Fixing the NBA Draft

The NBA recently voted to change the way it decides the order teams draft college players. If you aren’t familiar with basketball, the current system determines the order by assigning different probabilities of drafting in each position to each of the 30 teams based on the standings. For example, under the old system, the team that finished last had a 25% chance of receiving the top overall pick, while the 14th worst had only a 0.5% chance to land in the top spot (playoff teams are not part of the lottery – they just pick in reverse order of standings).

This system is distinct from other sports like the NFL, which deterministically sets the draft order as the reverse of the standings. The worst team always picks first in football. The reason the NBA does not follow the NFL is to discourage “tanking,” which is when one team attempts to lose on purpose to get the number one pick and improve their team for the future. A new proposal that was just approved by a majority of owners punishes tankers even more, reducing the odds of the worst team getting the first pick to 14% and giving the exact same 14% chance to the second and third worst teams.

At first, it might seem like the lottery system accomplishes its goal of reducing the incentives to tank. The benefit of coming in last place is obviously higher if you have a 100% chance of getting the first pick rather than a 25% chance or a 14% chance.

But there’s something wrong with this logic. The decision to tank or not does not depend on the overall benefit of coming in last, but rather its relative benefit compared to any other strategy. In other words, the only reason a team wouldn’t tank is if its benefit of playing hard every game outweighs the benefit of losing and moving down the standings. It seems clear to me that under any system that gives any draft advantage to the worst teams will always encourage tanking.

There is simply no benefit at all to being the 24th or 23rd best team in the NBA. If your team cannot realistically compete for a title, you are always better off being dead last than somewhere in the middle. With the new system, that calculation changes so that you become indifferent between any of the bottom 3 spots, but does anybody really care much if a team only has to tank to 28th instead of 30th? They are still better off losing as many games as possible.

This flaw in any lottery system has led to even more radical proposals that decouple draft order and standings completely. The most famous of these is “the wheel,” which would replace the lottery entirely with a draft order set years in advance. Each team would pick in each of the 30 draft slots exactly once every 30 years. And they would know exactly when. No randomness. No relation to the standings at all.

The virtue of this system is that it removes all incentive to tank. If your draft order is unconnected to your record, you might as well do your best to win. This feature has given it a large following of NBA fans hoping for more competition in the league and it has been seriously considered as an alternative to the lottery.

I think it’s a terrible idea. By removing the link between record and draft order, the wheel solves the tanking problem. But it deepens another major issue with the NBA: how do bad teams get better? And what happens when a team like the Warriors ends up with the first pick in the draft? Imagine the current Warriors roster plus Markelle Fultz and you can immediately see why the wheel can end up producing some incredibly undesirable results.

In the article I linked above, Zach Lowe acknowledges both of these issues, but writes them off by arguing that they would be a part of any draft system that offers a chance for good teams to get good picks. And he’s absolutely right. Any measure that discourages tanking will necessarily make it harder for bad teams to get better. And any attempt to give some advantage to bad teams will always encourage tanking. There is no perfect system.

My proposal is a bit different. Rather than try to fix the draft, fix the system that makes tanking one of the few ways for a team in a bad situation to improve. Tanking is not the the root of the problem. The issue is that teams like the Warriors can have 4 superstar players on the roster, making it nearly impossible for teams with less talent to compete. What’s the point of trying to win when you know you won’t? Even a tiny advantage in the draft is enough for any team to see some value in tanking when their probability of beating the teams at the top falls close to zero.

We can solve that problem in a much easier way. Remove the cap on player salaries. Let LeBron and Durant make $50 million a year. The market would make it impossible for the Warriors to have multiple top 5 players. Somebody would offer enough that one of them would want to leave. And let bad teams tank. Get rid of the lottery. The worst team gets the first pick. Would tanking increase? Possibly, but so would parity in the league. Nobody watches bad teams anyway. At least this system would give them a path to being good again.

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