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Re: Important Draft Consideration Regarding Value

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  • tajallie@hotmail.com
    Kevin, I don t think these positions are incongruent. Overall, I think there is a transfer of wealth from veterans to rookies . . .ie the reason why there are
    Message 1 of 3 , Jun 3, 2004
      Kevin,

      I don't think these positions are incongruent. Overall, I think there
      is a transfer of wealth from veterans to rookies . . .ie the reason
      why there are decent value underpaid vertrans such as Rob Strickland,
      Chris Whitney, Robert Pack or Derrick Martin and the others
      mentioned. I believe two factors explain this:

      1) Bargining power for a 1st draft pick does not equal production bcs
      of the additional costs to a team not to sign its top draft choice;
      and
      2) The picks that do perform are vastly underpaid. Top performing
      picks such as Anthony, Wade, and James would certainly be worth
      multiples of there rookie wage scale (as would steals like Josh
      Howard).

      However, in 15-28 range it is really a crap shoot and as a result you
      often overpay for production. Glancing at the @ 2002 draft included
      Dickau, Jefferies, Frank Williams, Q Woods, Ryan Humphrey, Curtis
      Borchard, and Nachbar who I would guess were overpaid for their
      production, a number of players that probably came close to their
      value (Rush, Dixon, Welsch, Jacobsen, and Salmons), one incomplete
      (Kristic) and one excellent return (Prince). The 2001 draft had two
      major "Home Runs" (Parker, Randolph) and few decent value picks
      (Dalembert, Haywood, Tinsley and Collins). I could be wrong but
      Hunter, Haston, Bradley, Forte, Saasser, Amstrong, and Wallace
      probably didn't produce at the level equal to what a $1 million could
      have got for a veteran player, and one incomplete (Lopez).

      My point being there is an incentive take a risk on big upside (note
      that two of the "home runs" were 18 and 19 years old), bsc then you
      do get a steal in value. Late round pick, pick on potential bcs you
      can find a average role players so why add someone when limited
      upside?

      -Brendan-

      PS Even the role players that improved (Posey, Daniels, Blount, Bell)
      were servicable role players without the improvement. That's why they
      were signed at reasonable prices. Thier overperfomance was just a
      bonus. Just compared to the 50/50 chance of getting nearly nothing at
      the bottom of the draft pretty much there is always a $1 million vet
      you could sign for 8-10 man performance. I am sure you could get
      Doleac, Bowen or Andersen off the Nugs this year and be assured of at
      least a minimum level of production @ ~ 1 million or less each.

      PPS Yea, I think Blount will be oversigned, but if you want a min
      wage body in the middle instead of $750K for a Brian Cook, how about
      Michael Stewart or if you want to invest a little more how about a $1
      for Samaki Walker?

      --- In APBR_analysis@yahoogroups.com, "Kevin Pelton" <kpelton08@h...>
      wrote:
      > > Its important to remember that the economics of the NBA are much
      > > different than MLB. With the exception of the top 10 picks,
      rookies
      > > are often overpaid for the thier production when compared to the
      > > what low level exemption can bring you on the FA market. In
      > > baseball young players are locked up for so long that a team can
      > > benefit from the production over the cost analysis. The NBA
      draft -
      > > rookie scale historically has had that advantage for NBA teams
      >
      > With all due respect, this attitude simply isn't supported by the
      > evidence I've seen.
      >
      > The best comes from DanR's paper "It doesn't pay to be young in the
      > NBA" (http://www.uncg.edu/bae/people/rosenbaum/youngnba1.pdf)
      >
      > Dan summarizes:
      >
      > "Using this data, I describe how the last two collective bargaining
      > agreements have resulted in an annual transfer of $200 million from
      > non-veteran to veteran first round picks. I find that this transfer
      > cannot be explained by declining relative productivity of non-
      veteran
      > first round picks, as measured by their playing statistics."
      >
      > It's pretty clear from the numbers that DanR presents -- as well as
      > intutively -- that teams would be willing to pay a lot more to
      their
      > draft picks were it not for the rookie scale that's in place.
      >
      > I took a more theoretical look at the issue and produced this chart
      > of rookie production vs. salary:
      >
      > http://www.sonicscentral.com/rookiecontracts.jpg
      >
      > I don't recall doing the specific calculation, but it looks like
      > teams are receiving about twice as much value as they're paying for
      > from these players. Now, my study does have the problem of being
      > based off a linear weight measure that doesn't appropriately
      account
      > for the fact that young players are likely worse at defense, but
      half
      > is a lot of value to account for. They ain't that bad at defense.
      >
      > From a logical perspective -- if players on rookie contracts
      weren't
      > systematically underpaid, why would there be a need for a rookie
      > scale? Teams wouldn't be willing to pay them any more anyway.
      >
      > > There are always a a bunch of relatively inexpensive vets like
      > > Jimmy Jackson, Veshon Leonard, Gary Trent, Jon Barry, Mark
      Blount,
      > > James Poseys, Raja Bell, Stephen Jackson, Antonio Daniels,
      Calbert
      > > Cheney etc to be signed for $1-2 million that mid to late first
      > > rounders get with more certainity of production.
      >
      > I think you're dramatically underrating the variability in
      > performance for veteran players.
      >
      > Let's look at the players you listed:
      >
      > - Blount improved from 43.2% shooting to 56.6% from the field. (He,
      > incidentally, is a good bet to be a free-agent bust based on that
      two-
      > point percentage variability information I mentioned earlier.)
      >
      > - Posey improved his true shooting percentage from 51.9% to 61.4%
      > while increasing his share of possessions.
      >
      > - Bell boosted his per-minute scoring from 9.4 points per 48
      minutes
      > to 21.7 points per 48 minutes without a noticeable drop in
      efficiency
      > (50.9% ts% to 50.0%)
      >
      > - Daniels improved his assist rate from 4.7 per 48 minutes to 9.5
      and
      > his assist/turnover rate from 2.66 to 4.89
      >
      > Together these players averaged $1.8 million in salary last year,
      but
      > I assure you that if teams knew the kind of production those four
      > players would put up -- as well as Jackson, whose performance
      wasn't
      > really a surprise, but whose performance was also considered
      anything
      > but certain entering this season -- they would be making
      > significantly more.
      >
      > It's easy to say those guys are bargains after the season is over,
      > much more difficult to do it beforehand.
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