The Time Value of Draft Picks in Trades

A current second-round pick is more valuable than one next year. But how much does draft pick value change from year to year? Time to find out.

Rookie draft picks are undoubtedly the currency of dynasty fantasy football leagues. Any time I am negotiating a trade, I discuss how I value players in terms of draft picks. Even if my trade partner and I are swapping players. It also gives dynasty fanatics an edge when discussing trades with friends or experts outside of their league. Just try to ask someone in a redraft league about a trade when they have no idea who is available for trade.

It is much easier and efficient to say that player X has 1^st round value than to come up with a list of names of equal value. However, when you start negotiating with future picks it can be difficult to determine draft pick values when you do not know who will be available to draft at that time. This is why I now employ a concept that I refer to as the time value of draft picks.

Time Value of Money

If you have taken finance classes or just have an interest, you may already know this term. However, if this is new to you, let me give you a brief introduction. Time value of money refers to the idea that money now is more valuable than money in the future. Much of this is due to inflation. Just think back to the price of gas or milk 10 or 15 years ago, or imagine what it might cost 10 to 15 years in the future.

The other aspect that is just as important is the opportunity cost of receiving money later instead of right now. If you receive payment for something right now, you have the ability to invest it or spend it on something, but if payment is delayed you do not have that opportunity.

Adapting Time Value to Fantasy

What does this have to do with rookie picks again? In dynasty leagues, rookie draft pick value fluctuates throughout the year. But most of us will always value a second-round draft pick this year over a second-round draft pick next year. If that seemed obvious to you, then you are already putting this concept to use.

Not only do you get the joy of drafting that second-round player sooner, but you also get the advantage of scoring fantasy points with the player. If he proves to be a stud, you may even be able to get a return on your draft pick via trade before the next rookie draft even happens.

My general rule is to reduce the draft round by one for each year in the future it is. For example, a 2021 second-round pick would be equal to a 2022 first. That was based on nothing more than my gut feeling, so I took a look back at one of my dynasty leagues to find out if my gut was right.

Setting up the data

To do this I started by listing out each of the first 36 picks in my league’s rookie draft and recording their total fantasy points in 2020, games played, points per game, and that player’s current Sleeper ADP in IDP leagues. Next, to get an idea of the current value of the same draft position, I recorded the current ADP of 2021 rookies and calculated the difference in ADP.

For example, Najee Harris currently has an ADP of 19.75 according to IDP Guys ADP data and is the highest rookie listed. Last year’s number one pick was CEH, currently with an ADP of 25.5. That comes out to a difference of 5.75 draft positions, meaning last year’s number 1 pick is currently 5.75 spots less valuable than this year’s number one pick.

Finally, I grouped the players into cohorts of 6 players to help balance the outliers of the group that either overperformed or underperformed their draft position and summarized my findings in the table below.

The Hard Numbers

As you can see from the table, all of the player groups increased in value, except for the players drafted from 7 to 12. (Tua Tagovailoa, Henry Ruggs, and Jalen Reagor were all in this group and all decreased significantly). The ADP of a player group tends to be closer to the ADP of the rookies who were picked half of a round earlier this year.

For example, the players picked from 13-18 have a combined ADP that is within 11 spots of rookies 7-12 this year but are twice as far from the rookies picked 13-18 this year. This would support valuing a pick this year about half of a round more than a pick next year if looking only at the relative value of the picks and ignoring the points scored by the players last year. However, this change in value is not consistent so I kept looking.

Individual Case Studies

When looking at the players individually, I found that my league hit on about 61% of the top 36 picks. I defined a hit as a player whose current ADP is better than the corresponding 2021 rookie pick. As expected, the hit rate was better earlier in the draft compared to later. I also randomly selected 12 players to look at individual examples to find out if my rule of thumb of diminishing the value of a future pick by one round worked out.

Of the 12 players, only three moved their value more than one round (two improved by two rounds while one diminished), meaning that if you were trading a pick away and asked for a one-round improvement on the pick, according to my philosophy, you would have made out well or at least fair 2/3 of the time.

Grading myself

I am a big believer in self-evaluation, so I could not resist the urge to evaluate my performance in last year's draft according to these parameters. For context, this is a 10 team, 2 quarterbacks, 1/2 PPR league with an extra 1/2 PPR for tight ends. At the time of the last draft, we started one defensive lineman, three linebackers, and one defensive back (this year we will start two, three, and two).

My picks were J.K. Dobbins and Joe Burrow at 1.05 and 1.06, Chase Young at 2.07, Bryan Edwards at 3.05, Patrick Queen at 3.07, Lynn Bowden Jr. at 5.05, and Antoine Winfield Jr. at 6.05. Lynn Bowden and Bryan Edwards are my current misses. Overall, I am happy with my picks. The picks were not perfect, but 5 out of 7 are giving me a return on my investment.

Not to mention the points that I got from Dobbins, Burrow, Young, and Queen when they were in my lineup last year. My best pick in terms of return on investment was Patrick Queen. His current ADP is 139 spots higher than the corresponding draft pick, putting his ADP in the range of the 7th pick in this year's rookie draft.

The Time Value of Draft Picks in Practice

This exercise has confirmed that even without considering points scored, future picks are less valuable than current picks. I will continue to devalue a pick offered in next year’s draft by at least one round. When trading away picks, consider offering future picks that are a little higher.

After all, fantasy managers are often enamored with the thought of a 1st round pick, no matter the year. But now you and I know that 1st round pick is more than likely no more valuable than a second.

Thanks for reading! If you are ever looking for some fantasy feedback, hit me up on Twitter @DynastyDVM and follow @IDPGuys for more great content.