Why the NBA draft must be abolished

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How ludicrous is the concept of the NBA draft?

Imagine loving technology, to the point where you’re deconstructing computers as a child, writing code as a teenager and building software as a young adult. Aspiring to your dream job in Silicon Valley, you attend Stanford University, a feeder school for technology savants. Maybe you stay all four years to graduate, maybe you don’t – the demand for your skills may be so high that the lure of a lucrative payday every two weeks is too much to resist for your nonexistent bank account. Plus, you already promised your mom that mansion.

Google, Apple, Microsoft, Intel – they’re all lining up for a chance to shower you with salaries, bonuses and benefits, ready to offer a stimulating work environment, accomplished co-workers, helpful mentors and opportunities for career advancement. You could opt for big-city living in New York, the warm weather of Miami or just stay locally in Palo Alto. The sky is the limit!

Only it’s not.

A cartel of oligarch technology companies has established collusion rules. As one of the best candidates, the only job available to you is in Englewood, Colorado working for DISH Networks, a satellite television company with the unfortunate distinction of being the worst technology company to work for. Dish's management has such disregard for its employees, customers, and shareholders that Businessweek recently called it “The Meanest Company in America,” identifying the co-founder, chairman and former CEO Charlie Ergen as the main culprit.

One of Mr. Ergen’s last accomplishments as the CEO was to go dumpster-diving into bankruptcy court auctions for such stellar acquisitions as Blockbuster. With competitors such as DirecTV, Verizon and Time Warner, there is no optimism for a turnaround – especially considering Dish's mismanagement of its talent and business.

Not only do you get the privilege of employment with this bang-up operation, but your compensation will be capped at a rate of a co-worker with a fraction of your abilities. You also cannot resign to work for another company in this industry for at least three years. Meanwhile, your freezing, underpaid, demoralized self is expected to singlehandedly turn the company around to Apple-type proportions while being constantly undermined by an ineffective boss, lack of resources and training as well as a slab of backstabbing co-workers.

Your only hope of actualizing your potential is to overcome these dreadful circumstances to bring the company some measure of success. Only then will you be able quit, go work for a top company, be paid what you are worth and have the chance to work on a potential technological breakthrough.

Sounds incredulous?

Substitute technology with basketball, Google with the Spurs and Dish with the Milwaukee Bucks – and those are the realities of a top NBA prospect in a nutshell. These deterring restrictions on teams and players are facilitated by the NBA through its annual draft in the name of parity.

The reason for parity, of course, is seemingly noble yet self-serving. Technically, the teams are not in the business of beating its competitors as normal companies would, although winning games certainly increases the bottom line. The quality of the game itself is a form of entertainment. The broader the range of talent amongst the teams, the more competitive and entertaining the games become on a nightly basis. A competitive team in Milwaukee or Charlotte increases the overall value of the NBA by generating revenues through ticket sales, merchandise, sponsors and television rights.

In order to increase competitiveness and, consequently, the value of each team in this exclusive club of 30, the NBA teams have colluded to redistribute revenues – from the larger, more successful teams to the smaller, unsuccessful ones – as well as talent. Much in the way of our fictional tech prospect, the employment of incoming NBA prospects is limited by the NBA draft, mandated annually with routing the best incoming talent to the worst-performing team.

Unfortunately, and perhaps unsurprisingly, this process has failed miserably. Not only has the draft not improved the worst teams in the league, but it has also derailed the careers of many talented players when subjected to substandard franchises, coaches and teammates.

Oligarchy has rarely been so harmful.

The main issue with adding a franchise-type rookie player to a hapless team and a dysfunctional franchise is that it does not guarantee a turnaround. In fact, it rarely happens. In the most recent ten NBA drafts, over half of the top-3 picks have been busts, including 30% of the number one picks. The very fact that only inept franchises get a chance to draft the highest projected rookies is exactly the problem.

The incompetent GM or owner of a perpetually dreadful team, which is granted a high lottery pick in most drafts, have proven to lack the obligatory skills to properly predict player performances or to evaluate how a player would mesh with the team at hand. This ineptitude seemingly causes teams to simply draft the player with the largest hype. This is how Adam Morrison (Bobcats, 2006), Derrick Williams (Timberwolves, 2011) and Otto Porter (Wizards, 2013) end up in a top-3 of the draft. None have made any significant contribution for a NBA team.

But even if the team selects a player with the ability to succeed in the NBA – the lack of good coaching, strong veteran leadership and surrounding talent on a wretched franchise will doom any high-potential player. The first pick of the 2006 NBA draft, Andrea Bargnani, began his career with the Toronto Raptors averaging double figures and finishing second in the Rookie of the Year voting. He kept improving in each of the next five years, averaging close to 20 PPG between 2009 and 2012.

Yet, the Raptors had only one winning season during Bargnani’s seven-year stint with the team, never making it past the first round of the playoffs. During that span, the Raptors had three different coaches, its best point guards were T.J. Ford or José Calderón and the role of mentor fell on the oft-enigmatic Chris Bosh. Bargnani’s career would never recover. With his potential permanently stuck on mediocre, he was unceremoniously shipped out to the Knicks in 2013 for ten cents on the dollar.

As Bargnani was never given the opportunity to choose where to begin his NBA career – no player does – he was essentially relegated to the basketball equivalent of the Dish Networks. With his professed abilities, could Bargnani have been an All-Star on a team like the Spurs, with an established coach in Gregg Popovich, a steady point guard in Tony Parker and a seasoned veteran mentor in Tim Duncan?

The existence of a NBA draft presumes that the problem for an unsuccessful NBA franchise is the lack of talented players. In reality, incompetent franchises are unable to identify desirable talent through the draft process – and if they do, the player is not given an opportunity to succeed. Rather than providing teams with annual “bailouts” that they consistently squander, the NBA should create economic incentives for teams to invest in their front office.

One of the best floated proposals to reform the draft has been to simply do away with it. Rather than limiting teams to players available at their draft position, let NBA teams pitch any prospect of their choosing with the sole wrinkle of imparting cap exemptions for teams with the worst records.

Both the Cleveland Cavaliers, picking first in the 2014 NBA draft, and the San Antonio Spurs, picking last, should have the same opportunity to pitch to Andrew Wiggins to join their team. As any coveted prospective employee entering the workforce, Wiggins should also be given the freedom to select his employer and to weigh the terms of various employment opportunities. Similar to a Silicon Valley prospect, the main considerations for Wiggins are – in some approximate order – money, co-workers, geography, opportunities to learn and career prospects.

The biggest factor is, of course, the size of the contract.

The current fixed rookie scale, preventing prospects to sign above a certain amount designated to their draft position, is unworkable. There is a clear difference between talent in various years and having the same draft position in two drafts should not obligate a team to pay the same amount to the selected players. Kyrie Irving, the first selection of the 2011 draft, is averaging 20 points with six assists while Anthony Bennett, the first selection of the 2013 draft, barely gets off the bench. The Cavaliers, who drafted both Irving and Bennett, are paying the same $5.5 million per year to their best player and their worst.

Without a draft, the Cavs, the Spurs and every team in between should be able to offer Wiggins any salary it deems fit. To take into account various natural disadvantages of some teams, such a geographical or smaller market locations, the NBA can offer larger cap exemptions. The worst-performing team would be able to absorb the largest cap hit. If Wiggins wants to earn the most money possible for the next four years, the Cavs or the Bucks would be in the best position to extend such an offer.

Most prospects, however, would be more sophisticated. Agents and managers look to maximize the lifetime earning potential of their client. Faced with an array of offers, Wiggins could potentially choose less money in order to avail himself of the tutelage of a good coach or a team more fit to utilize his skills or lacking at his position. A team that is better able to successfully facilitate Wiggins development could earn him more money over the lifetime of his career. Or perhaps Wiggins simply aspires to win championships and would be willing to sacrifice money, minutes and personal accomplishments to go to a perennial contender. As in the “real world,” job prospects should be able to prioritize their best interests and inclinations.

This structure would also create entirely different priorities for NBA teams. In order to attract the best prospects, franchises will need to primarily concern themselves with building a competent front office, a winning culture and a balanced roster. If the 2014 Spurs title revealed anything, it was that a team need not have the best players to win. Collectively, a good coach, complementary players and a knowledgeable front office can be competitive in the NBA without drafting that potential superstar. With some intellectual honesty, the NBA must realize that a GM is arguably more valuable to a team than a franchise player. The abolition of the draft will only accentuate this reality.

As with any company in a competitive environment, an NBA franchise that is forced to market itself to the best talent would be incentivized to develop a competent structure, good management, complementing players and a coherent plan for the future. Better team administration would enable teams to better identify skilled players with a vested interest to cultivate that talent.

Ironically, only the elimination of the NBA draft would promote true parity in the NBA.

Toronto Raptors
Cleveland Cavaliers
San Antonio Spurs
NBA Draft

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