Upside Down

It is of course the ultimate no brainer to say pick 1 in the draft is more valuable than pick 2. Or pick 23 is more valuable than pick 24. But there is one spot where this most obvious of axioms breaks down. Believe it or not, pick 11 is probably a more valuable pick than pick 10!

Let me explain. Under the Rookie Wage Scale all draft picks are signed to 4 year deals, but 1st round picks have team options for a 5th year at defined rates. If the team wishes to exercise that option it must do so by the end of year 3. For top 10 picks the 5th year option salary is set at the average of the top 10 paid players at the pick's position. But for guys picked from 11 through 32, the salary is set at at the average of the 3rd through 25th paid players at their respective positions.

This has some rather large $ consequences. The average of the top 10 guys at a position roughly corresponds to Pro Bowl level compensation. The average of 3 through 25 roughly corresponds to Joe Lunchpail average NFL starter level compensation. So by moving back one slot, from 10 to 11, if your pick pans out as a top shelf NFL star, you get to keep him for a critical 5th year at below market rates. This is a substantial benefit under the cap, as the 5th year is the sweet spot in most top players' careers when they are at the peak of their performance. Having that kind of guy at below market rates is a big deal. But if your pick was just one pick higher, your guy would have to be an All Pro type guy to get any real benefit from the 5th year option. Add in the fact that over the first 4 years of the contract pick 11 costs you $700,000 less than pick 10, and I think there is a very good case for valuing pick 11 higher than pick 10. Of course this analysis goes out the window if you love a guy at pick 10 who won't be there at pick 11 and there is no comparable talent to choose from, but in most cases the quality of the guys available at pick 10 and pick 11 are extremely close, and often your guy will be there at either pick. So it may make sense for teams owning pick 10 to seek to trade down, even (though you would never see this in real life) straight up for pick 11.

This may have implications for the Jets in 2013, as they are the proud owners of pick 9. For the same reasons pick 11 may be more valuable than pick 10, the benefits of trading down from pick 9 are significantly larger than the benefits of trading down from pick 13. If the Jets intend to trade down, pick 9 is the pick they should trade, so as to reap the potential benefit down the road of a bargain priced 5th year option.

Many have argued that pick 33 has similar benefits over pick 32, because of the large difference in salaries for second round picks as opposed to first round picks. Pick 32 will cost you $1.3 Million more over the 4 years of the rookie contract than pick 33, so many have argued pick 32 should always look to trade down into the second round, where you can pay a very similar player considerably less and also pick up another lower round pick in the bargain. But I would argue that the 5th year option makes this calculation dubious. Second round picks have no 5th year team option, meaning they become free agents and have their compensation raised to market value 1 year sooner than first round picks. So that $1.3 million you save by moving down 1 slot into the second round can be viewed as the price for a 5th year option.

This makes the calculation very interesting. The 5th year is usually one of peak production for a player who pans out and ends up justifying his first round draft selection. If you KNEW your guy was going to pan out, you would not hesitate to pay $1.3 million to secure that 5th year option at below market rates. But of course you don't know. So you have to weigh the cost of paying more for your late 1st round pick versus an early second round pick against the benefit of the 5th year option if your pick pans out. Which is the better choice isn't clear, but I personally would rather secure that 5th round option, so that IF your guy works out, you get a 5th year of somebody like Mo Wilkerson for a bargain price at the absolute peak of his career.

Again, this may have direct implications for the Jets. If they should succeed in trading down with the 49ers and picking up picks 31 and 34, it may make a great deal of sense to try to move back up into the 1st round with the 34th pick, in order to secure that valuable 5th year option. While it is much more of a stretch, the Jets might even consider what it would take to move up from pick 39 into the first round, again to secure that 5th year option. One way to do that might be to package pick 9 and pick 39 and send them to the Rams or the Vikings for their 2 first round picks plus whatever additional picks make the trade fair for both sides. In effect, the Jets would be trading up AND down, all in an effort to squeeze every last marginal benefit the quirks of the Rookie Wage Scale provide a GM who understands its intricacies. John Idzik strikes me as just such a GM, and I wouldn't be surprised if we see considerable wheeling and dealing that will in the end drop the Jets down from the top 10, and raise the Jets up from the early 2nd round back into the first. It will be fun to see just what Idzik is made of in his inaugural draft.