The Problem: The draft order is roughly the inverse of the order that teams finished in the year before. The worse a team is, the better their draft pick is the following year. Due to (founded) fears that this system would incentivize losing, the NBA instituted a draft lottery, using combinations of ping pong balls to determine the draft order. 14 teams -- every team that did not make the playoffs -- are placed in the lottery. Under the current system, the team that finished with the worst record has a 25% chance of earning the first pick -- 25% of the winning ping pong ball combinations. The next-worst team has a 19.9% chance, followed by 15.6% and a steep decline all the way down to 0.5% for the best non-playoff team.
The lottery is used to determine the first three draft slots. The 11 teams not in the top three draft in the inverse order of their finish the season before. This lottery was supposed to disincentivize teams from losing on purpose to improve their draft slot. It didn’t. The incentive to pick high in the draft -- and the fear of being stuck in mediocrity, too good to get a high draft pick but not good enough to contend for a championship -- is so strong that teams have intentionally gutted their teams (this is known as tanking) in order to be bad enough to “earn” better lottery odds.
The most striking example of this came in Philadelphia, where the Sixers traded away their veteran players and intentionally lost games for four straight seasons in order to secure high draft picks. The problem for the NBA is that this strategy works. The Sixers ended up with two superstar players and have a future far brighter than they would have had if they had remained mired in mediocrity. The NBA, of course, does not like when its teams lose on purpose. So the league has investigated ways to disincentivize tanking, leading to a change passed by team owners before this season.
The NBA’s Solution: Starting in 2019, the three worst teams will have an equal 14% chance to win the first overall draft pick. The #1 pick odds will then go down smoothly -- by between 1% and 2% -- down to 0.5% for the best non-playoff team. Four teams will now be selected in the lottery instead of five. The goal of this change is obvious. The team with the top lottery odds will see their chances of picking first go down from 25% to 14% and in the top three from 64.3% to 40.1%. The teams helped most by the change are the ones in the middle of the lottery. The team in the eighth slot, for example, is more than twice as likely to get the top pick and 260% more likely to secure a top four pick.
This change is an improvement, but it won’t come close to eradicating tanking. There will still be bad teams (winning, of course, is a zero-sum game). And because the lottery odds still favor the worst teams, those bad teams will still want to lose games in order to improve their lottery standing. In some cases, the tanking may even be worse. Teams that would otherwise be fighting for a playoff spot, for example, may glimpse the better odds given to mid-tier lottery teams and rest a player here and there. That will remain the case as long as the lottery order is the inverse of the season standings.
Better solutions: There have been all kinds of proposals about how to replace the draft lottery. Some, arguing that the draft itself is flawed and that draft prospects should be able to pick their teams, believe that the draft itself should be eliminated and players should go straight to free agency. Others want to give the best teams the best picks in order to fully incentivize winning or to totally randomize the order by giving each team an equal chance to secure every draft pick.
The most innovative, albeit flawed, proposal is the wheel. Initially proposed by Mike Zarren, Assistant General Manager of the Boston Celtics, the draft order would be set for 30 years. Each team would cycle through every pick in the draft, and each six year set of picks would have roughly the same overall value. The team awarded the first pick, for example, would then receive the 30th, 19th, 18th, 7th, and 6th picks in the next five years. The team with the second pick would be looking at a run of the 29th, 20th, and 17th picks in the following three years. This ensures that no team would have a run of top picks followed by a bunch of lower picks.
This proposal has major flaws. A bad team could be faced with a run of three straight late first round picks, potentially setting that team up for a long stretch of hopeless play and robbing the fandom of any hope. On the other hand, a very good team could have the chance to add a generational talent if it had the fortune of getting a top pick at the perfect time. And because the draft order would be set years in advance, elite prospects could time their entries to the NBA draft in order to guarantee selection by a team in a better situation. This could add to the league’s competitive imbalance.
But the wheel system has its virtues. It would eliminate tanking, simplify future draft pick trading, and make the league more competitive. Zarren found that the best solution could be to marry the wheel proposal and the current lottery system.
The Wheel Lottery: When his initial wheel proposal was met with pushback, Zarren submitted two additional systems. The first would reduce the 30 year cycle to 10 years, and the other would push it down to five years. The following proposal would incorporate parts of each plan and reduce the original 30 year wheel proposal made by Mike Zarren to a six year cycle.
Rather than assigning each team every draft pick, the teams would be sorted randomly into six different groups of five teams. Those five teams would cycle through six draft areas in the six year cycle. Those areas would be each group of five picks: 1-5; 6-10; 11-15; 16-20; 21-25; 26-30. In any given year, the top five picks would be composed of one of the six groups of five teams.
Like with Zarren’s original proposal, the groupings would be determined in advance so that teams would know roughly where they would be drafting for the next six years. Each team would be guaranteed a top-five pick every six years and a top-10 pick every three years. A lottery would determine where exactly in these ranges each team would draft. The lottery would be similar to the current one in that it would be based on performance the previous season. The worst team in the five team grouping would have the best chance to get the top pick within that grouping, and the odds would gradually decline to the team with the best record in the grouping.
This could give hope to bad teams without being enough to incentivize losing. Bad teams would have an increased chance of winning the first pick every six years with the knowledge that they would be guaranteed a top-five pick even if they were to sign a bunch of veteran players and improve. Great teams, meanwhile, would have a smaller chance to win the top pick, thus increasing the level of competition in the league. This proposal would provide a safety net for teams, allowing them to strive to be as good as possible and removing the fear of being stuck in the middle. The range of potential outcomes would be small enough to keep teams from tanking. There would no longer be an incentive to miss the playoffs, because every team would be a “lottery” team.