Owners Reject Lottery Reform

Hey TDS, it's been a while. Didn't expect to see you here! With a new season amping up and the league moving to take up some business, I figured it was time we get to discussing some actual news. Sure, I could tell you that Dwight got a cut on his arm, needs stitches, and will sit out the last meaningless exhibition game as a formality. But that's not news. I could even tell you that Dwight was named the 10^th best player in the NBA and his teammate James Harden was named the 9^th best. I don't feel like driving traffic to ESPN, though. I already wrote for that outfit. No thanks.

No, instead, let's have a discussion about something with some meat on its bones. The NBA Draft lottery is near and dear to every Rockets fan's heart. The problem is simple: teams perpetually tank because talent is a crapshoot and because the worst team tends to pick 3^rd or lower. The Rockets were plagued with the 14^th pick for three straight years in a row because of their refusal to swim in the mediocre pool. Instead, Morey and Co. valiantly battled to stay in every game and eked out near misses in the playoffs. Their reward for keeping the competitive gap in the league closer than it could have been? Patrick Patterson, Marcus Morris, (Thank God for a trade making this "technically" not true but they're included anyway) Jeremy Lamb, and Royce White. Sit and think about that for a bit. Houston posted a record eclipsing 40 wins in each of the seasons they made those draft picks. They did so in the hyper-competitive Western Conference AND in the killer Southwestern Division. Clearly something needs to change. Well, the National Basketball Association had the opportunity to reward such cavalier defiance of the general modus operandi of the league.

They didn't.

Commentators expected the vote to get the minimum 23 votes needed for approval of a measure that would have more evenly distributed the chance at the top overall pick. Currently the worst team in the NBA has a 25% chance to receive the number one pick with diminishing percentages until pick number 14 (Tenths of a percentage point to receive the #1 pick). The NBA attempted to get approval of the worst four teams garnering an equal 11% chance at the #1 pick and the best team in the NBA receiving a 2% chance at the pick and then distributing the percentage chance throughout the rest of the field.

The vote died 17-13. The 13 teams that refused to adopt the new system were Chicago, Washington, Phoenix, Philadelphia, Oklahoma City, New Orleans, Detroit, Miami, Milwaukee, San Antonio, Utah, Sacramento and Washington. The distribution is primarily focused on small-market teams. Small markets in the NBA have difficulty retaining talent and, of that group, those teams are either desperately relying on the draft to change their fortunes or were heavily built through the draft. Chicago and Miami, obviously, are the outliers for their ability to attract free agents as a major destination market.

Why even reform the lottery?

Well, simply put, perpetual mediocrity is bad for the league. The NBA just signed a colossal television deal extension to the tune of 2.66 Billion US Dollars per year starting in 2016. For a company that obligated itself to deliver that level of entertainment every year, you have to want to see competition and parity. Reforming the lottery is the first step to get there. Currently the NBA lottery places team on a mediocrity treadmill to pursue game changing talent. The Cleveland Cavaliers are the premier example of this race to the bottom. In their case it paid off, multiple times, eerily close in time. Therein lies the problem. The draft lottery proved to not be an adequate check to a team determined to bottom-dwell.

The Small Market myth.

Perpetual lottery teams in the current environment are designed to be as bad as possible because there is an incentive to do as much.

Teams such as San Antonio and Oklahoma City used the lottery as its intended. To acquire talented players, pay them, and then steward what they have intelligently. Teams such as the Cavaliers, the Kings, Timberwolves, and Wizards, have been plagued by ineptitude and poor management that results in multiple appearances at the top of the lottery. Failure to create a competitive team, acquire complementary players, and manage cap situations have shown to be more of a prohibition to success than whether or not a team drafted high enough.

The Draft has fare more busts than locks.

For every Lebron James or even John Wall that is drafted there's a Darko Milicic, Greg Oden, Michael Beasley, or OJ Mayo. Ensuring a team is in the top tier of the draft does not mean their scouting department can't miss. Equalizing the chances of the worst teams in the NBA to take their shot in the dark doesn't deprive any team of the opportunity to draft a game changer. The argument can easily be made that normalization of draft odds would shorten rebuilding windows for teams that may be on the brink and, thus, hedge against further lack of quality competition. Teams determined to race to the bottom of the league to pick near the top of the draft quickly find out that they are checked by three other teams in the same situation and no more sole benefactor rules the bottom of the barrel. Simple incentives.

Won't small market teams still need help?

The short answer is yes. Effectuating that help, however, would require the league to hire management consultants to address the actual problems of small market teams.

Small market teams cry foul about the ability to retain talent due to financial pressures. To offset that, the NBA redrafted its pay scales to favor retaining teams, slashed the player's share of basketball related income ("BRI"), and increased its revenue sharing procedures. Now with a 2.66 billion dollar television deal inked, small market teams will have less of a reason to complain that they're unable to afford players. Mediocrity engrained in management tends to hold teams back more so than external constraints. In the same manner that the champions of the current draft system are Oklahoma City and San Antonio, they're also the blueprint for why lottery reform is appropriate (More so the Spurs than the Thunder). The Spurs supplemented their Tim Duncan pick with foreign players, value picks, and the likes of Manu Ginobli, Tony Parker, Kawhi Leonard, and Tiago Splitter which has lead to their longevity.

Where do we go now?

That's the million-dollar question. A simple majority of the league feels reform needs to happen. Indeed, the Rockets serve as the poster child for reforming the system. Despite keeping competitive balance and level of play in mind they hit and missed on draft picks as they attempted to get out of mediocrity. The simple solution (As I advocated for) would have been to rip the team apart, get a great pick, and go from there. Instead, Morey laid out a blueprint to spend wisely, acquire picks, and parlay that into major acquisitions in the trade and free agent market. Second round picks have shown exceptional value (Debatable first round success, arguable first round pick failure) for this team and a change in draft policy would give teams like Houston far more ammunition to make value picks matter more.

An alternative model that small market teams may bring up is the NHL Model. It would utilize the majority of the current structure as seen in the NBA lottery but offset it against guarantees of positioning. In the NHL the worst team stands the best chance to win the lottery but they are guaranteed to fall no further than one pick back. This, in a sense, rewards tanking but provides certainty of investment whereas the NBA's model allows a team to fall from a near sure shot at number 1 to a total crapshoot in picks 2-4. This counter-proposal, however, fails to disenfranchise rewarding inept management.

So what was the point of this article?

Really, I'm interested in what you think the solution to the lottery is. There isn't enough parity in the league to warrant NFL style reverse drafting (And if you're a Bills/Jaguars fan it doesn't work anyway) and the NHL model doesn't shift the system enough. Clearly there's appetite for something other than what's being done. The Cavaliers, clearly satisfied with their current lot, voted to change the system they so richly abused now that they have Lebron. Shouldn't the team that abused the system and now wants to abolish it lend SOME credibility to the idea that the old model really should die?