The NBA Draft Auction

[Casperian]

I had an idea to fix the NBA Draft Lottery system, and I would like to know what you think about it. Itīs certainly not a perfect concept, so if you find any flaws in it, feel free to criticize it. It became a pretty long post, so I apologize in advance for any grammar mistakes, but english is not my mother-tongue.

I had several goals for this concept:

A) It should limit tanking to a minimum, preferably to eliminate it completely

B) It should still account for the regular season records, and ensure that the worst team gets the best chance at the #1 pick

C) It had to maintain the level of tension and excitement that the current lottery system creates

The NBA Draft Auction:

1. The NBA would have to create a new currency. For the purpose of this thread, letīs call it a Starbuck (SB).

2. At the end of the season, the team with the worst record will receive 6000 SB, the team with the second-worst record 5800 SB, and so on.

3. Playoff-qualified teams will also get SB, but considerably less.

Worst record:6.000 SB
2nd worst:5.800 SB
3rd worst:5.600 SB
....
13th:3.600 SB
14th:3.400 SB

15th:2.000 SB (Playoffs ! )
16th:1.900 SB
17th:1.800 SB
....
Best record: 500 SB

4. Only the 14 teams which missed the playoffs receive a spot in the actual auction and are eligible to bid their SB for one of the first 14 picks in the draft.

5. The 14 non-qualified teams can now bid for a certain draft position from #1 - #14.
They`ll have to send their bids to the league, who will then announce the final draft order.

6. No matter if a team finishes with the worst or the 14th worst record, every team in the auction will be able to bid for every position from 1 - 14 in the draft.

7. Teams can choose to make no offer at all, as they will automatically lose the amount of SB they`ve bid for a certain position, no matter if they win or lose the auction.

8. One spot in the auction, one right to bid SB for a specific draft position.
Of course, noone will bid for No. 12, 13, or 14 in the draft, so remaining draft postions are given to the losers (and non-participants) of the auction in reverse order to their regular season record.

9. Teams are allowed to hoard their SB over time.

10. Teams can trade their right to bid in the auction and their SB seperately.

Example:

The Lakers miss the playoffs for 5 straight seasons, and finished this season with the worst record, but never offered any of their SB for a draft position. Theyīve accumulated 30.000 SB and have the right to bid for one certain position.
They decide to trade 7.000 SB to another team for the right to make a second bid for another position.

The Cavaliers make the playoffs 4 out of 5 seasons, but barely missed the playoffs this year. Theyīve accumulated 10.000 SB and have the right to bid for one certain position.

The Celtics qualified for the playoffs for 5 straight seasons. Theyīve accumulated 5.000 SB but they canīt bid for a draft position. However, the Celtics decide to trade one of their star players to a team who could make an offer, but doesnīt want to, for 10.000 SB and the right to participate in the auction.

When itīs time to bid for a position, the situation of these three teams will look like this:

Lakers: 23.000 SB and the rights to bid for two positions.
Cavaliers: 10.000 SB and the right to bid for one position.
Celtics: 15.000 SB and the right to bid for one position.

The Lakers now figure theyīd need at least 15.001 SB for the #1 pick.
They bid 15.001 SB for the #1 pick, and the remaining 7.999 for the #5 Pick.
No matter what happens at the auction, the Lakers will have no remaining SB left afterwards.

The Cavaliers know they donīt have enough SB for one of the top spots. Theyīre high on a certain player, and think they could get him at #5. They bid 10.000 SB for the #5 pick.

The Celtics know they canīt get the #1 pick, but they could make an offer for one of the top spots. They offer 3,000 SB for the #3 pick. No matter what happens at the auction, they will definitely have 12.000 SB left.

What happens next?

The Lakers get the #1 pick, lose the #5 pick, but get the #12 pick as a consolation prize, since that was the first free position no other team has made an offer for.
At the first day of training camp, the #1 pick blows his knee out, and the hopes of any Lakers fan on the planet are now crushed.

The Cavaliers get the #5 pick.

To everyoneīs surprise, noone else has made an offer for the #3 pick. Hooray for the Celtics. They get their pick, and keep 12.000 SB on top of that, which they trade at the deadline for another star player.
They win 9 titles in a row.

Does this system accomplish what it wants to?

Iīd say yes. Letīs take a look at the goals Iīve set for the system.

A) It should limit tanking to a minimum, preferably to eliminate it completely

Since all you can get for a worse record is a few more SB, it isnīt profitable to tank anymore. The difference between the worst record and the 4th worst record are 800 SB, thatīs just not enough when you look at the big picture.

B) It should still account for the regular season records, and ensure that the worst team gets the best chance at the #1 pick

That is still the case. However, the auction benefits long-term losers more than teams that had only one bad season. Situations like the 1997 Draft, where the Spurs were able to get Tim Duncan, would be a thing of the past.

C) It had to maintain the level of tension and excitement that the current lottery system creates

I think thatīs also true. The auction may benefit long-term losers, but since every team has a theoretical chance at the top pick, and since thereīs a lot at stake when you make a bad offer, thereīs still the same level (maybe even more) of tension that the current lottery system creates.

The big difference is, smart teams who play their hand right can gain a lot more with the auction system. Instead of praying for some lucky bounces, they can make their own luck.

Additional Benefit
Not only does the auction concept more or less accomplish all itīs goals, it also has a rather interesting side effect.

The new currency would allow for way more parity, stability and opportunities between teams on the trade market than the current system, in my opinion. It could basically function as an additional valve in the current system, similar to trading draft picks now, with the difference that the currency system wonīt destroy a franchiseīs future completely if their management makes a bad trade, and it allows to put a more accurate value on certain players in potential trades, which will hopefully benefit the teams with smart management in the long run.


So, what do you think? Where did I make a mistake? Any questions?
Do you have any suggestions that could improve the concept of a draft auction?
Can you think of a better system? Let me know.

[Redz]

I started losing my grip on it about midway through, but I like the gist of it.

[Casperian]

I started losing my grip on it about midway through, but I like the gist of it.

It was the cruddy example, eh?

[bdm860]

Interesting concept.

After the bids, is the winning bid amount revealed?
Does it say just say the Celtics won the 3rd pick?
Or with a bid of 3000 SB's the Celtics win the 3rd pick?

(Personally I think it would be alot more interesting if the winning bids weren't revealed, that way teams never know how much another team has.  Makes the auction process a whole lot more interesting, but the conspiracy theorists will also say it's shady).

One issue, I don't get how this stops good teams with a bad year (like the Spurs in '97) from still winning the lottery.

Look at it like this, the Spurs have the longest active playoff appearance streak at 12 in a row (I think).  Spurs seem to finish with like a top 5 record every year, so we'll just give them an average of 800 SB's per year.  800 X 12 = 9600.  Since they don't ever get a chance to bid because they're always in the playoffs, the first year they miss the playoffs they have this huge stockpile of SB's.  Or if they don't miss the playoffs, they just trade with the 14th worst team for their auction spot and use their stockpile of SB's to get the top pick, who helps keep them going with another 12 straight playoff appearances where they stockpile SB's and eventually win the top pick again.

I don't think this will help the league.

[Eja117]

My self diagnosed add took over when I got about 2/3rds of the way thru, but I LOVE it.


I'll have to reread this later

[Redz]

I started losing my grip on it about midway through, but I like the gist of it.

It was the cruddy example, eh?

No, it's mostly due to me spending way too much time playing a computer game that my 4 year old received as a present.  It's called Fishdom (horribly addictive matching game).

I do like the idea and would like to dig deeper into and toy around with some ideas when I am of sounder mind.

[Casperian]

Interesting concept.

After the bids, is the winning bid amount revealed?
Does it say just say the Celtics won the 3rd pick?
Or with a bid of 3000 SB's the Celtics win the 3rd pick?

(Personally I think it would be alot more interesting if the winning bids weren't revealed, that way teams never know how much another team has.  Makes the auction process a whole lot more interesting, but the conspiracy theorists will also say it's shady).

Well, I think the teams would have to reveal the numbers afterwards, as their fanbases certainly want to know where their team stands, and wether their GM overpaid or not. 

One issue, I don't get how this stops good teams with a bad year (like the Spurs in '97) from still winning the lottery.

Look at it like this, the Spurs have the longest active playoff appearance streak at 12 in a row (I think).  Spurs seem to finish with like a top 5 record every year, so we'll just give them an average of 800 SB's per year.  800 X 12 = 9600.  Since they don't ever get a chance to bid because they're always in the playoffs, the first year they miss the playoffs they have this huge stockpile of SB's.  Or if they don't miss the playoffs, they just trade with the 14th worst team for their auction spot and use their stockpile of SB's to get the top pick, who helps keep them going with another 12 straight playoff appearances where they stockpile SB's and eventually win the top pick again.

I don't think this will help the league.

In that case, the Spurs have earned every right to claim the #1 Pick, since it was their decision to hoard their SBīs for 12 seasons. Only time could tell wether it was a smart decision or not to save their SBīs for hard times (see the Lakers in the example).

Teams like the Lakers, Suns, Rockets and Mavericks would also receive SBīs. Take Mark Cuban, for example. He doesnīt strike me as a guy who would hoard SBīs for the Draft, he would spend them to get Jason Kidd.

[Casperian]

Btw, thanks for the kind words, it took me several hours to write that post, so itīs good to know it wasnīt a waste of time.

The SB currency is basically a substitute for money, generated based on a teamīs success, so it doesnīt benefit teams who generate more money than others, but it would still represent a fix value. The whole "boom or bust" mentality that comes with any trade (teams donīt want to give up or receive certain players, contracts or Draft Picks, because it could blow up in their faces) would be minimized, in my opinion.

[Fafnir]

This system doesn't eliminate tanking. If anything it'd create an incentive to tank for multiple years. Then you could get a ton of SBs to bid on a Tim Duncan, LeBron James, Shaq type talent.

No one would ever spend much of the SBs, because getting those franchise level talents are so much important than middle of the road draft picks.

[indeedproceed]

This system doesn't eliminate tanking. If anything it'd create an incentive to tank for multiple years. Then you could get a ton of SBs to bid on a Tim Duncan, LeBron James, Shaq type talent.

No one would ever spend much of the SBs, because getting those franchise level talents are so much important than middle of the road draft picks.

I've been convinced for years that the best way to handle the draft lottery is a playoff. You wanna see a team play for its life? dangle a lotto pick in front of them.

[MBz]

I've been convinced for years that the best way to handle the draft lottery is a playoff. You wanna see a team play for its life? dangle a lotto pick in front of them.

That be interesting, but say you do this and the top prospect is a point guard.  Wouldn't the point guards both play awful hoping the other team win so they still had their starting job next season?

[Casperian]

This system doesn't eliminate tanking. If anything it'd create an incentive to tank for multiple years. Then you could get a ton of SBs to bid on a Tim Duncan, LeBron James, Shaq type talent.

No one would ever spend much of the SBs, because getting those franchise level talents are so much important than middle of the road draft picks.

I disagree, and I think the example in the OP is about a similar situation, albeit an extreme one.

1. Noone tanks for multiple years, not even for a franchise player. A few more SBīs wouldnīt make up for the loss in revenue, especially since the currency system makes trades way easier.

2. Teams already trade whole Draft Picks in the current system. Why wouldnīt they trade the less risky SBīs?

3. What if another team has the same tactic? Do you risk to aggravate your fans by spending all your saved SBīs on a bid you could lose?

It would be economically insane to tank for multiple years, just for a plus of 2000-3000 SBīs. Just like the Celtics in the example, there will always be a perennial contender who could afford to trade two of their second-tier starters for SBīs. Your team couldnīt do that, since youīve just tanked for multiple years, and other teams usually wonīt pay as much for your players as they would for starters on a contender.

[Casperian]

This system doesn't eliminate tanking. If anything it'd create an incentive to tank for multiple years. Then you could get a ton of SBs to bid on a Tim Duncan, LeBron James, Shaq type talent.

No one would ever spend much of the SBs, because getting those franchise level talents are so much important than middle of the road draft picks.

I've been convinced for years that the best way to handle the draft lottery is a playoff. You wanna see a team play for its life? dangle a lotto pick in front of them.

I like the theory, but that wouldn`t give the worst teams the best chance at a good pick.

What if a team barely missed the Playoffs, because their MVP level talent was hurt for most of the regular season?
If he comes back for the last two weeks and that team wins the Draft-Playoffs, the fans would go crazy. It could be profitable for an eigth seed to say "Ah, screw it, we won`t win it all this year anyway, let`s go for LeBron James".

[Fafnir]

This system doesn't eliminate tanking. If anything it'd create an incentive to tank for multiple years. Then you could get a ton of SBs to bid on a Tim Duncan, LeBron James, Shaq type talent.

No one would ever spend much of the SBs, because getting those franchise level talents are so much important than middle of the road draft picks.

I disagree, and I think the example in the OP is about a similar situation, albeit an extreme one.

1. Noone tanks for multiple years, not even for a franchise player. A few more SBīs wouldnīt make up for the loss in revenue, especially since the currency system makes trades way easier.

2. Teams already trade whole Draft Picks in the current system. Why wouldnīt they trade the less risky SBīs?

3. What if another team has the same tactic? Do you risk to aggravate your fans by spending all your saved SBīs on a bid you could lose?

It would be economically insane to tank for multiple years, just for a plus of 2000-3000 SBīs. Just like the Celtics in the example, there will always be a perennial contender who could afford to trade two of their second-tier starters for SBīs. Your team couldnīt do that, since youīve just tanked for multiple years, and other teams usually wonīt pay as much for your players as they would for starters on a contender.

The problem with this system is that most if not all teams wouldn't spend any until the LBJ/Oden/Duncan talent came around. So good teams would just horde all of their points for such a player. Especially since often times teams won't have any chance to bid because they're not in the lottery.

Another issue I have with it is that you'd have to work very hard against collusion. GMs could do all sorts of unethical things by working together.

In my mind the purpose of the draft is to inversely reward bad teams with high picks to redistribute talent to keep the league competitively balanced. The secondary purpose is to give every team hope and/or hype every year.

I don't think this system would do either. One bad mistake by a GM based on bad game theory could literally cost his team 5+ draft positions. Worse then his "points" would be depleted killing his chances of rebuilding in future years.

If you want to create a marketplace and reduce tanking, why not just allow all rookies to be FAs?

[indeedproceed]

This system doesn't eliminate tanking. If anything it'd create an incentive to tank for multiple years. Then you could get a ton of SBs to bid on a Tim Duncan, LeBron James, Shaq type talent.

No one would ever spend much of the SBs, because getting those franchise level talents are so much important than middle of the road draft picks.

I've been convinced for years that the best way to handle the draft lottery is a playoff. You wanna see a team play for its life? dangle a lotto pick in front of them.

I like the theory, but that wouldn`t give the worst teams the best chance at a good pick.

What if a team barely missed the Playoffs, because their MVP level talent was hurt for most of the regular season?
If he comes back for the last two weeks and that team wins the Draft-Playoffs, the fans would go crazy. It could be profitable for an eigth seed to say "Ah, screw it, we won`t win it all this year anyway, let`s go for LeBron James".

Single game playoff series, like march madness

Here is why it would work...Any team in the NBA even with it's best player out can beat any other team in the NBA if they both want it bad enough. Teams would come out 110%. It would involve luck as much as anything, if you believe the first part.

Maybe lets say 25-32 would playoff for #'s 1-8. 24-17 would play for 8-16..the rest gets sorted by record.

Then, if you do flat out tank, it will kill you if you don't have the talent to compete in the year end tournament.

I really really like this idea. Also, it gives other teams some ways to make money they didn't have before.