Michael David Smith of Football Outsiders argues that the famous chart created by Jimmy Johnson to determine the precise value of draft pick trades doesn’t take into consideration the salary cap hit high picks put on teams.
It was devised before the NFL had a salary cap. In 1989, NFL teams could pay their players as much as they wanted, but today every team has a maximum payroll of $109 million. And so instead of using the draft just to acquire good players, now teams also have to consider whether the players they draft are worth the salary cap space they’ll occupy.
That consideration is especially important because the first few players drafted instantly become among the highest-paid players in the league. When the NFL slices up the salary pie, the portion it gives to highly drafted rookies is huge. As the first pick in last year’s draft, Mario Williams received a six-year, $54 million contract with the Houston Texans.
When bad teams like the Texans devote significant resources to unproven players like Williams, it defeats the whole purpose of having a draft: The draft is supposed to level the playing field by giving the worst teams first dibs on the best players, but the combination of the salary cap and inflated contracts for high draft picks means those high picks drag the worst franchises down even further if they don’t choose wisely. Many NFL general managers wish the league would limit rookies to short-term contracts worth significantly less money than the top veterans make, like the NBA does.
Smith cites the 2004 trade in which the New York Giants sent Philip Rivers (the number 4 overall player in the draft) to the San Diego Chargers for Eli Manning (the number 1 overall pick) and draft choices that turned into Pro Bowlers Shawne Merriman and Nate Kaeding plus servicable offensive lineman Roman Oben to illustrate that, “In recent years, when teams have traded draft picks, the team that moved up usually got the worse end of the deal.”
That’s a good point but, as he acknowledges, that only works if you pick great players with those picks. In theory, at least, the top picks are the ones that are more likely to yield star players.
Smith is right, though, that the cost of an early first round bust can be catastrophic to a team, since they have to absorb a massive cap hit and still replace that player. Usually, with another early first round pick.
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