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On the NBA: Discussing the Draft

The basketball commentariat wants to talk about the NBA Draft. With the various ideas that get bandied about in the late off season, this is the time to have this discussion. The NBA Draft is at its core a bizarre institution, and bears some close scrutiny. People have been arguing for ages over how much, if any, to weigh the draft lottery, but now some people are advocating getting rid of the draft altogether. That’s a radical change in the NBA, but perhaps a lot more reasonable than it seems at first glance.

The first question to ask is what the NBA draft is supposed to do? The stated goal is parity. Teams which have worse records are given a chance to lay claim to players first, players who are hopefully better than players selected later. The end goal here is for bad teams to have a chance to get better, and for good teams to have to make do with later picks. The NBA has been at this for a while, and since 1980, nine teams have won championships. It would take some real upsets to add a 10th team to that list this coming season, and that will likely be the case the following season as well. If parity is the goal, the draft doesn’t seem terribly effective.

The second question to ask is this: what does the draft actually do? It’s easy to measure institutions against their goals, but it can be harder to see what they’re actually accomplishing, perhaps unwittingly. The largest effect of the draft is to depress rookie salary. I have no interest in discovering whether or not this was an intentional effect. Whatever motivation there was is washed away in the tides of history. All that’s left now is a field where rookies get rookie scale, no matter how talented or in demand they are.

In free agency, players and teams have to weigh the supply and demand in the league, trying to find the best deal for both sides. Teams regularly save cap space, hoping to make a run at a player they think can help them. The draft is different, for some reason, and players are simply told to wait in line while the league figures out what order the owners make their choices. Taken on its own, this seems like a jarring change of tactic from a league very interested in showcasing its players. What does this depression of rookie wages do?

The first thing this does is allow teams that are already over the cap to sign their rookies. This means that teams well over the cap, like the Nets, Knicks, and Heat, can continue to sign their rookies, and continue to have an influx of new players to use as prospects or as trade assets. Lowered wages for rookies also moves that money to other players. The collective bargaining agreement (cba) specifies what percent of basketball related income (BRI) goes to the teams for salary cap purposes, and this cap determines the salary floor. There’s a set range for how much players will get paid, and there’s a set amount of players. It’s not exact, but the end result is that there’s a wiggly but more or less set amount of money players get as a whole. If the rookies aren’t making that money, that means other players are.

Here’s an assertion: rookies, in general, aren’t getting paid enough. How much will Andrew Wiggins make in his first year? About $5.5 million, almost certainly. That’s the maximum possible to hand him, and it’s not even league average pay. Second round picks regularly rake in less than a million dollars a year. That’s a lot in real world money, but it’s a complete pittance for an NBA player. Veterans willingly take minimum deals at the ends of their careers, but they’ve almost universally made much more in previous years, and are effectively paying for the privilege of being on the team they want. Wiggins will have neither that choice, nor that bank account.

So, if rookies are, indeed, worth more than they get paid, where’s that money going? An easy answer is to say “superstars,” but they’re generally getting the max salary, and that would be very unlikely to change in almost any circumstance. The top couple players at each position are worth anything you can pay them in the current cap structure. The players who would be paying for rookies would be the B and C tier players of the league. The good but not great players in the NBA, the solid role players, those are the players who have the most to lose from a wide array of NBA finance changes. Many have overlapping skill sets, and unlike superstars, can’t write their own checks. Who would you rather have on your team? Gerald Henderson or Andrew Wiggins? Henderson is making more this year than Wiggins will next year. Sure, Henderson has more experience and will probably contribute more right away, but Wiggins and his cohorts have the ability to become stars.

So what’s to be done? The simplest solution is probably the most elegant. Eliminate the draft altogether. We don’t know exactly what this would do to the league, but we have a solid idea. Even a “job fair” like Matt Moore has suggested would be fine. It’s still free agency of a sort and it would still be beholden to market forces and not strictures from on high. Just allow every eligible player to be pulled out of a pool by all thirty teams. If your team has no cap space, your team can’t sign anyone. Sorry, perennially capped out teams, you’ll have to start clearing space if you want a free influx of youth. Also, no more draft picks to throw at teams as trade filler.

So what would this do? This would make teams have to improve their risk versus reward calculus. Many teams already do this in free agency, but it would mean that there would be a tradeoff between salary cap and hope for the future. A team like the Kings, who are eternally flush with space, could simply offer giant contracts to young talent. Perhaps Wiggins would prefer to go to the Heat and win now? The only way he could do that is by taking a tiny contract, or the Heat dumping some of their stars. Admittedly, this would work even better in a hard cap situation, in which teams have to think even harder about the relative value of current talent vs future talent.

The benefit is that teams can then compete for players based on cap space, which any team can create, and based on the desires of the rookies themselves, who currently have no say in the situation. Cap space is the great equalizer of teams, and the more value is placed on it, the more even the playing field will be for small market teams. The downside is that the Anthonys Tolliver of the world will feel the pinch. If Wiggins makes $8-10m in his first year, that’s almost an entire role player who that team won’t hire. Instead, they’ll fill out the roster with someone cheap. If every team is playing rookies more, the role player talent will be in lower demand relative to the cap space available, and their salaries will dip somewhat. This could be avoided by giving players a larger part of the BRI and letting rookie salaries rise but everyone else stay the same, but that seems to be right off the table in general.

The NBA draft is fun. It’s spectacle and hope and excitement. Unfortunately, it’s also wage depression, arbitrariness and choosing employment locations for people who haven’t had a chance to make any decisions. So-called “parity” is almost always the goal of NBA changes. Parity isn’t what the league needs. The league needs salaries that make sense for their players, and a situation that rewards intelligence and competent management. This might not do that, but there’s good reason to believe it very well could.

 

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