Draft position vs. average four-year win shares
The maximum length of a rookie contract is four years, meaning that we should focus exclusively on those first four years when analyzing whether a player is a draft bust or a draft steal.
Therefore, I looked at the first four years of win shares data for a player, as provided by Basketball-Reference.com. Win shares are an advanced basketball metric calculated so that one win share is exactly equal to one win provided by that player to his team's cause.
It's the combination of offensive win shares and defensive win shares, a full breakdown of which can be found on this page, called "Calculating Win Shares."
Starting with the year 1982—an arbitrary date because I haven't had time to go back any further—I looked at each player drafted into the league and tracked their draft position and the amount of win shares they produced in their first four seasons in the league, called four-year win shares.
Please note that players drafted in 2009 or later have not been included because four years have not yet elapsed between their draft date and the present day.
After I had data for all 2,378 players drafted from 1982-2008, I took the average number of four-year win shares for each draft position and plotted them on a scatterplot (which you can see in the embedded picture, with draft position along the x-axis and four-year win shares along the y-axis).
Using a best-fit logistical regression, I found the following formula:
Four-year win shares = -3.978 * ln (draft position) + 19.204.
For the statistically inclined out there, that equation has a coefficient of determination (r^2) of 0.83448.
Using this formula, we can plug in a number for draft position and have the formula show how many four-year win shares a player drafted there should be expected to produce.
The difference between expected four-year win shares and actual four-year win shares determines how much of a steal or bust a player was. If the difference is positive, the player exceeded expectations by that much and was a bit of a steal. If the difference is negative, the player failed to live up to the expectations and was a bit of a bust.
Because we're only looking at the last decade, players must have been drafted between 2003 and 2008 to be eligible for this article. Hasheem Thabeet, Jonny Flynn, Terrence Williams, Wesley Johnson, Cole Aldrich and others will have to wait a year or two for eligibility.