This analysis also implies that there isn’t much intrinsic value in a draft pick above and beyond what a player gives you while he’s still on the rookie salary scale. Your player will be worth signing to a max extension only 5 percent of the time, and your expected profit on those extensions is only $11 million a pop. Having a 5 percent chance at an $11 million profit is worth just $550,000. By contrast, being too liberal about giving out max extensions to players like Irving can chip away at the value gained from them during their first several seasons.
The article can be found here: http://fivethirtyeight.com/features/whe ... -max/#fn-7