NBA Draft

I just pulled this from the e-mail conversation on ESPN between Bill Simmons and Malcolm Gladwell:
Gladwell: "The consistent failure of underdogs in professional sports to even try something new suggests, to me, that there is something fundamentally wrong with the incentive structure of the leagues. I think, for example, that the idea of ranking draft picks in reverse order of finish -- as much as it sounds "fair" -- does untold damage to the game. You simply cannot have a system that rewards anyone, ever, for losing. Economists worry about this all the time, when they talk about "moral hazard." Moral hazard is the idea that if you insure someone against risk, you will make risky behavior more likely. So if you always bail out the banks when they take absurd risks and do stupid things, they are going to keep on taking absurd risks and doing stupid things. Bailouts create moral hazard. Moral hazard is also why your health insurance has a co-pay. If your insurer paid for everything, the theory goes, it would encourage you to go to the doctor when you really don't need to. No economist in his right mind would ever endorse the football and basketball drafts the way they are structured now. They are a moral hazard in spades. If you give me a lottery pick for being an atrocious GM, where's my incentive not to be an atrocious GM?


I think the only way around the problem is to put every team in the lottery. Every team's name gets put in a hat, and you get assigned your draft position by chance. Does that, theoretically, make it harder for weaker teams to improve their chances against stronger teams? I don't think so. First of all, the principal engine of parity in the modern era is the salary cap, not the draft. And in any case, if the reverse-order draft is such a great leveler, then why are the same teams at the bottom of both the NFL and NBA year after year? The current system perpetuates the myth that access to top picks is the primary determinant of competitiveness in pro sports, and that's simply not true. Success is a function of the quality of the organization.


Another more radical idea is that you do a full lottery only every second year, or three out of four years, and in the off year make draft position in order of finish. Best teams pick first. How fun would that be? Every meaningless end-of-season game now becomes instantly meaningful. If you were the Minnesota Timberwolves, you would realize that unless you did something really drastic -- like hire some random sports writer as your GM, or bring in Pitino to design a special-press squad -- you would never climb out of the cellar again. And in a year with a can't-miss No. 1 pick, having the best record in the regular season becomes hugely important. What do you think?"


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I don' t know about pushing it to only having the lottery every other year, but full randomness in the lottery is actually pretty interesting.  Because I think he is right on the fact that the salary cap is the real determinant of success. The Lakers are always going to spend a lot, and they are always on top. The Knicks are starting to use their money wisely, and I like the way the future looks. The Spurs haven't really bothered with the draft since Tim Duncan, and they are consistently a top level team. While on the other side, Toronto and Milwaukee, Minnesota, Memphis, the Clippers and Golden State don't spend money, rely on the draft or spend their money unwisely and are consistently disappointing. I like how the future looks for Memphis and Toronto, but do we really expect them to be able to resign Gay, Mayo, or Bosh?


If teams aren't willing to spend money on 3 key guys needed to win, why reward them for losing the most? Maybe a better idea than either that Gladwell proposes would be to rank the lottery chances in order not reverse order. Give the teams who are on the fringe of making the playoffs like Indiana, Charlotte and Phoenix the best chance at the top picks, so teams won't routinely be stuck at the bottom with talent who don't want to be there. Give all the teams incentive to win, and make the top picks worth more because it could really mean the difference between making the playoffs and not.