The NBA Should Impose an Auction-Style Draft

The current draft lottery system must go because it incentivizes tanking.

In light of the news that the Philadelphia 76ers were fighting potential changes to the lottery system , I gave my take on tanking in the NBA last week, including why rules rewarding losing need to be reformed. An auction-style draft that promotes smart spending, however, would be an attractive alternative.

It’s admirable that Adam Silver is taking steps to eliminate the “perception” that teams are tanking. However, I’m concerned with the new “11 percent” lottery idea that seems to be looming as the front-runner to replace the current lottery system. This would allow each of the bottom-four teams to have at least an 11 percent chance of winning the lottery while increasing the chances of the lottery teams with better records.

Currently, the team with the worst record has a 25 percent chance of winning the lottery and a 65 percent chance of getting a top-3 pick, though the worst team has only gotten the top pick in three of the 21 years since the current weighted system was put into effect in 1994 (PHI-‘96, CLE-‘03, ORL-‘04).

If Silver really hopes to remove tanking from the NBA — and not just put a Band-Aid on a cut that clearly needs stitches — an auction draft should be more seriously considered. Changing the odds will do nothing to remove the incentive for front offices to lose, and it’s extremely possible this would merely result in more mid-season tanking. Since the newly proposed system would basically spread out the odds more evenly among non-playoff teams, it could result in teams tanking out of the No. 8 seed in exchange for a lottery ticket. For instance, though it’s highly unlikely any reform to the lottery system would occur right away, the newly proposed system might encourage teams to avoid the Eastern Conference’s No. 8 seed for the foreseeable future.

For 2014-15, I predict that Cleveland will finish first, followed by , in no particular order, Miami, Washington, Toronto, Chicago, Atlanta and Charlotte. Assuming the Cleveland-Minnesota deal goes through and the Cavs land Love, the incentive for a team to purposefully remove itself from a potential first-round meeting with LeBron and company and instead play the lottery would immediately be amplified. In short, the newly proposed 11 percent idea would not stop teams from tanking; it would provide new reasons to do so.

Implementing an auction-style draft is the best way to effectively eliminate tanking in the NBA. But before going any further, I’d like to add that I don’t believe it would be fair for the following changes to be instituted until 2020, so that the value of previously traded draft picks remains the same.

My 2020 vision for the auction draft is as follows:

Each team would be afforded a budget of $1,000 “draft dollars,” which it would be allowed to use in biddings. To begin the draft, the team with the worst record would announce its opening bid on the projected top pick of the draft or pass to the team whose record was the next worst (teams would nominate players to be bid on in reverse order of the standings). In the event that multiple teams were willing to spend their entire budget on one player, the team with greater actual cap space, i.e., the more fiscally responsible team, would be awarded the player. The players would receive regular compensation based on the draft position at which they were selected, so teams couldn’t drive the price of the players down by continually passing in the first round. The second round would abandon the auction style, and teams would have the option to forgo their pick, trade it, or select a player and pay him no worse than equal value of the No. 30 pick, with the worst team receiving the 31st opportunity to select someone and the team with the best record receiving the 60th chance to claim a player.

Since players would still receive payment based on the order in which they were drafted, teams could “bluff” and open the bidding on a player they don’t necessarily want but for whom they believe other teams will try to outbid them. Also, second-round picks would still hold considerable value in trades.

Giving an advantage to teams for spending their money wisely makes much more sense than providing inadvertent incentives to purposefully lose. Teams would still be inclined to shed particularly large salaries to put them in the running for highly touted rookies – though opposing teams would also be less likely to take on other teams’ garbage players with longer-term deals – but as long as the results of games aren’t tied into determining the draft order, that’s perfectly OK.

In order for the NBA to be as competitive as possible and have all 82 games be as meaningful as possible, tanking must be eliminated, with intelligent budgeting rewarded. In basketball utopia, whether a team is in rebuilding mode following the trading away of a disgruntled All-Star, like the Magic or Timberwolves, or looking to stockpile cheap young assets like the 76ers, it should be engineered to succeed in the short and long term. A win should be treated as a win, and a loss should be regarded as a loss – no matter what. Late-season wins from a Wiggins-led Wolves, Oladipo-led Magic, Cousins-led Kings or Drummond-led Pistons should not have to be looked at as Pyrrhic victories by fans and front offices. Until the current system is changed, there will be more purposeful losers, watered-down games and reckless spending.