26

April

NFL Draft Economics: Draft Trading and the Rookie Wage Scale

How much would trading up for a player like Clay Matthews cost the Packers in 2012?

Ted Thompson and the Green Bay Packers have a lot of options in the 2012 NFL Draft with 12 overall selections, and they are probably going to need them with some of the defensive holes they need to fill.

Our own “Jersey” Al Bracco spent time presenting some First and Second Round trade-up scenarios that could possibly occur, and Thomas Hobbes looked into Thompson’s trading history in relationship to the Trade Value Chart (TVC).

A lot of people are wondering, though, does the old TVC still apply?

This will be the first draft under the latest Collective Bargaining Agreement (CBA) between the NFL and NFLPA, and it comes with a shiny new set of rules for a rookie wage scale. Though we haven’t had a draft under these restrictions on pay, the 2011 rookie class did feel the effects of it when they were finally signed.

Below is a comparison of the contracted salaries of the top 10 picks in the 2010 and 2011 NFL Drafts. The numbers shown are in millions of dollars, and for simplicity in numbers, only the guaranteed amount has been recorded. It’s not a perfect barometer of the wage scale’s effects, but it should give you a general idea of what has happened:

SEL #

2010 Contract

2011 Contract

% Decrease

1

$50.00

$22.00

56.00%

2

$40.00

$21.00

47.50%

3

$35.00

$20.40

41.71%

4

$36.75

$19.60

46.67%

5

$34.00

$18.50

45.59%

6

$29.00

$16.20

44.14%

7

$26.00

$14.40

44.62%

8

$23.00

$12.00

47.83%

9

$20.80

$12.50

39.90%

10

$17.50

$12.00

31.43%

 

As for how this effects the draft, there are three basic things that could happen: (1) it will cost more to trade up, (2) it will cost less to trade up, or (3) there will be no significant change in trading values.

At first glance, it would seem the cost for acquiring a higher draft pick should go down. The players are being paid less money, which on the surface might seem like they’re worth less. (No, not “worthless.”) This, of course, is not the case at all.

Let’s go back to our high school economics class and the Laws of Supply and Demand.