How to Replace the NBA Draft — The Playgrounder

While I enjoy following the NBA Draft, it has long left a bad taste in my mouth, though I admit I enjoy following it. There is something wrong about telling the best basketball prospects that, to enter the NBA and make their dreams come true, they have to go play for the team that chooses them, for a contract on the rookie scale. Matt Esposito here at the Playgrounder made an argument along these lines recently, and I’d encourage you to read it. But, if we abolish the draft, we must replace it with a system that still works.

Draft History

Before we replace the draft, let’s start with a fundamental question: Why does the draft exist in the first place? The answer is so that teams would not have to bid against each other for players. In 1946, teams from the NBL and BAA (two leagues that later merged to form the NBA) had gotten into bidding wars over the top prospects, worrying owners about spiralling costs. So in 1947, the two leagues instituted a joint draft. NBA owners were okay with top prospects playing in another league entirely if it meant that they could control salary costs.

Since then, the NBA draft has changed in many ways; there has been a lottery to determine order since 1985 and, while there used to be many rounds (in fact, there were so many that a team once picked a baby in a late round ), there have been only two since 1989. But the general principle remains the same: since players can only sign for the team that drafts them, there is no bidding war between teams to drive up the costs of players.

Of course, the NBA Draft does not just provide cost control for NBA franchises; it also provides parity. The worst teams get the best odds at the top picks, and end up with the best players. But this creates incentives for teams to be bad on purpose, which hurts the viewing experience for NBA fans.

There have been plenty of proposals for draft reform throughout history, especially picking up in recent years after the Philadelphia 76ers took tanking to a new level under Sam Hinkie. Malcolm Gladwell spoke of including all 30 teams in the draft lottery, all with equal odds, to eliminate the incentive for tanking. Boston Celtics assistant GM Mike Zarren proposed a “wheel” where every team would pick in every draft spot once in 30 years, rotating through picks. There have also been mentions of flattening lottery odds, as happened in 2019 .

While these proposals work to help eliminate tanking, they still have the fundamental problem of not allowing players to choose where they go. If a star rookie does not want to go to Minnesota, and they have the top pick, he has to either play there or miss out on his dream of playing in the NBA entirely. I want to go further than these proposals, and eliminate the draft entirely.

Goals

I want to create a better system for rookies to enter the NBA. My goals are to:

  • Give players the freedom to choose where they can go

It is going to be hard to achieve all three, but all three goals are important. It is important to give players the choice of where they can play; players are the reason we watch the NBA, and we want to do right by them. It is hard to argue that the current system, which forces players to play for the team that drafts them, for a rookie scale contract that they cannot go above, under a CBA that was negotiated by current players (i.e. players who have already been drafted and thus will not have to enter the draft again), does right by them. I want to tilt some of the balance of power in the draft back towards the players.

At the same time, it is important to keep parity in the NBA, since nobody wants bad teams to have no chance of getting better. But, simply handing poor organizations the opportunity to pick the best players in the league is not a good solution. It forces the most hyped rookies to go to teams that may not have the infrastructure to help them develop. Maybe if Andrew Wiggins goes somewhere other than Minnesota, he improves his shot selection; maybe if Kwame Brown goes somewhere where he would not be constantly berated by Michael Jordan, he develops better; maybe if Markelle Fultz and Jahlil Okafor have a better situation around them in Philadelphia, they turn out better. Beyond hurting players by putting them in bad situations, the draft encourages teams to be bad on purpose

Tanking is bad for the league. It is a bad viewing experience to watch a game where one team is not interested in winning, and it is not fun to go into a season knowing your team is not going to be competitive. We want teams to be able to get better, but we do not want them to bottom out intentionally.

Details

Instead of a draft, all rookies would enter the league as free agents, and would be permitted to sign with any team in the league. But, teams would have to use a new mechanism to sign rookies: instead of getting a position in the draft, each team would be assigned a contract to offer to a rookie.

These contracts would work much like current rookie contracts work. Teams would be able to go over the salary cap to offer them, but they would be subject to the luxury tax. The difference is, instead of drafting a player and then offering them a rookie contract, teams would be able to offer any rookie their contract slot, and they would have to convince somebody to take it.

The size of the contract each team can offer would be commensurate to their position in the standings in the previous season, with worse teams getting bigger contracts. If you want to further disincentivize tanking, there could be a lottery to determine contract sizes.

As a starting point for how much money teams get, we could look at the current rookie scale for contracts. The NBA could play with these numbers a bit, to ensure that the higher slots have big enough advantages over the lower slots.

Teams would be able to trade this money, instead of draft picks. For an example of how this would work, Major League Soccer has a concept called ‘ allocation money ,’ which allows teams to go over the salary cap to sign players (it can also be traded). Most trades in MLS involve allocation money in some form. Major League Baseball also has a similar system for how international amateur free agents are signed .

Every team would have to offer their full slot to only one player. Otherwise, it would get messy, since these are all multi-year contracts. Would a team towards the top of the standings (with less money to offer rookies) be able to offer all of their money in a one-year deal, thus giving the player the opportunity to hit free agency earlier? A player might rather have a one-year, $13 million deal than a four-year, $50 million one. If this is the case, it would defeat the whole purpose of the slots, so I want to avoid this situation. But if a team ends up having multiple slots due to trades, they could combine slots to offer to one player, or offer each slot to a separate player.

Teams would also be allowed to sign any number of rookies to rookie-minimum contracts, no matter how much money they have in their rookie budgets. Players who receive rookie minimums would be like undrafted free agents today; not picked by a team with one of their rookie slots, but they would still have the opportunity to join a team. Also, since there are only 30 slots, players who would be second-round picks in today’s draft would also have to sign for the rookie minimum.

Benefits

First and foremost, this system gives players the opportunity to choose where to play, which does not exist under the draft. This gives some power back to players, who are at a big disadvantage in the draft. This may increase the likelihood that players will resign with their original teams, since they chose them in the first place. It will still leave rookie salaries capped, but it will also increase the amounts that go to the best ones.

While this system will not encourage parity as much as the current draft, it will still help bad teams by giving them the ability to offer more lucrative contracts than better teams. Small-market teams will be able to use this system to pick up good rookies. These players are looking at their first opportunity to make money as professionals; they are not going to turn down huge amounts of money to take drastically less (at least, not always).

What will likely happen is that they will take slightly less to avoid certain teams, but will still sign with another bad team. There is a good anecdote in Yaron Weitzmann’s book about how Kristaps Porzingis’ agent did not want him to be drafted by the Philadelphia 76ers, and so he refused to let Porzingis meet with the team to prevent them from drafting him. Porzingis’ agent was still fine with him going to another bad team, and he ended up on the Knicks. Without a draft, there will be more instances of players doing this, since a team will not be able to call the bluff and draft the player anyway.

The reason Porzingis’ agent did not want him on the 76ers was because the team was tanking, not market size; Philadelphia is one of the largest markets in the NBA. There was a lot of bad news coming out of the team at the time, especially on how they treated players. Teams that tank like that are bad for the NBA, as they do not provide a competitive product, and it is a plus that this system disincentivizes that behavior. If Sam Hinkie knew players were going to refuse to sign with his tanking team, he would not have tanked, at least not to the extent that the 76ers did.

The end result will likely be that prospects shuffle around the lottery. In the most recent draft, James Wiseman still probably takes a big deal from the Warriors, but Anthony Edwards may have wanted a slightly smaller deal to stay at home in Atlanta, or to go to a big market like New York or Chicago. Maybe LaMelo Ball would have wanted to play with his brother in New Orleans. Tyrese Haliburton probably still goes to Sacramento, as it sounds like he was telling other teams not to draft him.

Arguments Against

This system will allow top prospects to choose to sign for smaller deals for the Lakers and Clippers. Every so often, a player will do that and ignite a firestorm in NBA fandom. But, based on how free agency currently goes, there is evidence that this will not happen as often as fans may fear.

Plenty of players will take the richest offer on hand, regardless of the team who offers it. We see this happen time after time in free agency; Gordon Hayward opted out of his contract with the Boston Celtics to go play for the Charlotte Hornets, and Bogdan Bogdanovic and Danilo Gallinari signed lucrative deals with the Atlanta Hawks just this offseason. Plenty of other players will sign for the team that offers them the biggest opportunity, much like Jerami Grant just did when he spurned a big deal from the Denver Nuggets to sign for the same terms with the Detroit Pistons.

The Hawks, Hornets, and Pistons were all bad last season, and Detroit and Charlotte are not glamorous markets. Yet these teams were still able to draw free agents. These teams and others of their ilk will be able to get prominent rookies (who will be even more motivated to take money than the usual free agent, since they will have not made any money in their NBA careers) to play for them. These teams will still have hope going into the rookie free agency period each year.

Another possible issue could arise if teams choose not to spend their allocated money. Many top rookies will sign in places like Cleveland and Sacramento if they are offered more money, but that will not happen if ownership in those cities refuses to shell out cash. There are cheap owners in the league, so this could happen, though the NBA could force teams to use their slots, either through signing a player or trading them. Alternatively, the NBA could pay for rookie salaries as a league, so teams would literally get the money to pay for rookies themselves from the league office. Referring back to MLS, this is actually how the allocation money works. Every team would chip into the rookie fund equally, and then more money would go to bad teams. Then, every team would spend their full allotment, since it is free money, and there would be no issues with cheap teams simply refusing to sign rookies.

This new system is admittedly a tough sell. Any changes to the draft must come as changes to the CBA, and, since nobody eligible for the draft is a member of the player’s association, it is unlikely that the players would lobby too hard for this change. The owners may go for it, since they would spend the same amount as in the current system, though small-market owners may need convincing that this does not hurt them. Teams that have traded for future draft picks would also likely complain, as those draft picks would have less value if converted to rookie contract slots. To get around this, we could set the year that the switch takes place to 2028; teams can currently only trade picks seven years in advance, so this would take the switch out beyond any traded future picks. But if the kinks can be worked out, this could solve a lot of the current issues with the NBA draft. And, if the current draft is fun to follow, imagine the buzz that would ensue from following rookie free agency, where the stars of tomorrow would be able to sign with any team.

Originally published at https://www.theplaygrounder.com on January 18, 2021.

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