The NFL draft was broken. The research by Cade Massey and Richard Thaler was uncovering this. The draft inhibited parity instead of promoting it. Forget conventional wisdom. The value of a first-round pick increased instead of decreased from Nos. 1 to 32. They ran the numbers.
Massey and Thaler were on the phone one day when another revelation hit them.
“One of us said, ‘This explains the Cincinnati Bengals,’ ” Massey told me Sunday, conceding that some 20 years later he is not sure which said what they both realized:
The Bengals were proof of the “Loser’s Curse.”
And now?
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The Bengals rode back-to-back high picks Joe Burrow and Ja’Marr Chase to back-to-back elite seasons. Does that mean the Bengals have deciphered the draft?
“Just because it worked out with these two guys,” Massey said, “doesn’t mean these guys have this figured out.”
What do you see?
As we enter another NFL draft this week, we try to gauge how well the Bengals do and have done, look at everything from mock drafts to roster makeup to potential trades one way or the other, using our heads our hearts. We want them to be good and not lucky.
What if we opened ourselves to seeing this in a way never imagined when Massey and Thaler began this journey?
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Thaler and Massey are not crazy. They are behavioral economists, Thaler now a Nobel laureate at the University of Chicago, Massey now a practice professor at Penn. They see the power of numbers and how we use or ignore them.
They dubbed their study “The Loser's Curse: Decision Making and Market Efficiency in the National Football League Draft.” They found that the higher the first-round pick, the more likely the player would not perform to the level of the salary-cap hit. They measured “surplus value,” meaning “the player’s performance value – estimated from the labor market for NFL veterans – less his compensation.” Basically, it is a bang-for-your-buck thing.
Better might be to trade down for multiple picks. Better still might be getting a future pick in the deal at the typical one-round discount (trade a third-rounder now, for example, for a second-rounder next year). The worst decision you can make in the first round might be drafting No. 1 overall.
“Indeed, the irony of our results is that the supposed benefit bestowed on the worst team in the league, the right to pick first in the draft, is only a benefit if the team trades it away,” Massey and Thaler wrote. “The first pick in the draft is the loser’s curse.”
Was this Round World talk to a Flat Earth league? Or flat-out ridiculous? Teams gravitated more toward the draft-pick value chart Jimmy Johnson devised in the early 1990s, which assigned 3,000 points to the top pick and quickly and sharply lowered the rest.
The Bengals owned the No. 1 pick in 1994 and kept it. Who knew Dan “Big Daddy” Wilkinson would underperform? They traded up in 1995 to get the No. 1 again. Who knew Ki-Jana Carter would blow out his knee?
To say the Bengals might have been better off trading down goes beyond hindsight or these two players. It goes beyond the Bengals. It goes to any team that drafted first or high in the first, considering Massey and Thaler found surplus value did not match any pick until Round 2. It also goes to any owner or general manager who acted emotionally and shortsightedly instead of reasonably and analytically. Risk is fine, but when is it worth it?
You know how a team will leapfrog another to snag someone at a certain position? The chance of a player outperforming the next one drafted at that position is 52 percent, all through the draft – “slightly better than a coin-flip,” Massey and Thaler wrote.
“And I should say that first draft of the paper was 2005, I think, and was published quite a bit later because no one believed our results.” Thaler told “The Meb Faber Show” podcast the other day. “But I was involved in a project of updating this stuff and various football nerds have also done so, and everything we found in 2005 is still true, including that 52 percent number, maybe it’s 53 percent. I mean the basic story is true and with much, much better data.”
The final version published 10 years ago. Today, Massey said, surplus value probably matches the pick around the middle of the first round. Why? The rookie salary cap, instituted in 2011, lowers the risk for the top handful of picks, but the odds still favor trading them. Studies are showing which positions are worth the risk. Teams might be adapting, seeing New England’s success trading down.
What about the Bengals?
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Despite reaching two Super Bowls in the 1980s, Massey said, “the franchise was not exactly the gold standard” when it came to managing all those early draft picks earned in all those down years afterward.
So what changed?
If anything?
Instead of trading down, the Bengals picked Burrow No. 1 in 2020 and Chase No. 5 the next year. After a Super Bowl and another AFC title game, they are drafting late for the second straight year. I asked Massey if he has any message for Bengals fans.
“I would say thank your stars for your first pick having worked out,” he said. “They don’t always. l would praise your front office in investing all that early draft capital in high-value positions. A lot of other organizations don’t do that.”
If you are going to draft high, target impact positions. Massey says he probably needs to put even more weight now on drafting a quarterback early – and not just because of Burrow, who “super impressed” him when Joey B and LSU beat Massey’s alma mater, Texas.
Massey says analytics now point to quarterbacks (especially), wide receivers, edge rushers and maybe cornerbacks for high picks. Offensive and defensive tackles are up there, too, and Massey said Penei Sewell to block also would have been a great choice at No. 5 for the Bengals in 2021.
But let’s get back to his message about the Bengals.
“They don’t even have a proper scouting staff,” Massey said. “If you’re not going to invest in scouts, pick from the most valuable positions. I would say just because they hit on a quarterback or a receiver doesn’t mean they have some wizards pulling the levers. History says teams don’t outperform the market year in and year out; it is mostly chance.”
And now?
Agree or disagree, see them as lucky or good, cheap or efficient, this is a different way of looking at the Bengals’ futility and renaissance. Now with a franchise quarterback in line for a record contract, and a massive salary-cap hit, the onus is on the team to show its drafting acumen. Will the Bengal trade up? Trade down? Stay pat? Build depth?
It is something to consider at the gala that has become the NFL draft, a traveling show televised on multiple networks that longs for the spectacular early move. Massey, a co-host of the “Wharton Moneyball” podcast, calls it “great entertainment” and “cotton candy,” but this is about the postseason and not April.
Can the Bengals make the right moves to keep building around Burrow and put aside the Loser’s Curse days?
“Are the Bengals going to be able to continue to be good if they have to pay him market?” Thaler said on “The Meb Faber Show” podcast. “It’s going to be hard, right?”
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