What's the consensus discount rate for future value vs. present value on draft picks?
I'm interested because I'd like to do a comparison of the league values for each of the QBs who changed teams this year. For instance, Alex Smith was traded for the #34 pick, which is valued at 560 points, in the current draft, plus a conditional pick in next year's draft. My memory is that it will be a second-round pick if the Chiefs do well and a third-round pick if they do poorly. So let's call that the #63 pick, (if we do well, we give up a late second-rounder, if we do poorly, we give up an early third-rounder). The #63 pick in the current draft is worth 276 points, but what discount should be assigned for losing a year? 20%? I don't really know. But let's say 20% That means Smith is valued at 781 points (560+(276*0.8)=781). 780, by the way, is the value of the #22 pick in the draft.
Carson Palmer was just traded for an exchange of picks plus a conditional, using the same math as above, worth a total of 17 to 20 points, depending if he plays 13 games.
Matt Flynn was traded for approximately 30 to 35 points.
I'm a huge Alex Smith fan. Like several other new Arrowhead Pride readers, I'm here because Alex Smith is here. I'm also supportive of the compensation given up for Smith. Flynn could have been had for 33 points, or Palmer for 18. I'd take Smith over either of them any day, even at 780 vs 33 or 18. Dorsey's main job right now, as I see it, is to convince some team out there that Geno Smith is worth 3000 points. If this doesn't happen before the draft, they should call Jacksonville's (and Arizona, Buffalo, Philadelphia, and Oakland) bluff and draft him anyway, pulling the trade after they draft him. If they can't get anywhere near 3000 points for him, then they should sit him for a year, and if everything is going well with Alex, they should re-shop him. If not, then they play him.
Anyway, what do you think?