Accounting Expert Says Teams Should Avoid ‘Trading Up’ During NFL Draft
Ahead of the NFL Draft’s arrival in Pittsburgh on April 23, a West Virginia University professor is challenging one of football’s most aggressive strategies and his data suggests teams are getting it wrong.
Christian Schaupp, professor of accounting in the WVU John Chambers College of Business and Economics, will be watching with other fans to see which teams attempt to “trade up” — a practice that allows teams to draft multiple lower-ranked value players in exchange for one higher-ranked player.
While the decision to trade up may seem like a field goal at first, research Schaupp co-authored — here and here — shows it often bounces off the uprights.
Quotes:
“Our research indicates that trading up in the NFL is generally a bad idea, and the outcomes are predictable using information available at the time.
“For example, the teams that trade future Draft picks for current ones pay a cumulative interest rate — based on player performance — of well above 100% per year. This obviously hamstrings the future of those teams. Trading future picks to get a top 10 current pick produces even worse results.
“Trading up goes back decades — prior to 1988, when our sample period begins — and is often seen as an advantage from the perspective of getting on-field production earlier, having more certainty about the values of the best players in the Draft, and, especially, a large perceived difference in values between higher and lower-ranked prospects.
“Many instances of trading up are done on the spur of the moment and are the result of surprises that occur during the Draft. A general manager may be startled to find that a player has remained undrafted and decide that the cost of trading up to get that player is worth paying.
“The Dallas Cowboys trading for the pick that got them Emmett Smith was a major success by anyone’s measure. A major failure was the San Francisco 49ers trading future picks, one of which was used to select Ray Lewis, to get an earlier pick when they selected J.J. Stokes.” — Christian Schaupp, professor of accounting, WVU John Chambers College of Business and Economics
