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Friday, August 21, 2009
The value of a first round pick
According to Erik Manning, this is the WAR production (in dollar terms of $4.4MM per win) of the first round picks before they hit free agency:
• Picks 1 though 5 on average gave their teams $32M of production.
• Picks 6 through 10, $22.4M
• 11-15, $17.6M
• 16-20, $18.9M
• 21-30 $6.6M
So, the top 5 picks averaged around 7 WAR each over the 6 years of MLB service. Some obviously got 0, and others presumably approached 30 WAR or so. The average is 7. I’m presuming their MLB salaries over that time period (baseball-inflation adjusted) was probably around $10MM. That leaves about $22MM of surplus value, minus whatever the signing bonus was.
As you can see, the top draft picks are highly valuable assets. When you get down to the bottom 10 picks of the first round, you get $6.6MM of production minus say $2MM of salary and another 1-2MM of signing bonus, and you have about $3MM of surplus value.
The top 30 picks have about $520MM of production value pre-free agency, and it probably cost the teams $220MM in salaries and signing bonuses. That’s $300MM of surplus value for the 30 first round picks, or $10MM each.
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