Sunday, April 27, 2008

Browns, Usury, and the Credit Crunch

I logged on to check the draft progress around the 18th pick in round 4. Little did I expect that by then we had already made two picks.

Some of the picks sound kind of interesting. But thats not my thing. I don't know squat about college players. But I do know a little bit about finance. So I think I am somewhat qualified to point out that Phil Savage is addicted to credit, and he needs an intervention.

Savage is addicted to borrowing from the future to meet the needs of today. How fitting that its going on while our country is going through a credit crunch because of overuse and abuse of credit in the recent past.

The thing is, taking out loans and borrowing isn't necessarily bad. Borrowing is a good thing when you expect the payoff to exceed your finance charges. So taking out a loan to buy a truck for your job that will make you more than the cost of the truck is a good idea. But financing isn't always good. Taking out a home equity loan to buy a big screen tv is probably always a bad idea.

Applying this comparison to football is a bit tricky because the difference isn't whether you're using your picks for a truck or a tv. At the end of the day, draft picks are only worth anything to the extent that they get you players. There is no clear line between a trade to get great value and gambling away the future for immediate needs.

Think of it this way: We trade next year's 3rd rounder to get a 4th rounder this year to use on a guy who should've gone in the 2nd round. So next year, what do we do when a 1st rounder falls into the 3rd round and we don't have a pick left?

The fact is, EVERY year good players drop to later rounds. So using a pick from next year to get value this year just means you won't be able to get (or will have to overpay for) value next year.

Its possible that Phil felt better about getting late-round value this year compared to next year because we've focused more attention on the later rounds (without having to be distracted by scouting 1st rounders). But how good can a sixth round wide receiver really be (Marques Colston excepted)?

The only thing that really matters is the quality of the players Phil brings in. If his picks this year result in starters at linebacker, tight end, and wide receiver, then his trades may be worth it. But lets hope that Phil gets over his addiction to using future picks.


Ace Davis said...

You take out a loan to buy a house because you don't have the full price up front. You get to live in the house right away. For this, you end up paying more than the original price. This is normal and not inherently unhealthy.

The Browns get the benefit of these players right away, while the team is ascending. A one-round premium a year later is not too much to pay, if these players make the team and the Browns get to the playoffs (making those surrendered picks even less valuable).

Dwayne Rudd said...

I can see the argument in doing it while you're ascending, with the idea that once you are "there" you start trading down.

My problem is if its something that is done EVERY year (which seems like a developing pattern (if you call two years a pattern)). If its done every year, then you're always overpaying when you could've just sat on your original picks.

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