An Experimental Method in Juxtaposing Draft Picks and Active Players

Abstract

Trading picks are a common transaction that is observed in sporting leagues that conduct player drafts. However, with its evolution, current iterations allow for the trading of picks and players, which in turn raises questions about valuing such trades. This study proposes a pick valuation system using survival analysis techniques, which was further extended to value players who were already enlisted. The model proved to be viable, allowing to evaluate trades involving both picks and players.

Valuing Australian football league draft picks

“…Moreover, they suggest that other factors such as player physique, state of origin and amateur league can further skew the performance variable, reducing the impact to playing time by the draft pick number alone. Other models developed using the contribution to the margin of victory [ 31 ] and survival analysis [ 36 ] reaffirm that player salary and performance are not necessarily perfectly correlated. The objective of the DVI is to improve the workings of the AFL draft, thereby assisting the league to achieve competitive balance.…”

“…The primary purpose for the AFL to create a DVI was to introduce a pricing structure so that the league could recuperate value from teams who utilise the F/S and C/A rules. However, the choice of player payments as the determinant of value has been found to be inadequate when compared to the alternative models presented in the literature [ 23 , 32 , 36 ] while also possibly creating arbitrage opportunities [ 31 ] and perverse incentives [ 41 ].…”

“…Studies that use games played have described it as a determinant rather than an outcome or measure of draftee performance [ 37 ]. Chandrakumaran [ 36 ] uses this in a survival analysis context and shows that the use of games played results in a slowly faltering DVI, unlike the AFL DVI, which drops at an exponential rate. In this paper, we also use BMV as a measure of performance.…”

Compounding endowment effects when trading draft picks in the Australian Football League

“…Initial iterations of the model used games played or time on field (in minutes) instead of CMV. However, with previous studies suggesting the decisional biases behind the use of players on field and their ineffectiveness in predicting performance, the CMV variable was used in the final model [ 32 , 33 ]. The list was further compensated by indicators for race (indigenous players recruited through the draft have known to outperform their counterparts [ 34 ]), Father-Son (F/S) selections prior to 2007 (teams who have selected sons of former players prior to 2007 were required to nominate the player using a third round draft pick which did not always correlate to their expected outcomes [ 35 ]), and drafting team.…”

Optionality in Australian Football League draftee contracts

“…For the purposes of this study, we used the survival estimate model proposed by Chandrakumaran [ 25 ] and Glasson and Bedford [ 26 ] as it enables the continuous evaluation of picks at different times in their careers. Survival models are commonly used in the pharmaceutical industry to evaluate the life expectancy of those involved in clinical trials.…”