The Economics of the NFL Draft: Improved Estimates of Draft-Order Valuations
The National Football League (NFL) allocates new players to the League’s 32 teams using the annual NFL Draft. Teams are permitted to trade various draft picks as the Draft is underway. In the early 1990s, “The Chart” was developed as a price-guide for teams in negotiating draft-pick trades. Massey and Thaler (2013) found that NFL teams make biased judgments in overvaluing the earliest picks relative to later picks. We maintain that Massey and Thaler used flawed input data in their analysis. With newly available player-standardized input data from the Pro Football Reference database, we provide improved estimates of draft-order performance valuations and then produce an improved version of “The Chart.” Using draft picks’ salary data, we identify where teams can expect to reap the most value per unit cost. Our results suggest that the NFL Draft’s middle rounds provide the most value per unit cost, with peak values occurring during the third round.