Are Final Four Stars Overvalued in the NBA Draft?

By Kurt Bullard

One of the lasting images from this year’s rendition of March Madness was Malachi Richardson of No. 10 Syracuse “ going mad” against No. 1 Virginia in the Elite Eight. The freshman put up 21 second-half points while matched up against ACC DPOY Malcolm Brogdon, helping close a 15-point deficit with less than 10 minutes remaining in the game en route to the Final Four.

All of a sudden, Malachi Richardson went from not appearing in any mock drafts to appearing in most versions. Within weeks, he was jumping up mock drafts to the first round. The shooting guard then entered his name into the NBA draft in the new early entry process to test the waters. Finally, on May 18—less than two months after reaching the Final Four with the Orange—the freshman signed with an agent, ending his time in central New York, breaking my heart as a Syracuse fan as I saw ‘Cuse title hopes vanish before my eyes.

Such is not the only time a huge March Madness performance helped boost draft stock and fill the pockets of future first-round draft picks. Recency bias—and only being 21 years of age—brings to the forefront of my mind a few names: Shabazz Napier and Kemba Walker of UConn, Michael-Carter Williams of ‘Cuse and Trey Burke of Michigan, all of whom helped lead their teams to the Final Four as an underdog, arguably as the best player on their team for that stretch.

There are two ways that one can look at players whose stock rose dramatically as a result of a great March Madness. One could be that these players came into the tournament undervalued and then the exposure in the limelight brought their market value to their actual value. The other way to see it is that the players entered the tourney properly valued but then leave it overvalued due to people reacting to really great performances over a small stretch of games.

It’s tough to qualitatively or quantitatively define who had a “breakout” March Madness, so I went about testing whether being on a Final Four team the year before declaring for the NBA draft had any predictive power—for better or worse—on a player’s performance over the first four years of his career, controlling for draft pick. In this analysis, I only looked at first-round picks, and looked at NBA players drafted from 1985-2011, since 1985 was the start of the NBA Lottery Era, and 2011 was the last year that draftees would have completed four years in the league. In this time period, there have been 108 first-rounders who have also made the Final Four.

As one last side note, I measured performance in terms of cumulative win shares, which seems to be an accepted norm in the NBA analytics community.

Using a general additive model, which allows for nonlinear effects of predictor variables (i.e. the drop in value from Pick 1 to Pick 2 is different than the drop in value from Pick 29 to Pick 30), I regressed the total win shares against both the players’ draft pick and whether or not they reached the Final Four. The general additive model does not have coefficients, but does show whether or not the predictor reduces the sum of squared error by a significant amount. The following is a plot of the predicted win shares over the first four years of a draft pick’s career.

The specific draft pick explains a lot of the wins added over an average draft pick. The following output summarizes the entire model.

Screen Shot 2016-05-25 at 11.58.56 PM.png

As is shown here, players in the Final Four, on average, are not systematically overdrafted or underdrafted. This is similar to what Henry Johnson found in college football, showing that players from championship teams were properly rated on average.

This analysis, of course, is all Final Four players, and not just ones who rose to prominence. It also doesn’t account for the Tournament gaining more popularity over the years. I tried an additional regression with an interaction term between the dummy variable for Final Four appearances and the year of the draft, put it didn’t have a large effect.

So if Malachi Richardson goes to your team in the draft, don’t be afraid. Despite some notable busts, Final Four stars tend to pan out well in the Association.

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