NFL Teams are Paying a Premium for Pedigree
The data shows that NFL teams often pay significantly more for former first round picks in Free Agency and trades than comparable players taken later in the Draft
Introduction & Methodology
A trend that I have seen extensively discussed on NFL Analytics Twitter/X is how teams seem to heavily weigh draft status when acquiring veteran players. This means that former high draft picks, especially first round picks, tend to receive larger Free Agent deals/extensions and fetch more in trade compensation than statistically comparable players taken later in the draft. As such, I sought to quantify just how much a premium teams need to pay to acquire former first round picks.
To do so, I evaluated the contracts that a handful of former-first round picks received this offseason either via Free Agency or extension. I did my best to come up with what I believed to be the “True APY” through taking the lower AAV between the full deal or what Spotrac listed as the “Potential Out”. I then used Pro Football Reference’s Weighted Approximate Value (wAV) to find comparable non-first rounders to receive deals this off-season and did the same with those contracts. In all instances, the matched pairs played the same position and I did my best to find appropriate comps based on factors such as age and injury history as well. I then compared the True APYs of all the deals to Over the Cap’s 2023 valuation of the player. When receiving a new contract, most players receive more than what they are truly worth, so I then subtracted the premium received by the non-first rounder from that of the first round matched pair to get a crude representation of the percent premium that first round picks tend to receive. This then served as the basis for further analysis.
As a note, I excluded Quarterbacks such as Baker Mayfield, from this analysis as that is a unique market. I also excluded players for whom there were no good comps, such as Linebackers Patrick Queen and Devin White - who were both younger and/or more accomplished than other FA LBs (though I do think White benefitted from being a former top-10 pick). Additionally, while there have not been any such deals this off-season so far, I believe that this type of analysis would not be applicable to players that are truly in the top-5ish of their position like Minnesota Vikings’ WR Justin Jefferson, who will reset the market when he signs a new deal.
Perhaps most importantly, I do not think teams are using OTC valuation as the primary driver for how much they should pay a player. Rather, they come to their own conclusions on how much each player is worth. Still, I think it serves a valuable data-driven reference point to help quantify the first round premium.
Analysis
Across the board, the numbers show that it takes a significant premium to sign former first round picks relative to comparable players. Again, this is certainly a crude comparison that first and foremost does not take into account film study, which is the most important part of talent evaluation. Furthermore, not all of these deals are apples to apples as some were extensions and others FA contracts. Lastly, I do not have access to important non-public information like medical records that could materially impact the kind of contract a player receives. Still, I think there are important takeaways from these figures.
Cleveland Browns’ WR Jerry Jeudy was acquired from the Denver Broncos for a couple late-round picks and then signed to a 3-year $58M deal, with $41M guaranteed. However, Jeudy was already due nearly $13M this season as a result of his fifth year option, so Cleveland essentially tacked on two years and $28M to his contract. That $14M APY represents a 133% premium on his OTC valuation of $6M. Jeudy has not lived up to his draft billing thus far, and the Browns could have signed the similarly productive Gabriel Davis for slightly less money and without giving up trade compensation. The 133% figure in the table is likely an exaggeration since I think OTC overstates Davis’ value significantly, as the two have put up comparable numbers, Using the OTC valuation of ~$3M for picks 135 and 202 that the Browns gave up for Jeudy and adding it to the money paid out in the extension, we can estimate that Jeudy will cost the Browns ~$15.5M/yr. This is roughly a premium of 19% relative to the cost of signing Davis to a $13M/yr contract. The Browns, of course, are hoping for additional growth from Jeudy but are paying him way more than he has proven to be worth thus far. Advanced metrics are kind to Jeudy, and the Browns Front Office is one of the smartest in the league, but this is a clear gamble that I’m not sure Cleveland would have taken on a lesser pedigreed player.
Elsewhere in the WR market, the Tennessee Titans gave Calvin Ridley the largest deal at the position thus far in the 2024 off-season. His 4-year $92M deal is likely closer to a 2-year $48M contract with options to extend, but per the methodology we’ll treat the pact as having a $23M APY. That figure is a 57% premium compared to his OTC value. This premium is more than what Indianapolis Colts’ WR Michael Pittman, a former 2nd round pick, received in his extension. Granted, hitting the open market versus negotiating while tagged gave Ridley more leverage than Pittman, but it is hard to argue that the two should have received the same APY when Pittman is three years younger while being similarly productive. Although the 14% difference in premium listed in the table may not account for the differing market dynamics between the two negotiations, it also doesn’t take into account that Pittman is potentially an ascendant player given his age and the low quality of QB play throughout his career thus far while Ridley has likely hit his peak. Much like the Browns with Jeudy, it seems clear that the Titans ended up paying a premium for Ridley’s pedigree.
Moving to Tight End, the Seattle Seahawks’ Noah Fant and Houston Texans’ Dalton Schultz received similar contracts. Although Schultz received $1.8M/yr more than Fant, his value was $3M higher last season according to OTC. Furthermore, after starting his career slowly, Schultz has been the more statistically productive player over the past three seasons. Fant is a year younger than Schultz and is the more athletic player, so the 48% premium listed in the table is likely a bit high, but it does seem like Schultz is getting punished for his draft position. For example, a similar situation occurred last year where despite being three years older and having a worse 2022 season, the Carolina Panthers’ TE Hayden Hurst received more than double ($13M) the guarantees as Schultz ($6M) in Free Agency.
At Defensive Tackle, Christian Wilkins is another example of an ex-1st round pick getting paid better than a comparable player, in this case, former 3rd rounder Justin Madubuike. Much like Ridley, Wilkins benefitted from hitting the open market versus having to negotiate off the Franchise Tag. Still, Madubuike was considered the slightly superior player of the two by most analysts and is two years younger. The fact that Wilkins was able to so significantly top what Madubuike made is another sign that his pedigree came into play, even though that 23% premium listed in the table likely includes the effects of being a UFA. The deals that the Jets gave to Javon Kinlaw and the 49ers to Jordan Elliot is as close to an apples to apples comparison there is. In this instance, Kinlaw received a 9% higher premium over his OTC value than the former 3rd round pick in Elliot, despite similar career production thus far.
Amongst Free Agent Linebackers, Kenneth Murray, Jordyn Brooks, and Willie Gay have all had statistically comparable careers. Murray and Brooks were 1st round picks, whereas Gay was a 2nd rounder. Murray and Brooks were both valued slightly higher than Gay this past season, and received 2.7x and 3.2x the salary Gay did respectively. While Gay may have benefitted from playing on a strong Kansas City defense, the numbers do not show that Murray and Brooks are ~3x the player Gay is. This is evidence that on smaller deals, the premium required to sign former 1st round picks is perhaps even higher than on larger deals like what Jeudy, Ridley, and Wilkins received. In fairness, Gay has the chance to earn $2m in incentives this year and hit the market again after next season, thus potentially cutting into the premiums listed in the table, but it still seems clear that Murray and Brooks received deals in part based on their pre-draft evaluations/pedigree as opposed to NFL production.
Among the most egregious contracts given out in Free Agency was the one the Jacksonville Jaguars gave to Safety Darnell Savage, a 2019 1st Round pick. Despite one of the better Safety markets in recent memory, Jacksonville gave Savage a deal at a 158% premium over his 2023 OTC valuation. The Buffalo Bills’ Taylor Rapp, a former 2nd round pick, is just one example of a statistically comparable player to sign a significantly lower priced deal - in this case for half the AAV and less than 1/3rd of the guarantees. Players like Kam Curl, Jordan Whitehead, DeShon Elliott, and Alohi Gilman are all comparably or higher rated players than Savage but who signed less lucrative deals in Free Agency. All four were Day 3 selections entering the NFL, and it is hard to argue that is a coincidence.
The cases of Edge Rusher Clelin Ferrell and Linebacker Devin Bush provide evidence that teams might be punishing perceived draft busts that are deemed not to have untapped potential. Ferrell was widely considered a reach after getting taken 4th overall by the then Oakland Raiders in 2019. Since leaving the Raiders, he has settled for 1-year low money deals. Last year, he started all 17 games for the NFC Champion 49ers and had a statistically respectable season. Still, he got about half as much as the Buffalo Bills’ A.J. Epenesa despite having a higher AV 2023 season (8 vs. 4) and a similar OTC valuation all while being just a year older. Similarly, Bush was the 10th overall pick in 2019 and landed on Sports Illustrated’s biggest bust list (along with Ferrell). His contract with the Brown reflects that of a player that may not even make the final 53 man roster, and his salary is below his OTC valuation which is rare for an Unrestricted Free Agent. Ferrell and Bush’s contracts are clear signs that they are not receiving the same kind of grace that most other 1st round picks get throughout their career, leaving open the possibility that the perception of them as major busts has something to do with it.
While this analysis focused on the 2024 off-season, there are countless cases of 1st round picks receiving significant premiums in previous years too. Hurst getting more than Schultz is one prominent example from last off-season. Another was when the Tennessee Titans gave $10M guaranteed at signing to Tackle Andre Dillard in order to replace Dennis Daley, who signed with the Arizona Cardinals for just $750K in guarantees. While the Titans were justified in hoping to upgrade over Daley, Dillard was a disappointment with the Philadelphia Eagles where he only started in 9 games throughout his tenure there and none in his final season. Daley did not play much in Arizona this year, but Dillard arguably ended up being a downgrade for the Titans and was released after just one season with the team. It is understandable for the Titans to have been intrigued by Dillard’s potential, after all he was a backup to two of the best Tackles in the NFL in Lane Johnson and Jordan Mailata in 2022, but it came at a significant price relative to comparable players.
Lastly, I think there is some evidence that teams also take into account prospect perception dating back to High School. While Wilkins, Ridley, and Jeudy are three of the better players on this list and all play premium positions, it is notable that they were all 5-Star recruits in HS that attended some of the biggest and best college programs in the country. All three players also won National Championships in College - Wilkins at Clemson (2016, 18) and Jeudy (2017) and Ridley (2015, 17) at Alabama. These accolades certainly bolster the pedigree of all three players, and perhaps contributed to the perception of their future potential compared to less heralded players that have performed similarly in the NFL. Making conclusions off three players is extremely premature, but it could be interesting to see if such a trend holds for other former top-HS recruits.
Conclusions and Takeaways
Based on data from this off-season, I think a solid but crude estimate is that former 1st round picks come at a 10-20% premium in terms of total compensation (i.e. including cost of the trade when applicable) relative to comparable players taken later in the Draft. That number seems like it could be higher for short-term and/or low-money deals, with the notable exception of contracts given to perceived draft busts. Teams are of course hoping to pay for future production rather than past performance, so it is natural to be willing to pay a little more for pedigreed players that may not have quite lived up to their pre-draft billing. However, it is difficult to think of many historical cases that would, as an example, justify the Browns paying ~20% more for Jerry Jeudy than Gabriel Davis. This is perhaps a sign that teams are paying too much of a premium for players with 1st round pedigree.
Bias almost certainly plays into this phenomenon, and in fairness it is not limited to Pro Football. Graduates of top universities tend to make more right out of school than their peers at lower ranked schools, and the perception of these students as being “smarter” even if it is not the case almost certainly plays into that phenomenon. There is a reason that many people who worked at brand name firms like McKinsey or Goldman Sachs prominently advertise the fact on their LinkedIn profiles. But perhaps the biggest takeaway from Moneyball, in both sports and business, is that there is an advantage to be had by working to look beyond one’s biases.
I also think there is a football explanation for why ex-1st rounders tend to sign for such a premium. Teams, on average, tend to employ far more college scouts than pro scouts and for good reason. The Draft, justifiably so, is considered the key to team building. As such, given the discrepancy in size between the College and Pro scouting departments, teams are potentially putting too much weight on their pre-draft work and analysis, relative to their evaluation of players’ tape and stats in the NFL. If I were to guess, this is more strongly the case for smaller deals on which teams likely spend less time deliberating, which might help explain the seemingly greater premium on those kinds of contracts - the Savage pact being a prominent example. That is not to say pre-Draft analysis has no place in a current evaluation, particularly since teams might be asking their FA signings to play in a different scheme or role than they did on their previous club, but that there could be a more optimal weighting of the two. Teams do seem to be increasing the size of their pro departments, which I think is a good step in the right direction towards correcting this imbalance.
Teams that avoid paying this premium can build an advantage in a league where cap space is finite. A team that signs Curl over Savage or Gay over Murray/Brooks can save millions of dollars in cap space with little-to-no on-field impact, and re-allocate that money to re-signing core players or pouncing on stars that somehow become available. They can also take advantage of the willingness to pay for such players by dealing away former 1st rounders they do not plan to bring back and get valuable Draft compensation in return. The Broncos, for example, likely could have gotten back at least a Day 2 pick for Jeudy had they dealt him last off-season or even at the trade deadline.
The Philadelphia Eagles are a team that I believe took advantage of this dynamic. This year, they signed Free Agent Edge Rusher Bryce Huff, formerly of the Jets, to a 3-year $51M deal - an APY of $17M. Huff, who entered the league as an Undrafted Free Agent, is 26 years old and projected to take on an even greater role in Philly. The Eagles then dealt Edge Rusher Haason Reddick, a 2017 1st Round pick, to the Jets who likely eyed him as a Huff replacement. Reddick wants a new contract and is likely to command an extension for more than $20M/yr despite entering his Age 30 season, meaning he’s likely close to his peak as a player. As such, the Eagles were able to save money, get younger, and add modest draft compensation (a 2026 3rd round pick that could turn into a 2nd rounder) by putting aside pedigree, all while ending up with a comparable, if not potentially superior, player.
Similarly, I thought the Titans did well to acquire Cornerback L’Jarius Sneed from the Kansas City Chiefs for just a 2025 3rd Round pick. Sneed, a 4th Round Pick in 2020, was widely believed to be the best CB on the market this year, and while the Chiefs gave him the Franchise Tag, it was clear that they were open to dealing him. While full details are not public, the Titans then signed him to a 4-year $76M deal with $55M guaranteed. Top CBs typically fetch more in trade compensation than a future 3rd rounder, and at $19M/yr (with the true APY potentially lower), he received less guaranteed money than four former 1st round picks, despite the significant increase in the cap this year. His guaranteed money only slightly eclipsed that of former 2nd round pick Jaylon Johnson, who also signed an extension this off-season.
Sneed reportedly played last season on an injured knee, which likely depressed his market. Still, getting the top player on the market at a premium position at 27% over his OTC value (assuming the reduction in “True APY” and future draft pick compensation cancel out) is good business when looking at other deals given out by teams this off-season.
Quantifying exactly how much a player got due to prior Draft status is impossible, but the data shows that pedigree is almost certainly playing a role in determining compensation. Teams that are continually able to make moves like the Eagles did with replacing Reddick with Huff and a mid-round draft pick should be able to create an advantage. In a league where small advantages slowly add up, it could help make a difference in on-field team performance and win percentage. The point of this analysis is not to say that teams should not consider their pre-Draft analysis when acquiring veterans, but rather that there is a healthy balance to be struck between that and present day evaluation. Similarly, I do not think that teams should avoid acquiring former 1st round picks, but rather, they should be open to less pedigreed but comparable players if they come at a substantially lower price.