5% of Zion: Evaluating the potential for probability-split trades in professional sports

Abstract

In this paper, I propose and evaluate a novel extension of the analytics revolution in professional sports: probability-split trades. Under this plan, teams could trade probability shares in draft assets held. For example, a team like the New York Knicks could trade their first and second round picks for a 5% chance of winning the 1st overall pick. In the last two decades, the analytics revolution has transformed professional sports. General managers, coaches, and even players leverage the underlying math to gain any sort of competitive advantage, while major sports leagues view the analytics revolution with passive glee, as their potential viewer segments continue to expand. This paper is an extension of that revolution, outlining the details, feasibility, and potential benefits of a novel plan with the potential to increase exchange efficiency, boost revenue and sustain league growth in the NFL and NBA.