On Friday night, reports emerged that the Washington Redskins had agreed to give the
St. Louis Rams their first and second round picks this year, along with their 2013 and 2014 first round picks in exchange for the second overall pick. While there are a number of storylines in this trade, this post examines the expected value that the Redskins sacrificed to get the second overall pick. Because I grew up in Washington, this post is Redskins-centric. If you are wondering how it affects the Rams, just flip all of the analysis below.
Using my previous analysis of the draft, this post examines two things: first, how much the Redskins actually paid for Robert Griffin III, and second, how well RGIII has to perform to justify this price. Because this trade involves future draft picks whose exact overall number is impossible to know, we must assign some value to them. Since teams cannot know what draft position they will have the following year, I assume that the expected value of those picks is the average of the picks in that round. For example, a future first round pick is worth the average value of all picks in the first round. Using this assumption, I evaluate this trade and compare it to the Julio Jones and Ricky Williams trades from previous years.
From an expected value perspective, the Redskins definitively lost this trade (to put it mildly). The second overall pick carries an expected Career Approximate Value Over Average (eCAVOA) of 435.4. The 6th and 38th overall picks have a combined eCAVOA of 525.1. If the Redskins had given up just these picks, they would have lost 89.7 eCAVOA, which is the equivalent of the 114th overall pick (the middle of the 4th round).
If this price had been the extent of the trade, it would have been defensible. A 525.1 eCAVOA translates to a CAV of 78.7, essentially equaling Matt Hasselbeck’s CAV. So RGIII would have only had to equal Hasselbeck for this trade to be equal.
However, the Redskins gave much more: their next two first round draft picks. The average expected value of a first round pick is 276.8 eCAVOA, which brings the total eCAVOA the Redskins gave up to 1078.7. The Rams only gave up 435.4 eCAVOA, giving them a net gain of 643.3 eCAVOA, equivalent to the first and 57th overall draft picks.
However, the above calculations assume that picks this year have equal value to picks in the future. Since that assumption is false, we have to discount the value of those draft picks. We can calculate the discount rate the Redskins placed on their future first round picks by setting the values on each side of this trade equal to each other, with r equal to the discount rate:
6th pick + 38th pick + 2013 1st Rounder + 2014 1st Rounder = 2nd pick +surplus value
341.5 + 183.7 + 276.8/(1+r)n + 276.8/(1+r)n+1 = 435.4 + surplus value
276.8/(1+r)n + 276.8/(1+r)n+1 = -89.8 + surplus value
This equation cannot be solved where surplus value = 0. Even if r equaled infinity, this equation would not balance without a surplus. The only way it could be possible would be if the Redskins negatively valued their future first round draft picks. Given their previous willingness to trade away picks, this may not be far off. However, assuming that having first round picks is actually good for your team, this trade is awful for the Redskins.
But just how bad was this trade? In The Loser’s Curse, Cade Massey and Richard Thaler found that teams discount future draft picks at a rate of 173%. I agree with the authors’ comment that this discount rate is “staggering”, but it is much less clear what rate teams should use. With this value, our equation becomes:
276.8/(2.73) + 276.8/(2.73)2 = -89.8 + surplus value
138.5 = -89.8 + surplus value
228.3 = surplus value
An eCAVOA of 228.3 equates to the 22nd overall pick. So with this trade, the Redskins lost the expected value equivalent to the 22nd overall pick.
But let’s not jump to conclusions. RGIII could be better than the average second overall pick. In fact, he could be the best second overall pick ever. So how good does RGIII have to be to justify this trade?
Given the discounted value of the future draft picks, the total price the Redskins paid was 753.5 eCAVOA. That price translates to a CAV of 113.0, comparable to Tom Brady’s current production to date (109 CAV). For the Redskins to get the equivalent value from RGIII as they spent acquiring him, he must produce at least as much as Tom Brady. If RGIII merely lives up to his eCAVOA, he’ll finish his career having slightly outperformed David Garrard (61 CAV). Because all-time-great quarterbacks are rare commodities, the Redskins likely lost value both on paper and in reality.
This trade is very comparable to some of the most lopsided trades from the past few years. Last offseason, the Atlanta Falcons gave the 26th, 69th, and 124th, overall picks along with their 1st and 4th round picks this year for the 6th overall pick, which they used on Julio Jones. The calculations below determine the value they lost from this trade.
26th pick + 69th pick + 124th pick + 1st rounder + 4th rounder = 6th pick + surplus value
216.1 + 132.7 + 82.5 + 276.8/2.73 + 91.9/2.73 = 341.5 + surplus value
224.9 = surplus value
This calculation shows that the Falcons sacrificed almost the exact same value to acquire Jones as the Redskins did for RGIII. For the Falcons to get the same value from Jones as they spent drafting him, he must perform similarly to Keyshawn Johnson (78 CAV).
For what it’s worth, the Redskins trade is still much better than the Saints’ trade for Ricky Williams. In 1999, the Saints traded the 12th, 71st, 107th, 144th, 179th, 218th, along with a first and fourth rounder the following year for the 5th overall pick.
665.7 + 276.8/2.73 + 91.9/2.73 = 357.1 + surplus value
443.7 = surplus value
That surplus is almost exactly double what the Falcons and Redskins gave up in their trades. For the Saints to get the production that they paid for out of Williams, he would have had to perform as well as Barry Sanders (CAV of 122). A Hall-of-Fame career is too much to expect from any draft pick.
Regardless of the rationale behind this move, the Redskins lost a tremendous amount of value in this trade, potentially setting the team back for years. If RGIII does not pan out – whether because of talent or injury – Washington would be left with no quarterback and no first round draft picks for the next two years. Regardless of RGIII’s future, the Redskins lost about as much expected value as the Falcons gave up last year to acquire Julio Jones. While RGIII will bring excitement to Washington, the conclusion here is clear. This trade was a bad move by the Redskins, and one of the worst moves in recent history. Vintage Redskins.