Quote:The issue regards the greater value of the earlier compared to the later future pick, hence the increased value of the earlier pick. The same reasoning applies in deciding on the value of two competing offers. Regardless of whose pick it is, the various links provided earlier and others indicate that a 2014 4th is roughly equivalent to a 2015 3rd in valuation.

This isn't money on an open market. Unless you can find someone that will trade a higher pick next year for a pick this year the value is nothing more than an arbitrary number.

 

If no one is willing to give you return on a dollar there is no time value. Your dollar today will equal a dollar tomorrow.

 

The assumption being made as to how time value relates to draft picks is that picks are traded on an open market where anyone who wants to can trade their current pick for a future pick a round higher and that all trades are made at this rate. If that were the case, then yes, the time value model would apply. You would have a set discount rate to calculate the future value.

 

But it isn't an open market and there isn't a guarantee that anyone is willing to give you anything of greater value for your current pick much less the assumed value of a round higher pick the next year. Therefore there is no applicable discount rate to calculate a time value so you can't say a pick this year is worth a pick a round higher next year. That is a faulty assumption.

 

Draft picks only act like money when they are exchanged like money and the rates at which they are exchanged vary widely. Nice attempt by those people to try and connect the two but their premise is flawed.

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