Trading Down with First-Round Picks Is a Path to NFL-Title Contention

New England Patriots head coach Bill Belichick during the third quarter against the Cincinnati Bengals at Paul Brown Stadium in Cincinnati, Ohio, December 15, 2019. (Joe Maiorana-USA TODAY Sports)
Patient general managers willing to exploit other teams’ lust for a quick fix can build pro-football dynasties.

As the 2020 NFL Draft gets underway tonight, many teams will likely be scrambling to make trades involving draft picks.

Egregious mistakes have happened during past drafts. In the first round of the 1982 draft, the Tampa Bay Buccaneers, holding the 17th pick, accidentally submitted two names over the telephone and ended up with guard Sean Farrell when the player they really wanted was defensive end Booker Reese. The Bucs then tried to make up for that mistake by trading their first-round pick in the next year’s draft, but instead they set themselves back further.

Almost 40 years later, Tampa Bay suddenly has reason to be excited again. The team has now acquired Tom Brady, arguably the greatest player of all time at the game’s most important position, and tight end Rob Gronkowski from the six-time Super Bowl champion New England Patriots.

One secret to the success of the Patriots’ dynasty is that its architect, Bill Belichick, is a master of the draft, and in particular of extracting value from other teams by trading down for more draft picks. Many NFL general managers have long overvalued first-round picks, giving up too much in future draft capital to acquire them, and Belichick has been all too happy to use that to his advantage. But he’s not the first to build a consistent title contender through shrewd drafting.

When Jerry Jones bought the Dallas Cowboys in 1989, the once-proud franchise was at its nadir. In the first two seasons after Jones bought the team and hired his old-time Arkansas teammate Jimmy Johnson as its head coach, the Cowboys went 1–15 and 7–9, failing to make the playoffs. But Jones had a secret weapon: His partner in the oil-exploration business, Mike McCoy, was hatching a scheme to turn the team around through draft-pick trades.

McCoy had asked his assistant to give him the list of all pure “pick-for-pick” trades from the past four NFL Drafts (1987, 1988, 1989, and 1990). One thing he noticed was that the relative value of picks in the draft order seemed to decay exponentially, with picks declining less in value the longer the draft went on. (For instance, the drop in value from the first pick to the 33rd pick is much larger than the drop in value from the 33rd pick to the 65th pick.) Here, McCoy realized a parallel with the oil business: The amount of oil produced by a given oil well also decays at a decelerating rate over time.

Intrigued, he set out to plot those four drafts’ worth of trades on semi-log graph paper, which is commonly used in the oil industry and allows one to transform a decelerating, non-linear trend into a linear one. Having plotted his data points, he traced a line across the entire draft order from the first pick to the last, in essence showing each pick’s relative worth. He then assigned a certain number of points to each pick in the draft order. He arbitrarily chose 2,400 for the first overall pick. The second overall pick would be worth 2,175 points, the sixth overall pick 1,300 points, the tenth overall pick 1,050 points, and so on. After a few iterations, a finalized version was produced, and this table of points became known as “the chart.”

It was just the weapon the Cowboys needed to get back on top.

The team Jones inherited was, as you might expect, bereft of talent. But it did have at least one valuable asset: Heisman Trophy–winning running back Herschel Walker. Johnson, eager to restock the team’s cupboard, shopped Walker around in 1989, eventually settling on a massive offer from the Minnesota Vikings. To this day, the Walker trade remains the largest in NFL history. It yielded the Cowboys a whopping eight draft picks before all was said and done, and was the genesis of a new dynasty.

Using McCoy’s chart, which would later become a template followed throughout the league but was at that point still unique to Dallas, the Cowboys got to work turning the picks from the Walker trade into even more value, fleecing teams that didn’t properly understand each pick’s worth. The results speak for themselves: The Cowboys went to the Super Bowl and won in 1993, 1994, and 1996 with Troy Aikman at quarterback, Emmitt Smith at running back, and Michael Irvin at wide receiver.

In 1996, after three Super Bowl wins, McCoy returned full-time to the energy industry and sold his minority stake in the Cowboys to Jones. Since then, “the chart” has become a standard tool in NFL front offices, and the advantage it once afforded the Cowboys has dissipated. But that doesn’t mean there aren’t still market inefficiencies to be exploited in the draft.

Back in 2013, Nobel Prize–winning economist Richard Thaler and Wharton economist Cade Massey published a behavioral-economics paper in which they argued that teams were overvaluing first-round picks because of “present bias,” the desire to win immediately rather than building a team patiently over a longer time frame. A savvy NFL front office could exploit this bias by systematically trading higher-round picks for more picks further down in the draft order and present-year picks for higher-value picks in future years.

While some NFL teams with adept analytics departments such as the Cleveland Browns have caught on to this strategy in recent years, Bill Belichick has been employing it for much longer. He read a previous version of the Thaler and Massey paper in the early 2000s and used its insights to great effect. He has traded down with his first-round draft picks in seven of the 19 NFL drafts over his tenure, and the results speak for themselves: Not just those six Super Bowl wins, but 16 playoff appearances, 18 division titles, and ten conference championships. He’s not done yet, either: He may well trade down with the 23rd overall pick tonight.

Jon Hartley is an economics Ph.D. student at Stanford University and a visiting fellow at the Foundation for Research on Equal Opportunity. He formerly served as a senior policy adviser to the Congressional Joint Economic Committee.


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