Playing Devil’s Advocate Part II: The Economics of the Packers Trading Up

Let’s play devil’s advocate one more time and look at why the Packers should trade up in the NFL draft.  This time I will be looking purely at the economics of the draft.  The classic example that Packer fans love in the 2005 NFL draft where Alex Smith was given the biggest rookie contract of all time at that point with $45.9 million deal with $24 million guaranteed while Aaron Rodgers only commanded a $7.7 million deal (less than Smith’s guaranteed contract) with $5.4 million guaranteed.  I’m not going to go in the relative value of Smith vs. Rodgers as players (as countless writers including myself have beaten the topic to death) but the take home message is that the Packers couldn’t lose economically: if Rodgers is the next Bart Starr, then they’ve got him at a discount for the first 5 years, if he’s decent the Packers paid a fair market value for him and if he’s a bust they can cut Rodgers without much penalty.  Smith on the other hand had to succeed; it was the only way to justify his massive contract.

The other important point was that the most effective draft pick is in the middle of the second round, which is where the talent of a player cost the least amount of money compared to the talent available.  Simply in terms of the Packers, if you get a Greg Jennings, Nick Collins or Jordy Nelson, then great since you’ve got a star at a fraction of the cost of the 1st round pick.  On the other hand, if you draft a Brian Brohm or Pat Lee, no big deal, you didn’t have all that much invested in them so they can be cut without ruining your salary cap.  A good comparison is between Mike Neal and Justin Harrell.  General manager Ted Thompson was essentially forced to find some value in Harrell due to his draft status as a 1st round pick and thus kept him on the roster even though he was always hurt.  Neal on the other hand as a 2nd round draft pick wasn’t a very risky investment, and in light of his injury concerns and his drug suspension, news is already out that the Packers could cut Neal rather than hold him on the roster.  If anyone plays Texas hold’em, it’s akin to staying in a game not based on the strength of your hand (which is what you want) but due to the amount of money you’ve already invested.