The draft day deal explained

Matt Horner
June 21, 2012

Erik Karlsson, Logan Couture and Tyler Myers all joined their respective clubs through aggressive draft day deals that saw the Senators, Sharks and Sabres move up in the draft to nab them. However, not all draft day deals are created equally, and these types of swaps often reduce the chances of drafting a premier talent.

Scott Cullen of TSN examined the value of draft picks in two separate studies in 2009, one using subjective evaluations of first round picks from 1995 to 2004, and another which looked at all draft positions from a 30-year period and added a games played measure to evaluate draft choices.

What stands out the most is that in the first round, there are three major drops in a team’s likelihood of drafting a quality player. Obviously, the top of the draft is the best, and teams with one of the first three picks have about a 60 percent chance of nabbing a top-six forward or top-four defenseman. From picks four to six, teams have about a 40 percent chance of selecting one of these players, while picks seven to 13 have about a 30 percent chance. The final drop off in terms of pick quality comes in the latter half of the first round, when from pick 14 to 30 teams have about a 15 percent chance of a quality player.

Using this data, teams should be able to make informed strategies for draft day trades. Not all teams trading up increase the value of their draft picks – only those that trade into the next tier. So teams from four to six should try to trade into the top-three, teams from seven to 13 should try to trade into the four to six range, and teams in the last half of the draft should try to trade up into the 7 to 13 range. 

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What doesn’t make sense is making lateral trades in which the new pick essentially has as much value as the old pick. For example, trading from 13 to seven looks good on paper, but in reality the difference in value between the two picks is almost non-existent and, on top of that, it probably cost a second round pick to move up. It’s important to note that making a lateral trade isn’t always negative (both Couture and Karlsson were obtained through this type of trade), but statistically speaking, over time this type of trade will reduce the odds of landing quality players.

Therefore, if a team can’t trade up high enough, their best tactic would be to trade the pick and move down a few spots in the draft. If a team can trade the seventh pick for the 13th pick, they aren’t any less likely to draft a player of similar quality, and whatever other pick they acquire will increase their chances of drafting a better player later in the draft.

This is important because after the first round the value of a draft pick decreases incredibly, although with little variation across the second and third rounds. From the beginning of the second round until midway through the third, teams have about a 25 percent chance of drafting a player who will play 100 games in the NHL. Once the fourth round commences, the chances of a player meeting even this minimal accomplishment is less than 10 percent, and the value of draft picks from the fourth to seventh rounds are largely the same.

So, in the example above, if the team trading the seventh pick gets a second round pick in addition to the 13th, they haven’t lost any value on their first round pick, but they have doubled their chances of getting an NHL player out of the second round.

Furthermore, being able to trade up from the second round to the first round is a good bet. Trading into the 26-30 range from the second round doubles the chances of drafting a player who will play 100 games, and finding a way into picks 21-25 almost triples those chances. That means that teams willing to trade a pair of early second round picks are receiving equal or greater value if they can land a pick in the final third of the first round.

Since the lockout, that’s exactly what it has cost for a team to get a draft pick late in the first round on draft day. However, to get into the 21-25 range, teams have almost always needed a late first round pick to deal, plus a second or a third rounder. This type of trade makes less sense as the difference between picks from 20-30 isn’t significant and it means substantially decreasing your opportunity of finding someone outside the first round.

If teams are unable to deal a pair of second round picks to get into the first round, the best strategy might be to deal down even further. With no difference in pick quality from the second round until closer to the fourth round, dealing a second round pick for a pair in the third rounders makes a lot of sense. At that point in the draft it becomes about quantity, not necessarily quality.

Moving up in the draft always creates a buzz and gives fans something to be excited about. Unfortunately, despite some high-profile deals, it isn’t always the wisest strategy, and over time can actually make drafting harder than it already is.

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The Author:

Matt Horner