First Round Pick Signing Predictions

Our first project at Pigskinology.com was to create a model to predict the cost of signing a draft pick. On the surface, this seemed like a very simple and straight-forward task. We were surprised just how far down the rookie salary rabbit hole went.

First, we had to determine what number to measure the signing by. NFL contracts are typically reported in terms of length in years, total potential value, and guaranteed money (usually mostly comprised of the signing bonus). Those numbers are readily available and we cobbled together the last three years of rookie signings.

However, NFL contracts are especially misleading. Very few of them run their full, natural lives. For example, consider this imaginary contract: Player A signs for a deal for 10 years with $10 million guaranteed and $100 million maximum value. Naturally, we would assume that player would average $10 million per year for 10 years, even if the payments aren’t equal over time. What you do not see in that contract is that $15 million of that total value only vest if he wins the Heisman Trophy, Super Bowl, and World Series of Poker Main Event in the same year while dressed as a fish taco. Also, the player has the option to void the last three years of the deal if he makes a 7 or better on the 16^th hole at the local miniature golf course. At some point, it becomes clear that each NFL contract is unique and hinges on certain dates within the deal.

Based on the endless intricacies of each deal, we concluded that rookie signings should be judged in terms of guaranteed money. After all, if a team signed its first round pick during training camp and elected to cut him the next day, they would only be on the hook for the guaranteed money and any obligations to having the player on the roster for that day. We will consider base salaries and incentives at another time, but for this study, we considered guaranteed money to be the only “real” money worth following.

With that in mind, we started building models that built a relationship between the guaranteed money picks signed for in 2007, 2008, and 2009. We found that most signings followed a predictable curve. However, in some cases, players signed for significantly more than what we would have expected, given what the signings of picks immediately before and after him (in very few cases did picks sign for amounts below the expected curve). To account for this, we created a “premium” curve for each year, which captured what each pick would sign for if he signed for one of these elevated deals.

Some premium cases were understandable: QBs such as 2009’s Matthew Stafford, Mark Sanchez, and Josh Freeman, as might be expected, almost always signed for an amount closer to the premium curve than the normal expectation. Others took further investigation. Aaron Curry, the 4^th pick in 2009, signed for a significant premium. On further examination, Curry’s deal has a potential life of six years, while all but two of his fellow first rounders signed deals of four or five years. We hesitate to make assumptions based on contract length, but Curry probably sacrificed annual value (making it more palatable for Seattle down the road) for more guaranteed money up front. Another 2009 top ten pick, Oakland’s Darrius Heyward-Bey, also signed for a significant premium. His premium appears to be, well, that he was drafted by Oakland.

So with all of that in mind, here are our predictions for what the 2010 draft class’ first round guaranteed money. We have highlighted the picks we anticipate will fall closer to our premium curve, though these projections do not account for which picks sign 6-year deals.