Improving the NBA’s Competitive Balance by Fixing the NBA Draft

It is commonplace to complain about what is wrong with the NBA these days.  Whether discussing conference imbalance, the draft, or salary cap issues, many believe the NBA needs to improve its competitive balance.  Solutions to improving the NBA’s competitive balance often focus on the draft and tanking because they are at the heart of the league’s competitive balance problems.  Free agents leave or join teams for a variety of reasons, but the only real way teams have control over whether free agents join a team or leave a team (aside from the specific offer to the player) is by building an attractive or successful team.  And most fans would likely rather root for their team to win without fear they will lose out on draft position and a potential superstar.

Ending tanking involves answering two questions.  How do you discourage teams from losing?  How do you motivate teams to win?

The NFL has a standard reverse order draft which rewards the worst team with the first overall pick and the best team with the last pick of the first round.  In the NBA, this type of draft directly incentivizes tanking.  In contrast to the NFL, in which any one player (except the quarterback) is unlikely to have a large impact on a team’s outcome, tanking works in the NBA because drafting a superstar who will be one-fifth of a team’s starters can mean the difference between a bottom five record and making the playoffs or even contending for a championship.

The Draft Lottery attempts to lessen the success rate of tanking by giving all non-playoff teams a chance at the top three picks.  Unfortunately, it still assigns higher percentage chances to worse teams.  While tanking to be worst in the league does not guarantee that a team will get the first pick, it will still guarantee that a team gets the best chance of getting the first pick.  Some have proposed tinkering with the existing draft lottery to make it slightly better in the absence of a more drastic change, but let’s imagine a world in which drastic changes can occur and the system can actually be fixed.

With all of this in mind let’s take a look at some of the common proposals.

Betting on Failure

FiveThirtyEight’s staff attempted to crowdsource a solution to tanking.  They posted the full list of the more than 6,000 responses they received.  They also reviewed their favorite “weird” responses which are worth reading for the weirdest response alone (it involves fish and Adam Silver riding a bear).  Their winner proposed a version of another proposal, in which team draft picks are determined by the records of other teams.  Teams would participate in a pre-season “draft.”  The worst team from the prior year would get the first pick and the best team from the prior year would get the last pick.  Instead of selecting players, teams would select the team whose draft position they want, except that no team could select itself.  Essentially the proposal requires a team to bet on another team’s failure during the coming year.

For example, for the 2014-2015 season the Philadelphia 76ers finished with the worst record in the NBA.  In the 2015 pre-season draft, suppose they select the 2016 draft position of the Los Angeles Lakers.  If the Lakers finish with the fifth worst record in the NBA during the 2015-2016 season, the 76ers would get the fifth pick in the 2016 draft.  The benefit of the proposal is that a team could no longer control its own draft position, it would be reliant on the record of another team for where it drafted.

The problem with this proposal is that it would not change the basic premise of the current draft system.  Currently each team can improve its percentage chance of getting the top pick by losing (the more losses, the higher percentage of getting the first pick).  Under this proposal, each team could still improve its percentage chance of getting the top pick by losing simply by having the first opportunity to select the worst team in the NBA for its draft position the following year.

It is true that the proposal introduces more uncertainty into the draft because you are never sure how a team will finish (look at the 2015 Boston Celtics, predicted by many to be a lottery team, but made the playoffs).  However, there tends to be a general consensus around the league about which teams will be among the worst and which among the best.  Teams could (and likely would) still tank for the opportunity to select their draft position first.

Another drawback to the proposal is the potential for late season jockeying for position among the worst teams who will all own each other’s draft positions and can affect the draft order significantly just by sitting starters with questionable injuries (as seems to happen now).  This proposal would also throw a wrench into how teams currently trade picks with protections based on where the picks fall.  Teams could actually alter the draft positions of other teams, thereby affecting pick protections.  Not only does it not eliminate tanking, but it creates even more situations in which tanking can negatively affect other teams.

The Premier League Model

I mention this briefly because it always seems to come up in NBA discussions, even though it is not a likely or popular solution.  Similar to how the English Premier League deals with poor soccer teams, the NBA could relegate the four worst teams at the end of the season to the NBA D-League for the next season.  The next year, those teams could return to the NBA to be replaced by the next four worst teams.  Under this model, every team would try desperately to avoid being at the bottom of the league each year.  This model is extremely unlikely, as it is too much of a financial harm to teams since no one would attend D-League games and top players would not want to play against D-League competition.  Teams could also continue to tank to be the fifth worst team in the league in order to gain the first pick.

The Wheel System

Proposed by Celtics Assistant GM Mike Zarren, this system would eliminate the draft lottery and replace it with a system in which each team would pick in a specific first-round draft slot once every thirty years.  Each team cycles through the thirty draft slots each year in a predetermined order.  Teams would know exactly which draft slots they would have each year, eliminating the need to protect picks in trades.

The wheel’s format is designed to make sure that each team gets a chance at a top-six pick every five seasons and at least one top-twelve pick every four years.  One benefit of the wheel system is that it would eliminate tanking completely. There would no longer be any incentive for being a bad team because it would not improve a team’s draft position at all.

A major weakness of the system is that bad decisions can be entrenched for years, eliminating hope for fans.  Imagine that Team A is slotted to receive the number one pick in the 2007 NBA Draft and this wheel system is in place.  Team A lacks a playmaking big man and drafts Ohio State star Greg Oden.  Oden subsequently gets injured repeatedly and never plays a meaningful amount of games or minutes for Team A.  The year after taking Oden with the first pick, Team A gets the 30th pick.  The year after that it gets the 19th pick, followed by the 18th pick the year after.  In other words, Team A blew its one chance in four years at drafting a legitimate superstar.  Such a team can be mired at the bottom for years before getting another opportunity at drafting a star.

Now imagine a different scenario.  Team B is coming off a conference finals appearance and has one MVP-caliber player, a perennial All-Star, and a cast of solid role players.  It just so happens that under the wheel system Team B is slotted to receive the number two pick in the 2007 NBA Draft.  After Team A drafts Greg Oden, Team B drafts a young Kevin Durant out of Texas.  All of a sudden, a contender just added one of the best players in the NBA and has become a juggernaut.  Under the wheel system, good teams can unfairly monopolize talent.  A less significant problem with this system is the inability to implement it quickly.  The league would have to wait until all existing traded picks were used because pick protections will no longer exist under the wheel.

Zarren later reworked the wheel proposal, moving away from slotting teams into specific draft slots.  Instead, teams would cycle through buckets of six picks (for example, picks 25-30 in one season, picks 7-12 the next) over a five-year span.  Within each bucket of six picks, a lottery would determine which team gets which pick.  This fix decreases the chances that bad teams could get trapped at the bottom for several years without access to a good pick.  However, it still may not do enough to help bad teams, good teams could still monopolize talent, and it could not be implemented any time soon.

As Zach Lowe has said, “The wheel would eradicate tanking, but perhaps at the cost of making it harder for teams to rebuild without introducing any additional parity.”

Finishing Strong

Another proposal, let’s call it the Gold Proposal, would look at the records for the non-playoff teams after they were eliminated from the playoffs and give the team with the best record the first pick and the team with the worst record the fourteenth pick.  Alternatively, one could use the records of the non-playoff teams for the second half of the season (the last forty-one games).  The goal of this proposal is to ensure that each team competes hard for playoff spots through the end of the season, or continues to compete for wins even after getting eliminated from contention.

Essentially, either your team makes the playoffs or just misses but finishes with a strong second half of the season finish and is rewarded with a high pick.  This generates fan excitement over a longer period because fans are engaged with the second half of the season playoff push.  It also would eliminate the tension between fans rooting for their teams to win and rooting for their teams to get higher draft picks, aligning the two interests together.

The glaring fault of this system is that truly bad teams, which have no chance to accumulate a strong record in either half of the season, would be entrenched as cellar-dwellers, never being good enough to get high picks, and therefore never improving enough in the draft to get better and eventually get better picks or make the playoffs.  It also would merely shift the timeframe within which teams would tank from the entire season to the first half of the season. Borderline playoff teams knowing they would get eliminated in the first round but seeking a high draft pick could tank their way out of the playoff picture during the first half of the season, then have a fantastic second half of the season to earn a high pick.

The Entertaining As Hell Tournament (EAHT)

Originally concocted by Bill Simmons, this proposal would create a mini-tournament between the regular season and the playoffs (to make it feasible, Simmons advocates shortening the NBA season by several games).  The eighth place playoff seeds in each conference would be the prizes of a week-long, single elimination tournament between non-playoff teams.  The top two teams would clinch playoff spots and the top team would get an additional first round pick (Simmons suggests tenth).

Let’s be honest, fans would love the idea of a single elimination tournament for the final playoff spot.  The benefits of the tournament are that teams would be incentivized to have better rosters in the hopes of getting an extra pick and a playoff spot.  Fans would also be more interested and engaged in their team’s success during the season, knowing that the tournament still gives their team a chance to make the playoffs.  Everyone’s team has a chance at the postseason, playoff teams get some much needed rest time, and the fight for the last few playoff spots adds some drama to the season.

The tournament also has the added benefit of decreasing the likelihood of tanking further.  Teams that lose are still in the lottery, but teams that get to the finals of the tournament would have a 50% chance at a high draft pick, which is a better chance than they would get in the lottery for any given pick.

Unfortunately, the tournament would not eliminate tanking completely  There could still be a slight incentive to tank out of the seventh seed in order to get into the tournament or tank out of the tournament to get a lottery pick, and nothing about the tournament itself would change the way lottery picks are awarded.

A tweaked version of the tournament would have the fourteen lottery teams play a tournament for draft picks, with the winner getting the first pick, runner-up getting the second, and so on. The problem with this is that you then begin to entrench talent with a team that may already have been quite good (imagine the 2014-2015 Thunder, who just missed on the playoffs due to Durant’s injury, getting the first overall pick) and you prevent teams that are legitimately bad from ever improving themselves through the draft (because they would not be able to win the tournament).

By itself the EAHT is an entertaining idea, but not a complete solution to the problem of tanking.  The EAHT would need to be paired with a lottery system that eliminates or drastically reduces tanking and that would ensure better competitive balance by helping bad teams without assisting decent teams too much.

The Solution: Equal Weighting

Now that we have seen several commonly proposed solutions, how do we solve the remaining problems they have?  A solution to fix the draft must take into account several factors to improve competitive balance.  The new system should eliminate tanking while still enabling bad teams to get better through the draft without enabling already good teams to stockpile even more talent.

Simmons has also argued for equally weighting the lottery (as have many others), giving every team the same odds at getting picks.  The equal weighting system nearly eliminates tanking completely (teams could still tank from the eighth seed to a lottery pick, but with equal odds, there’s not a high percentage chance of getting a good pick).  However, while it is true that there is no incentive to bottom out like the 76ers have done the last few years, the worst teams could potentially miss out on top picks year after year, while decent teams repeatedly stock up on talent.  Random chance could result in swings in which bad teams continue to get bad picks, while better teams continue to get good picks.  Part of the philosophy behind every major sports draft is the concept of improving competitive balance: the goal is to bring up the bottom of the league and to make it harder for good teams to continue to dominate.  Equally weighting the lottery still poses a problem for that premise, even if it does drastically reduce tanking.

However, the problems with equal weighting can be dealt with (or at least mitigated) fairly easily with few tweaks.  So how should it be altered?  Assign equal weight to all lottery odds, so that each team would have an equal chance to receive any lottery pick, with two exceptions.  First, teams that finish in the bottom four of the league three years in a row are guaranteed a top five pick (but still receive only an equal chance at any of those top five picks as any other team).  Second, teams that get a top five pick two years in a row are ineligible to receive top five picks for the next two years.

This proposal eliminates the incentive to tank horribly in any given year because all teams have as much chance of getting the first pick as they do of getting the fourteenth pick.  Truly bad teams are prevented from repeatedly missing out on top picks year after year, because if they bottom out three years in a row, they are guaranteed to get a top five pick.  That guarantee is counterbalanced by the fact that they cannot assure themselves even a top three pick (since the chance of their getting any of the top five picks remains equal).  The average NBA coaching tenure is less than three years, so a coach or GM would need to stake his job security to a strategy he may not even get to see through to the end, all to potentially wind up with the fifth pick in what could be a weak draft three years from when the decision to tank is made.

The proposal also has the benefit that no team can stockpile elite draft talent year after year because any team that happens to get two consecutive top five picks cannot get one again for another two years.  Consider the Oklahoma City Thunder’s recent draft success, drafting Kevin Durant second overall in 2007, Russell Westbrook fourth overall in 2008, and James Harden third overall in 2009.  Even without the ability to draft Harden in 2009, the Thunder would have blossomed into a playoff caliber team with Durant and Westbrook developing together as evidenced by the team’s 50-win season in the 2009-2010 season.

It may still be a problem that awful teams might not get enough help if they miss on two consecutive fourth or fifth overall picks (or take them in weak drafts), but they can still continue to get high picks (e.g. sixth) each year in the equal weighted lottery.  Moreover, because tanking is no longer rewarded with a higher percentage chance of a good pick, teams should be attempting to build better overall teams.  That does not guarantee bad teams will become good, but it should decrease the probability and number of consistently bad teams.

This proposal seeks to reduce the incentives to tank while maximizing competitive balance at the same time, but it also has ancillary benefits.  First, it is easy to implement, requiring nothing other than altering the lottery odds.  Second, it can be implemented without altering the current system of trading picks, so teams would still be able to protect picks depending on where they fall.  Third, there would be no need for a delay to implement this proposal until after all trades of protected picks have been completed.” Since you could still have pick protections under that system, whereas under the Wheel you could not.  Fourth, it could still be combined with other proposals such as the EAHT to even further discourage tanking and incentivize winning.

Conclusion

No foolproof method exists to eliminate the possibility that a team will choose to perform poorly. Even with draft improvements, teams might choose to dump assets to clear cap space to attract multiple max-level (or close to max-level) players.  But there are ways to eliminate the incentives to bottom out or lose consistently, and there are ways to incentivize teams to play for playoff spots and keep fans interested.

All of these proposals, with various degrees of feasibility attempt to meet those goals.  But as long as there is a lottery in some form, there will be incentives to lose in some particular way — to be as bad as possible (the current system), or to tank out of the eighth seed and into the bottom of the lottery (under a system that treats all lottery teams equally).  What is needed is a system that motivates teams to win and discourages them from losing, but that also improves the league’s competitive balance, attempting to prevent bottom-feeders without creating an impenetrable upper-tier of teams stocked with talent.