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Draft pick valuation and whether or not the Lightning overpaid in Barclay Goodrow trade

What’s the real difference between first and third round picks?

NHL: FEB 20 Sharks at Devils Photo by Rich Graessle/Icon Sportswire via Getty Images

The Lightning made one last surprise move at the trade deadline acquiring Barclay Goodrow and a third round pick from the Sharks in exchange for a first-round pick and Anthony Greco. The Lightning had traded for Greco just a few days earlier in exchange for Danick Martel in a swap of top-six AHL forwards.

While Greco is a valuable player in the AHL, he likely won’t play many NHL games over the rest of his career and so his inclusion here is more about clearing a contract spot as the Lightning were already at the maximum of 50. After the trade, the Lightning sent Mitchell Stephens back to Syracuse, which from an AHL perspective, should more than make up for the loss of Martel from the lineup.

From an NHL perspective, this trade amounts to the Lightning acquiring Goodrow in exchange for the difference in value between a first- and a third-round pick. And more specifically, the difference between a late first round pick and mid third round pick as the Lightning will likely (hopefully) pick in the late 20s or even early 30s while the third-round pick, which the Sharks originally acquired from Philadelphia, will likely land somewhere in the mid to late 70s.

NHL draft pick valuation

The first question then becomes how do we evaluate the difference in value between these two picks. In draft pick valuation, different analysts have primarily used two different approaches.

The first, introduced by Eric Tulsky in 2013, is to base the value of draft picks on their market value. By compiling all trades involving only draft picks, he established base market values between picks in different rounds. In 2017, Geo here at Raw Charge used a similar approach with updated data over the intervening years from when Tulsky did his original study.

The other approach is based on measuring the typical performance of players drafted in each slot. While the previous approach is based on market value, this approach focuses on the actual value in terms of NHL production. Michael Schuckers work in 2011 is still the primary version of this type of analysis.

Before we get into what we can learn from each of these approaches about the Goodrow trade, we should acknowledge that both approaches have significant weaknesses.

A purely market based approach only tells you what other teams have paid in the past. It doesn’t tell you anything about whether paying that price is a good decision. Just because someone else was willing to pay $100 for toothpick doesn’t mean I should also be willing to do that.

On the flip side, a purely value based approach only tells you the value you’re likely to get from that pick. It doesn’t tell you anything about whether that value has any relation to the market and how your competition perceives value. Further, the methodology used by Schuckers relied on data from 1988 to 1997 and used games played as the measure of player performance. These are both problems. NHL teams have almost certainly gotten better at drafting in the last 20 years and games played is not an ideal way of measuring how good a player is.

So in both common approaches to measuring draft pick value, we have weaknesses. Relying on a market to tell you how much to pay without any concept of true value is dangerous. But the method we have of measuring true value relies on outdated data and as a result, probably undervalues later round picks where NHL teams have likely become more adept at identifying talent in the time since the data set that’s included in the study.

With a clear understanding of the limits of our approaches, let’s look at the gaps between a pick around 28 and a pick around 76 as a reasonable approximation of what we think this deal might end up being.

According to a market based approach, the value of that difference is approximately the same as a pick in the early 30s, which is a bottom end first round pick or high second round pick. According to a true value based approach, the value is approximately the same as a pick in the early 90s, which is a late third rounder or early fourth rounder.

If an unscrupulous analyst wanted to cherry pick a number here to support an argument in either direction as to how the Lightning front office did in this trade, they could do it. If you want to scream from the mountain tops that the Lightning overpaid, the market based approach will support your argument. If you want to beat the drum of picks at the bottom end of the first round being worth far less than their perceived value, the true value approach will support your argument.

But if you want to give an honest analysis of this deal, you have to consider the weaknesses of both approaches and conclude that the value likely lies somewhere in the middle. The midpoint between the two valuations would be in the early 60s, which is a late second rounder or early third rounder. Without a more justifiable way of blending the two models, looking at the midpoint is the simplest way to split the difference.

If the trade had been announced as the Lightning trading their second round pick, which will likely be in the range we’re discussing in terms of a blended value, would the reaction to this trade be different? Likely, yes. Trading first round picks leads to visceral responses as it always feels as if the team is trading away a future star. But the Lightning didn’t just trade a first round pick in this deal. The traded the difference between a late first and a mid-third, which is a different thing.

How you feel about the values of those picks in relation to each other should determine your evaluation of this trade. Personally, I think the idea that the actual difference is somewhere around a late second round pick is reasonable. And with that assessment, I think the trade is defensible.

So, was it a good trade?

All that said, if the question is: would I trade a late second-round pick for Barclay Goodrow if I was in the Lightning front office? The answer is still likely, “No.” The Lightning are so deep at forward and I don’t see Goodrow as a significant upgrade on the internal options. Mitchell Stephens has performed better both in terms of Wins Above Replacement (WAR) and play driving. While Goodrow has played many more minutes, I’m not sure there’s much evidence to support that the Lightning are any better today than they were yesterday.

The complicating factor here is that the Lightning face lots of salary cap uncertainty this summer. Goodrow being locked in for another year at $925k holds more value to the Lightning than to other teams because the Bolts are more in need of quality players on affordable contracts to fill in around their high paid stars.

In one sense, the cost to trade for Goodrow might be fine in a vacuum. He’s a good defensive forward on a great contract. But if we step outside the vacuum and look specifically at the Lightning’s situation, the picture gets more murky. Yes, they need good players on good contracts. But I’m not sure Goodrow is enough of an improvement on other affordable internal options to justify this move. Even if they didn’t technically overpay, it seems to me they spent unnecessarily to upgrade at a position where they already had at least one player performing at the same level as Goodrow or even slightly above.