A Mid Tanker’s Dream: A Look at the NBA Draft Lottery

With this matchup between the Charlotte Hornets and the Brooklyn Nets tonight, it prompts the question of whether it’s in each of their best interest to actually want to win the game. Both teams are mellowing near their fellow inferior squads at the bottom of the Eastern Conference. The Hornets and Nets are almost equidistant records-wise from the worst team in the association to the worst team that gets into the Play-In Tournament. Kind of stuck in this no-man’s land where a hot or cold streak in the coming month would, for better or worse, seal their fate for the season. 

If one solely focuses on the long term with the end goal of winning an NBA Championship it might not make the most sense for either team to win this particular matchup. Especially if in hindsight neither team makes the playoffs. This provides an interesting conundrum for each fanbase. Every game you watch whether you are a Hornets or Nets fan you should want your team to win. However, if one loss now equals two two wins later then the choice becomes a lot harder. From a strict business perspective, a team’s management would have less interest in investing in their product if there is less likelihood of improved returns. 

Basically, if the front office determines it does not have a high chance of winning games and making the playoffs it doesn’t make sense to spend more money to marginally improve the team. Even if those marginal improvements result in more wins. Each win a team has the more revenue they generate cause there are more ticket sales, TV viewership, and merchandise sales due to the increased fan engagement. Signing a role player using the mid-level exception can cost a team up to 12 million dollars a year. If that player results in a couple of wins that might not be worth it for a team that's going to win 30 games to get to 32 or 33 wins. Currently, the NBA has a salary cap floor of 90% of the total cap. The NBA luxury tax doesn’t kick in until a team exceeds the initial cap by about $30 million or 20%.

So with those numbers, there are realistically teams that can have a variability of 30% in their spending before counting some teams that exceed the luxury tax. Which are paying a salary above the tax plus the cost of the tax itself. With that big gap in spending, there is no wonder why there is such a disparity in team quality on the hardwood. Even more so if a team has a failed investment in a player making a large amount who hasn’t exactly lived up to their contract that can hamper a team financially as any increased spending would not have the intended impact on the win total or returns on the bottom line. 

This results in a purgatory that is tough for teams to escape from. The only way out is for organizations to acquire players that provide good value on discounted contracts. Fittingly, in regards to the tanking discussion, the best way to find these players is through the draft. So now we have teams that have little incentive to spend to improve their roster but are actively incentivized to lose games in order to improve their lottery odds to get the best chance at finding a player who can improve their sticky situation. 

To provide a little perspective the NBA has done more to combat this than other leagues such as the NFL and MLB. The former which doesn’t have a draft lottery and the latter that doesn’t have a salary floor. However, the NBA is also more star-dependent than the other leagues due to the nature of the game where only five players are on the floor for each team compared to 11 and nine on the field respectively. So what is a league or more aptly an Association supposed to do?

Well, one potential course of action is having limits on how many years in a row a team can enter the draft lottery. If a team is in the lottery for three years consecutively they can no longer move up in the lottery and may in fact move down. Or similar to that if a team has a record that decreases three years in a row they are no longer eligible for the lottery unless their win total increases. A more drastic measure would be to have the teams that don’t make the playoffs have a postseason tournament to determine the draft order. This, however might incentive those teams on the bubble for the championship tournament to lose games to be eligible to play in the loser’s bracket if they feel they have no chance of winning the title. 

Combining both approaches results in a postseason tournament between every team that didn’t qualify for the winner’s bracket to determine the lottery odds. So the winner of the draft tournament would get the lottery odds equivalent to those of the worst team during the regular season under the old system and so on respective to the finishing order. Admittedly it would be difficult to implement changes as grand as these initially, however over the long run the NBA has to make some sort of alterations. The Association owes it to its fans that no one should be conflicted over whether or not they want to root for their team to lose.