Estimating the Trade Value for the #1 Overall Competition Pick

Today, the Royals got the #1 pick in the 1st ever Competition Lottery held under the new CBA. It gives the Royals a sandwich pick between the 1st and 2nd round. One interesting note about this pick is that it can be traded. It is the first time in MLB history that the trading of draft picks can happen. Trades can only occur during the season and a pick can only be traded once. The ability to trade the pick adds an interesting wrinkle for teams looking to improve themselves, but the pick has little real value.

In order to get an idea of the value of the pick, I looked at 2 studies done on draft pick value, one by Sky Andrecheck and the other by Rany Jazayerli. In Sky's article that ran back in 2009 at Baseball Analysts, he found the average career and 6-year WAR values for each draft pick. With the 32nd pick, the Royals would expect to get a player that produced ~2 WAR over his 6-year career (value extracted from this graph). In Rany's article at Baseball-Prospectus, he came up with the same conclusion, a player contributing 2 WARP over 6 years (I used his formula to get this number). Basically, if a teams gets one good season worth of production from a good reliever, they should be happy with the pick. At least the Royals got in the first group of picks. The 6-year value for a pick between the 2nd and 3rd rounds is around 0.7 WAR

I am not sure how teams will value the picks, but on the surface, they have little value. I could see them being used in just a few ways:

  • The pick could be traded to teams looking to dump salary. The Pirates may be inclined to trade their pick to Houston for Wandy Rodriguez. Houston is not in the playoff hunt and the Pirates get another starter to try to make the playoffs.
  • A 1/2 year rental could be in play. A team may need a closer, 4th starter or help in the outfield. Broxton, assuming the other team does care that he struggles in the 9th inning, would be an example on a player that may be moved in this type of trade.
  • The main use I see is bundling the pick as part of a larger trade. The teams may be close and the pick could just even out the trade.

It is exciting for the Royals to actually win something, even if it is a draft pick. The pick may seem like it has added value since it can be trades. Fans may need to temper their expectations of the true value of the pick and not expect much return if it is traded.

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