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NFL Draft Matching Market Issues Could Invite Auction Alternative

https://www.wsj.com/articles/SB10001424052748704133804575198154038855396

 

The NFL Draft was first created and held in 1936, and for awhile was effective at spreading out top college prospects across the NFL teams. However, as the rules and styles of the NFL and college football diverged, the use of the draft format has caused many issues. The college game spreads the offense more, encouraging quarterbacks to run much more than the NFL, making it harder to tell which players at all positions will be the best at the next level. The worst teams are getting players that don’t help their team as much as it seems, while paying them too high of a salary. The consequences of drafting the first few picks in the draft leads to player holdouts, and plenty of players that fail to succeed in the NFL, leading to many consecutive bad years for franchises. There are many propositions for ways to fix these problems with the draft, to improve situations for players, teams, and fans. One suggestion is a more “free-market” system like in European soccer, but this leads to very costly transfer fees. The league’s commissioner, Roger Goodell, believes that limiting rookie salaries would help many teams out, but this is quite unfavorable to players. What many economists believe is a good solution is a capped auction style draft, with the worst teams allotted the highest amount of money to bid.

 

This dilemma over the NFL draft relates to class in two ways: the current draft being a complex matching market, and the proposition of an auction style draft. As the drafting market is presently, the players and agents act as the sellers, while the franchises are the buyers. Franchises place sort of hypothetical valuations on each draft prospect based on what their team needs, and attributes the teams desire that the player possesses. The draft is ordered based on worst to best teams of the previous season, but if one team believes that another team higher in the draft order will take a player that they’ve placed a high valuation on, that’s when trades and draft pick negotiations happen. Ultimately, this allows all the teams to have perfect matchings based on their valuations of players available, and interests in future draft picks. The proposal of an auction-style draft is a bit different. In this ascending bid, there is no dominant strategy to bid your true values for players, especially when you have to allocate your bidding budget to accompany many different players. In this format, any team could get any player they want, as long as they’re willing to spend much more money on that player than everyone else, sacrificing the money they could bid on other players as well. Other teams could benefit from spreading their money around to different useful parts, and possibly focus on snagging bargains on mid-talent players. And not only does this format pose a beneficial style for teams and players, but would be more exciting for fans who wouldn’t have to wait for so long between draft picks.

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