Revising the Draft Lottery

May 15, 2015

By Stephen Shea, Ph.D. (@SteveShea33)

Clearly, there are issues with the current draft lottery system.  In October 2014, the NBA held a vote to revise the system.  The revisions would have shifted the odds in the lottery so that the worst teams had less of a chance of landing the highest picks.  The vote failed.  It only received 17 votes and needed 23.  What’s interesting here is that 17 teams voted for a new system.

After the motion failed, NBA Commissioner Adam Silver said, “I think, in essence, the owners were concerned about unintended consequences.  I think we all recognize we need to find the right balance between creating the appropriate incentives on one hand for teams to, of course, win, and on the other hand allowing for appropriate rebuilding and the draft to work as it should in which the worst performing teams get the highest picks in the draft.”

Finding the correct balance is exactly the concern.  Before we can consider a new proposal that might find that balance, we have to understand all of the issues of the current system.

Issues with the Draft Lottery

  1. The current system incentivizes prolonged tanking and rewards repeated incompetence.  Teams can get a lot of very high picks by being bad for a very long time.  In some cases, teams are bad due to persistent ineptitude.  While it’s nice to try and restore competitive balance, the idea of too many free meals is unsavory.  Other teams (such as Philadelphia) weighed the costs and benefits of a several season tanking strategy and decided on tanking.
  2. Teams can quickly “dumb luck” their way to a title contender.  The Orlando Magic got back-to-back #1 picks in ‘92 and ’93.  The first #1 was Shaq.  The second was Chris Webber, who they traded for Anfernee Hardaway.  It may not be from tanking or repeated incompetence.  A team that doesn’t make the playoffs in consecutive seasons can land back-to-back #1 picks.  It doesn’t take the best general manager to build a quality team around Shaq and Penny.  Teams should have to make a few great decisions before they rise to the top of the NBA.  It shouldn’t be handed to them.
  3. The current system incentivizes opportunistic tanking.  Sometimes circumstances lead an otherwise good team to a season where they will be predictably mediocre.  Couple that with the fact that teams know when certain stars are coming in the draft.  Teams knew LeBron was entering the 2003 draft before the 2002-03 NBA season started.  The same held when Tim Duncan was drafted in 1997.  So, when the Spurs lost their star David Robinson at the beginning of the 1996-97 season, there was plenty of reason for them not to win (but I don’t know that’s what they were trying to do).  Indiana could have gone down the same path this season after they lost Paul George in the offseason.  Maybe they would have if the next LeBron or Duncan were entering the draft.
  4. The current system can reward an anomalously bad season.   Suppose that the Spurs weren’t gunning for Duncan after the Robinson injury.  This was a team that finished 62-20 the previous season (1995-96).  They would have been back in the playoffs and a possible title contender the 1997-98 without Duncan.  Why should that Spurs team get the next superstar?  Is that restoring competitive balance? 
  5. The current system does not guarantee the truly bad teams a high pick.  Part of the concern in renovating the draft lottery is that reducing the odds of a high pick for the worst teams will hurt competitive balance in the league.  For a small market team that might have trouble drawing free agents, the draft is an important part of roster construction.  But the current system does not guarantee that small market teams will land a top 3 pick (where the premium talent usually resides).  Larger markets can drop into the lottery for a season and leapfrog a small market team for the top pick.

A Possible Solution

My proposed solution has 2 parts.

  1. Draft lottery odds should be determined by a team’s record in the previous 3 seasons (not just the previous 1 season).  The odds associated with the lottery can remain the same.  Simply rank the teams (playoff teams included) based on their 3 previous seasons combined.  The bottom 14 teams are in the lottery.
  2. No team can have a top 3 pick more than once every 3 drafts.  If a team would be in the lottery and has received a top 3 pick in the previous 2 drafts, simply redraw if they would be awarded a top 3 draft position.

By relying on 3 years of data, we have fixed problems 3 and 4 above.  Teams can no longer dip into good odds in the lottery from 1 bad season in the midst of other very good seasons.  Even if they dropped out of the playoffs that season, two previously good seasons would likely result if very low odds of landing a top pick.

By only allowing a team at most 1 top 3 pick every 3 years, there is far less incentive for prolonged tanking.  When Philadelphia began it’s current strategy, they saw the chance of landing multiple very high picks as a major positive.

Only allowing at most 1 top 3 pick every 3 years also limits the rewards for repeated incompetence.  That takes care of issue number 1.

In this system, no team can get back-to-back #1 picks like Orlando got (or Cleveland received more recently).  Teams can’t even get back-to-back top 3 picks.  There will be at least 2 drafts between top 3 picks for any team (unless they trade for another team’s pick).

Finally, there is a benefit to the small market team that might be trying like crazy to improve, but is at a disadvantage in free agency.  Since teams cannot get more than 1 top 3 pick in a 3-year cycle, it’s likely that each year several lottery teams will have their balls removed from top 3 consideration.  If we otherwise keep the number of balls in the lottery draw the same, it increases the odds for the other teams.  A team that has been truly bad for several seasons, but not gotten a high pick in the previous 2 will be looking at a very good chance at a top 3.  Every 3 years, 9 different teams will have a top 3 pick.  This helps with issue #5.

You might be wondering why I’m allowing playoff teams to be in the lottery if their 3-season record ranked them there.  Suppose a team has been bad for 2 consecutive seasons but has not received a top 3 pick in either of those two drafts.  Suppose further that this team has the opportunity to improve significantly.  We don’t want this team tanking that third season because they’ll have an exceptional chance at a very high pick.  So, we allow them to improve and still get a shot at the lottery.  With 2 bad prior seasons, they should have a good chance at a high pick even if they do succeed that third year.  This makes tanking the third season far less appealing.

The proposal is simple.  In my opinion, it addresses all of the major issues surrounding the draft lottery.

 

 

 

 

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3 Comments

  1. Mitch

     /  May 19, 2015

    A possible flaw might be that a good team who loses its lone star in free agency, etc. (Cavs after the decision/Rockets this year?) could in fact be terrible in the following year(s) but not have a legitimate shot at the top of the lottery. Thoughts?

    Reply
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