On NHL Trade Deadline Day, draft picks are a currency that teams exchange with alarming frequency. Teams in “win-now mode” are buying players they feel they need with the opportunity to add prospects they might never see on the ice. In some cases this makes a certain level of sense, but in others it seems absurd.
Drafting NHL talent is considered an art form in many circles around the league. The perception is that some people have talent for it and others do not. Unfortunately, due to the current state of affairs in most of the feeder leagues around the world there is very little information available for statistical analysis of potential prospects, and thus live scouting dominates the field.
Despite the fact that drafting is an inexact science at best, draft picks are traded around the league and treated like known quantities. Value is assigned to slots on a board, but their actual worth is rarely discussed in concrete terms. Generally speaking we know that first-round picks are worth more than second-round picks, which are worth more than third-round selections, etc.
The question is, how much MORE are they worth? Is the gap in their value as large as is commonly perceived? Should trading a first-round selection for a player who can help right now be done more often?
These are all questions that data analysis can help us to attempt to answer. There may not be a solution to all of the nuance involved, but with a more structured set of parameters we can identify where real value is being obtained around the NHL.
The NHL draft as it currently stands consists of seven rounds of 30 picks—or 210 selections in total. Since the switch to the seven-round format in 2005 there have been a few seasons featuring supplemental picks, but from a logic standpoint it makes sense in the current environment to restrict our analysis to the first 210 picks in any given draft year.
For the sake of a clear picture of how players are being developed we need to go back into past draft years as a majority of more recent draftees haven't had a fair opportunity to mature into NHL players yet. Using the results of NHL drafts from 1995 to 2007 one can identify the probability of a skater in a given draft spot successfully making it as a regular player. In this analysis, the probability was explored using thresholds of 60, 100 and 200 NHL games played.
In order to obtain a measure of the expected production of a player selected in a given slot, one can then multiply the probability of success of each draft position by the average production (PTS/GP) for a skater selected there. To normalize the results the goaltenders and defenders are filtered out of the analysis so that forwards were used as the basis for productivity. The main reason for this is that much of the available evidence implies that the identification of NHL-caliber defensive or goaltending talent through the draft is spotty at best.
The expected production for each draft position gives us a means to value individual draft slots on average for all NHL teams. In order to then compare the value of individual slots all we need to do is compare the individual draft slots as a ratio with the first-overall pick. That gives us the graph of relative pick value shown:
Using this graph, we can see that the most significant value in NHL draft picks lies in the first three selections, and the largest drop-off in pick value occurs between picks three and four. Players selected in the four-to-15 range are still generally very valuable across their careers with a 15th-overall pick being worth about 1/3rd of a first-overall selection.
The most interesting aspect here may be in the relative value disparity of picks within the first round. It becomes quite apparent that not all first rounders are created equal. A sixth-overall pick is approximately twice as valuable as a 30th-overall selection, which would be important for NHL front offices and outside observers to keep in mind when they casually discuss the idea of trading pending UFA rental players at the cost of a first-rounder.
Another way to think of this is the comparative worth of picks in various ranges of the draft. For example the value of a late first-round pick from a contending team is actually closer in value to any third-round selection than it is to a top-five pick. Thinking of this from a glass-half-full perspective for a team trying to rebuild, this suggests that adding multiple second- or third-round selections is likely an easier way to improve the roster of a team than holding out for that tough-to-obtain first-round choice when the market is far more thin.
The idea of quantity over quality is not a revolutionary concept in draft strategy. It is in fact an easy means of mitigating against the faults of a team's ability to identify elite talent. We need explore no further than the efforts of Bill Belichick and the New England Patriots, who have harnessed this tactic for years at the NFL draft with significant success.
In another reflection of the value of draft picks, the Philadelphia 76ers accumulated an astonishing 12 second-round draft picks (spread across four seasons) following the 2014 NBA trade deadline, and had been using them regularly as deal sweeteners to facilitate other player transactions. They then made an even more extreme series of transactions at the deadline this week to accumulate four first-round picks, and five second-round picks in the 2015 NBA draft.
Many observers are describing the behaviour of 76ers GM Sam Hinkie as bizarre and risky, but compare it to that of Tim Murray and the Buffalo Sabres. Entering this season the Sabres had accumulated three first-round selections and two second-rounders via trades last season with the Islanders and Blues. They then used the latest of the three first-rounders in the trade with Winnipeg that saw them acquire Evander Kane and Zach Bogosian last week. Buffalo still has two first rounders and, as the last-place team in the NHL, they are going to select very early in the second round with their own pick.
Draft picks contribute significant value as a currency in getting other moves done. Rebuilding teams and their fan bases need to keep that concept at the forefront of their thinking. Just try to remember that though not all draft picks are created equal, there's still significant value in those mid- to late-round selections. The lottery tickets in the second, third and fourth rounds are significantly cheaper than those in the first but there is a smaller difference in value between a mid-round pick and a late first-rounder than between a late first-rounder and a top-five pick. Accumulating as many of the cheap lottery tickets as possible still increases your chances of winning the jackpot.