How to Find a Quarterback Part 1: Drafting the most important position in sports

“If you challenge conventional wisdom, you will find ways to do things much better than they are currently done.” — Bill James

In a copycat league, no one wants to be first. A modern-day NFL GM is one bad draft pick, a faulty free agent signing, or a lopsided trade from being replaced. That’s why Josh Rosen is so incredible. Rather, that’s why what happened to Josh Rosen, is so incredible.

In 2018, Josh Rosen was selected 10th overall in the NFL draft, the fourth quarterback taken off the board. He would go one to play in 14 games, complete 55% of his passes, throw 14 interceptions to only 11 touchdowns, and lead the Cardinals to a dismal 3–13 record. A year later he would be on a different team, and a year after that he would be on yet another team (and then another). In 2019, only a year after selecting Rosen, the Cardinals used the first overall draft pick to take another quarterback, Kyler Murray. The next day they would ship off Josh Rosen to the Miami Dolphins for a 2nd and a future fifth-round pick.

Josh Rosen is the reason why another quarterback in his draft class, Sam Darnold, might be on the move this offseason. By trading away Rosen, and drafting his replacement after only a year in the system, the Cardinals granted the rest of the league “permission” to follow their lead.

Trading away Rosen and drafting Kyler seems so obvious in hindsight, but it was not as clear-cut at the time. Rosen was a quarterback on a cheap deal, one of the most valuable assets in the league. However, Rosen’s poor play, and the intrigue around Kyler as a prospect made the decision easy for the Cardinals. Since that time, the demand for cheap, talented quarterbacks has exploded. Trading quarterbacks isn’t taboo anymore either.

In this article, we will explore how the demand for young, cheap quarterbacks has soared. We will look specifically at the draft, and how teams have allocated value to each position, and how that relates to the quarterback. In future articles, we will examine other markets, like free agency, in order to determine the ideal allocation of resources in building a football team.

The Data

There are basically three markets in which teams compete for talent; the draft, free agency, and the trade market. This article will focus solely on the draft.

In the draft, teams use a scored system that was originally implemented by Jimmy Johnson of the Dallas Cowboys in the late 1980s and early 1990s. The system assigns a value to each pick that allows teams to better evaluate trades up and down the draft board. In effect, the values are the currency that teams use to compete in the draft ‘auction’. Below is a table of the first-round pick values for reference.

It’s not the most scientific way to look at the draft, and many people have tried to introduce better metrics. However, the actual trades teams make tend to correlate the most with the Jimmy Johnson trade values. It would seem that these values are the closest approximation to what teams actually use.

The Analysis

Using draft pick values allows us to aggregate, cut, slice, and all the other fun things we can usually do with data. For instance, below is a chart of the total draft pick values for each team in the upcoming 2021 NFL draft (as of March 3rd, 2021).

It mostly follows in order of the overall draft order, with a few exceptions. First, and most notably, the top-three teams (Jax, NYJ, and MIA) own this draft. Together, they account for almost one-quarter of the total value of the entire draft. That’s because not only do they occupy the first three picks, they also each own an additional pick in the first round. This affects the competitive dynamics of the draft in a meaningful way. For example, Philadelphia theoretically has the ability to out-leverage Cincinnati, even though they pick after them in the first round. The same cannot be said for Atlanta, whose draft capital pales in comparison to Miami, even though they are drafting one spot behind them in the first two rounds.

We can also look at the data historically. Looking only at the first round, we can aggregate the total draft value used to select a player at each position. Below is a chart of the total draft values given to each position between 2015 and 2020, adjusted by the average number of starters by position.

Quarterback is clearly the most valuable position based on draft capital. The next closest position, defensive end, represents only 45% of the draft value given to quarterbacks in the last six years. Not only is the gap between quarterback and every other position already immense, but it is also growing over time. The total draft value used to select quarterbacks over the past eight years has increased by 52% annually on average.

Looking forward to the 2021 draft, it is highly likely that the draft capital given to quarterbacks will exceed the previous high from 2018 with five quarterbacks likely to be selected in the top-20. The quarterback position is clearly the gold-standard. Which begs the question, at what point in the draft are you using the price of gold to pay for silver?

The Comparison

The quarterback position as a whole is more valuable, scarce, and appreciates at a higher and more predictable rate than any other position. Over the previous six drafts, there were, on average, 11 more defensive ends and 22 more linebackers (data includes OLB as LB) than quarterbacks selected in each draft.

Despite this, the league placed a significantly higher total value on quarterbacks than on defensive ends, as noted in the value charts in the ‘analysis’ section above.

Teams often use a lot of draft capital on defensive ends. In five of the last six drafts, a defensive end has been taken first, second, or third overall. However, as indicated in the chart below, the total draft capital used on the position in the first round has mostly decreased over time.

The quarterback position is not the end all be all for an NFL team to be successful. However, it is one of the most valuable assets in the game. Even the second most valuable position (as dictated by draft capital), defensive end, is less valuable, less scarce, and appreciates at a slower rate over time.

The Outcomes

The draft has a few built-in efficiencies for smart teams to exploit. First, rookie contracts are artificially suppressed and represent no more than 3.4% of the salary cap. This is the most obvious, and most important, efficiency in the NFL. Productive quarterbacks on rookie contracts have given many GMs the ability to build juggernaut-like teams by having a quarterback on a rookie contract. Interestingly, teams with a rookie, or an otherwise cheap, quarterback tend to spend more on running backs and defensive line positions. (More on that in Part 2 of this series.)

The second and third efficiencies of the draft are created by other teams’ inefficient allocation of resources. To put it more plainly, it is an inefficient use of resources to draft another position besides quarterback when there are still “starting-worthy” quarterbacks available. Drafting any other position is using the price of gold to pay for silver. A team can take advantage of this by waiting to draft a quarterback without having to trade-up or wait until it is more affordable to trade-up. Every team that doesn’t draft a starter-worthy quarterback is essentially giving a discount to teams that will.

The third efficiency relates to opportunity cost. Teams that want to trade into a higher position in the draft will most often give up a premium in draft capital in order to do so. Since 2016, there have been eight trades where a team moved into one of the top-10 draft spots. Seven of the teams that moved back in those trades received a premium in draft value. The average draft value gained by moving back was 427, the equivalent value of the 15th pick in the second round. So for argument’s sake, teams that were willing to trade a top-10 pick received an equivalent package equal to the pick they traded away plus an additional mid 2nd round pick as a premium from the team they traded with. As the competition for rookie quarterbacks increases, teams that trade back can expect to receive much higher premiums.

The Take

The quarterback is referred to as the most important position in sports for a reason. Many teams are willing to pay a lot of money for the opportunity to designate a player as their franchise quarterback. The draft represents an opportunity to employ these players at a discount. Yet teams are still willingly selecting players from other positions before all of the top quarterback candidates are selected.

Teams that have a draft pick where a starting quarterback could be taken, should either select a quarterback or trade back. Any other decision is an inefficient allocation of resources.