For months now the NBA has pretty much publicly admitted to what everyone has known for more than 15 years… The NBA has a tanking problem. Tanking, for those of you who aren’t big NBA fans, is when a team intentionally blows up it’s season to better it’s chances at receiving a high draft pick. Some teams do it during the middle of the season when all seems lost (see the 2013 Lakers), and other teams do it as part of a strategic rebuilding process for a collection of years (see the 76ers). In the NBA, getting a top end lottery pick, has the greatest potential return of any professional sport. Players like LeBron, Anthony Davis, and Durant can turn around a franchise in an instant, while other players like John Wall or even a Gordon Heyward, can provide the foundation for a future title contender. The ROI on tanking, if successful, can be massive. While Bill Simmon’s article The Ultimate Crapshoot partially disagrees with the ROI on draft picks, it does highlight how much potential value is there in the top few picks (if you make the right pick). It is this high perceived ROI that makes tanking such a prevalent practice in the NBA. However, neither fans, nor sponsors, nor the league as a whole wants to see an uncompetitive product put out on the floor. People want to believe that teams and management are at least wanting to win (if not trying to).
The NBA Draft Lottery system was supposed to slightly discourage tanking by not simply rewarding the worst record with the highest draft pick, but instead by creating a Lottery System that rewards the worst team with the “best chance” for receiving the highest draft pick. Unfortunately, this odds based system simply doesn’t offer enough risk to prevent teams from “tanking” in order to receive a better pick. This issue of tanking in relation to the NBA Draft Lottery System has come under a lot of scrutiny recently, with the NBA announcing that it will replace this system in the very near future. No specific solution has yet been concluded to be a favorite, including the very interesting NBA Draft Wheel, mainly because so many teams have different short and long term agendas that would be effected by a change in the system. However, what if we didn’t change the lottery system, rather we just layered a balance on top of it.
The purpose of rewarding the worst team with a high draft pick is to help in their rebuilding, right? To help them become better by giving them the opportunity to draft a top quality player. However, in reality, as Bill Simmon’s made clear in his piece, the art of drafting is not an exact science (see Darko, Kwame, or even Oden). This is because it is simply not easy to project a player’s transition from college/europe to the pros. In reality, unlike in the NFL, in the NBA teams are built through smart free agency moves and trades combined with very smart cap management. Cap management, could actually be argued to be the most critical component, because without cap flexibility you simply can’t make the trades or free agency moves necessary to rebuild your team (see the Knicks, Nets, Lakers). So why don’t we find a way to layer on a cap reward system for finishing closer to the playoffs, to encourage winning. This would allow both players and owners to be rewarded financially for trying to win. The players because there would be more money free to pay them, and the owners because it would grant them “tax-free” flexibility to build their teams. An potential option might look like this.
For the 14 teams that don’t make the NBA Playoffs the draft lottery system would remain in place, unchanged. With the odds remaining the same for each position. However, on top of that would be a reverse balanced cap reward system based on final record. So see below:
Final Position | Draft Lottery % of First Pick | Cap Reward
- 30th | 25% | $0 Cap reward
- 29th | 19.9% | $1mm tax free cap exemption
- 28th | 15.6% | $2mm tax free cap exemption
- 27th | 11.9% | $2.5mm tax free cap exemption
- 26th | 8.8% | $2.7 mm
- 25th | 6.3% | $2.9
- 24th | 4.3% | $3.4
- 23rd | 2.8% | $3.7
- 22nd | 1.7% | $4.0
- 21st | 1.1% | $4.5
- 20th | .8% | $5.0
- 19th | .7% | $5.5
- 18th | .6% | $6.0
- 17th | .5% | $6.5
Now I’m no cap expert, but with the NBA Salary cap sitting at about $63mm, doesn’t that seem like a massive advantage? It’s the potential of having roughly 10% MORE to spend than other teams, without having to pay into the luxury tax for that contract? It could help you resign current players or have the cap space to attract critical free agents. The cap exemption could not be used to simply lower your tax burden, and would have to be applied to the signing of a new contract or player acquisition. In an age where the best teams are winning with smart role player additions, this is a huge opportunity to strengthen your team. You could even, potentially, make this counter balance to tanking stronger but putting cap penalties on the last place team (that would definitely encourage owners to put pressure on management to put a winning team on the floor). Imagine if these cap exceptions were also tradable commodities? That alone could make the NBA non-playoff race almost as interesting as the playoff race.
Now, I am hardly smart enough to think that my actual numerical example above is in anyway a real solution, but it is the framework for an idea that makes a ton of sense. It would definitely require a cap expert like Dork Elvis (Daryl Morey) or Larry Coon to workout the exact details, but it seems like the perfect solution to counter balance the lottery. Teams would constantly have to worry, is the “chance” at the number one pick worth the risk of missing out on increased cap flexibility? I think it’d be a very tough call at every turn. Teams, at least I believe, would have no choice but to play to win. If anything, the only potential downside would be fringe playoff teams tanking their way, just barely, out of the playoffs. They would really have the most to potentially gain. However, I’m sure smarter men than me could think about ways of preventing that (possibly with bigger financial rewards for making the playoffs). Anyway, I may not be a genius but I think this idea may be truly unique compared to everything else that I’ve heard or read. But hey, what do I know? I’m just some idiot with a blog. Oh wait, that’s exactly how Simmons got his start, and now he’s an NBA expert!