this plot as “value in % of the salary cap” gets the main point across - with a predetermined cap, the more players you can find whose “on-field value” is much higher than what they cost on their rookie contracts, the better your team is likely to be. You can blow past the cap in any given year by deferring the accounting of costs to later years, but being smarter about your spending in the first place limits how much of that you have to do to compete. Losing teams that always draft high can’t be smart about their first round spending because the high cost of those picks is baked into the collective bargaining agreement - they can only get high value at a high cost (if they choose wisely).
The most recent iteration on the loser’s curse concept is by Kevin Cole of Unexpected Points, who used Baldwin’s code but further partitioned the data to look at all non-QB NFL positions (other than special teams):
Some things in this chart are not a surprise, e.g., that the best offensive tackle and edge rusher values are likely to be had in the top half of the first round even though the rookie contract costs are highest there. A bit more surprising is that interior defensive lineman are just as much a value early in Round 1. IDLs got a bad rap the past few years as being mainly “run-stuffers” who don’t offer much in pass rush unless their name is Aaron Donald. But if you think about the 2019 draft, with Quinnen Williams, Christian Wilkins, Jeffrey Simmons, and Dexter Lawrence, it makes sense.
Presumably the Giants will not draft an IDL at No. 25, although you never know how the draft will play out. But the Giants certainly should be in the market for a cornerback or a wide receiver. Those positions also peak in value in the top half of Round 1, and no one will be surprised if 4-5 CBs and an equal number of WRs are already off the board at No. 25. But there is still plenty of value to be had later in Round 1, so prioritizing those positions makes sense if the right player is available.
The chart shows that a case can also be made to draft a center at No. 25, since interior offensive line value is high and flat throughout the lower half of the first round. Whether any of the C prospects this year is worth a Round 1 pick is a different question. The good news for the “fix the damn line once and for all” aficionados is that C value drops off slowly, with Round 2 being only a little lower in value than Round 1.
You may be wondering what those little upward jogs in all the curves are at the end of Round 1. That occurs because although first round salaries decrease smoothly with draft position through the end of Round 1, there is a much bigger drop once Round 2 begins. First year salaries go from $2.344M at pick No. 30 to $2.291M at pick No. 31 and $2.257M at pick No. 32. And then at the start of Round 2, pick No. 33 gets only $1.826M. The worst team in the NFL saves almost half a million dollars on its second pick relative to the Super Bowl champion’s first pick. Of course the 32nd pick comes with the fifth year option while the 33rd pick does not, which offsets some of that advantage.
Should the Giants have drafted Saquon Barkley at No. 2 in 2018? According to the chart, no. The No. 2 pick used on a RB has about the same value on average as a mid-third round pick. I would argue that Barkley is not your average back, and he has great value to the Giants in the absence of other true offensive threats. But most likely that pick will never be seen as having been worth it. The RB curve does peak in the middle of Round 1, though, albeit at a lower value than many of the other positions, so maybe some team will take a chance on Bijan Robinson.
But if you’re nodding your head up and down at that last paragraph and you think the Giants should consider linebackers Trenton Simpson or Jack Campbell at No. 25, think again. The LB curve is almost identical to the RB curve through the end of Round 2. The Giants should wait on LB.
Finally, the worst positions to draft in Round 1 from a financial value standpoint are tight end and safety. Value for these positions actually peaks throughout Round 2 and drops off only slowly after that, especially for tight end. The Giants may not be in the market for either after the acquisitions of Darren Waller and Bobby McCain, but if they are, it can wait until Round 3 or later.