In finance, there is a theory that a dollar today is worth more than a dollar tomorrow. This is due to inflation reducing the purchasing power of that future dollar. The same appears to be true in the dynasty community while absent an inflationary environment. The aggregate value of all players, at any given time, will remain the same in theory. However, a current year rookie pick is worth more than that equivalent pick a year or two out. Due to this “miscalculation” or “premium for planning”, it makes sense to continuously trade our current year rookie picks back two years and add additional value to the trade to make them even.
A Look at the Market for Rookie Picks
Currently, the dynasty community is valuing the 2023 rookie class very highly. The numbers are a little more skewed than they otherwise would be if all classes were valued equally. I am not sure if 2022 should naturally be higher or if 2023 should be lower. But, let’s put this fact aside for the purposes of this analysis. If we look at KeepTradeCut (KTC) 2022 vs. 2023 vs. 2024 non-SF rookie pick values outside of the 2023 anomaly, we will see that values do drop from 2022 to 2024 generally.
- 2022 Mid 1st = 5486
- 2023 Mid 1st = 5804
- 2024 Mid 1st = 5072 414 KTC points or 8.2% value gain
- 2022 Mid 2nd = 3187
- 2023 Mid 2nd = 3405
- 2024 Mid 2nd = 2679 508 KTC points or 19.0% value gain
- 2022 Mid 3rd = 1656
- 2023 Mid 3rd = 1680
- 2024 Mid 3rd = 1322 334 KTC points or 25.3% value gain
The Value Proposition
It is fair to assume that over time the 2024 rookie prices will converge with the 2022 prices, absent draft class perception. There is currently a value gain of between 8.2% and 25.3% depending on the rookie pick’s round. If we were to trade four 2022 third-round rookie picks, we would theoretically get back five 2024 third-round rookie picks. This nets us a free third-round rookie pick every four years! While this may be a small amount, the more we can take advantage of this, the more value we can arbitrage from this no-risk premium. Looking across all three rounds, we will save 1,256 KTC points each year by rolling it back. That’s the equivalent of nearly a two-year out third-round rookie pick each year! Similarly, it is equivalent to a bump up from a third-round rookie pick to a second-round rookie pick two years out.
Joining With a Productive Struggle
This is one more reason that a productive struggle can be effective. Not only can we trade rookie picks back in years, but we can additionally trade away depth and older players. When doing so with players, we obtain a three-fold benefit.
The first is that we are selling that premium of a win-now player. If a 2022 pick is better than a 2024 pick, then by that same logic, a 2021 player is worth more than a 2022 equivalent pick. By selling him to another owner, we are pocketing future draft capital as a discount.
The second is that we have now created a temporary roster spot. We can now take a shot on a new player off of waivers we otherwise couldn’t have. While we will have to drop a player if we were to use that rookie pick down the road, we can keep churning as needed to build further draft capital and potentially trade up to a 1st-round rookie pick.
The third benefit is that we are avoiding the depreciation hit to an aging veteran and/or the injury risk associated with that player. This allows us to insulate that value that would otherwise be lost if we are not in a win-now position.
There is one additional opaque advantage we can obtain through this trade-back process. We can now take advantage of teams that need to sell future rookie picks to win now. Through this process, we know that these owners will be destroying dynasty value, in the long run, to compete now. This inherently makes their future rookie picks worth more when they fall out of the competitive window. It is not often that a strategy will provide this many free advantages by just being patient.
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