• Villanova Sports Law Blog

Tearing Up the Process: The NBA's New Draft Lottery Reform Seeks Seeks to Counter Tanking

By Arun Thottakara:

We are now just a few days before the start of the grueling eighty-two game NBA season. Ownership, management, and coaches illustrate their long and short-term goals, and prepare their teams for the upcoming race. For some teams, it is a race to the Larry O’Brien Trophy and basketball immortality. For others, it is a race to the bottom and a top pick in the 2019 NBA Draft.

The new 2019 NBA Draft Lottery changes were made to flatten out the odds of bottom-tier teams getting the top pick. [1] Lottery reform was deemed necessary because, given the current system, analytics suggested that the best path to rebuild was to intentionally fail. [2] Driven by the Philadelphia 76ers and former General Manager Sam Hinkie, the process known as “tanking” became a commonly-used strategy, and serviceable players became valued currency in the league as teams traded these players away to stockpile top picks and draft perennial all-stars. [3]

Under the previous lottery system, the team with the worst record had a 25% chance at the number one pick, with the second and third-worst teams having 19.9% and 15.6% chances, respectively. [4] In contrast, the new NBA Lottery rules give the bottom-three teams all a 14% chance at the number one pick. The odds of every subsequent lottery team decreases by an average of 1.2%. [5]

According to NBA commissioner Adam Silver, there was “too great an incentive” for teams to embark on a tanking strategy given the previous rules. [6] These new rule changes still recognize that poor performing teams need top draft picks as a way to rebuild, but attempts to sets a standard showing that there is no need to be at the very bottom. [7] The new rule changes mark an aggressive shift to level the odds of the league’s worst team getting the top pick, but the value of that pick remains unaffected. The true effects of these changes can only be understood when comparing the odds of a team getting a top lottery pick to the value of that pick itself.

The value of a player can be measured by his Value Over Replacement Player (VORP). VORP is measured by: [box plus/minus (BPM) – (-2.0)] x (% of minutes played) x (games/82). The formula results in a per possession direct value comparison of player X to a replacement level player (BPM of -2.0). [8] This statistic is useful because it generally tracks linearly with salary, giving an accurate measure of player value. [9]

Since 1985, the number one pick’s VORP has been significantly higher than the rest of the draft lottery. The average number two pick’s VORP is worth only about 80% of the average number1 pick, and the players only get less valuable from there. [10] This makes sense, as 16.8% of number one picks are NBA All-Stars, only 10.1% of number two picks are NBA All-Stars, and from there it drops to 9.4%, 6.8%, and so on. [11] The opportunity to draft perennial All-Stars is the main pursuit of tanking. Combine that with the fact that higher picks indicate a direct correlation with All-Star potential, and the NBA drastically flatting lottery odds, reducing the value of tanking.

However, by no means will these changes stop the tanking philosophy from being used by teams. What it does do is deter the “race to the bottom” that has been seen over the last half-decade. Instead, there will be a switch from racing to the bottom, to racing to the bottom three. Although the rules have shifted, every organization is on the same playing field. The odds remain in a team’s favor if they drop to the bottom three.

For teams with no hopes at the playoffs, tanking still remains the most viable option compared to trying to win pointless end of season games. However, teams understand that their lottery positioning is no longer as valuable as it was in the past. The odds of selecting a player that can greatly benefit their team has leveled out relatively, regardless of how bad their record is.

If the NBA were looking to implement a permanent fix to their tanking problem, they have failed. However, that does not seem to be the NBA’s intent here. This appears to be the first incremental step in establishing comprehensive draft lottery reform that will not incentivize losing on purpose, while still benefiting the worst teams. Evaluate the new lottery rules with the newly established fines for teams resting health players, and the direction in which the league wishes to head is clear. The NBA wants to maintain a high quality of basketball throughout the entirety of the 82-game regular reason.

Going forward, continuing changes to the NBA’s draft lottery format can be expected as teams begin to find the best ways to navigate through these new rule changes. Upcoming changes will be slow and systematic. The last thing the NBA wants to see is a decline in competitive fairness. These changes, designed to prevent tanking, must not get into the territory where it puts bad teams in an almost impossible position to turn their franchise around. The NBA did not come to a tanking solution when imposing these lottery rule changes, but they have successfully decreased the analytical value of tanking and opened up the door for more expansive draft lottery changes.

[1] “Adam Silver Explains the New Changes in the NBA Draft Lottery,” Highlight Central. Sep. 28, 2017.

[2] Paine, Neil. “Say Goodbye To The Old NBA Draft Lottery — But Probably Not To Tanking,” FiveThirtyEight. May 15, 2018.

[3] “Adam Silver Explains the New Changes in the NBA Draft Lottery,” Highlight Central. Sep. 28, 2017.

[4] “NBA Board of Governors approves changes to draft lottery system.” Sep. 28, 2017.

[5] Id.

[6] “Adam Silver Explains the New Changes in the NBA Draft Lottery,” Highlight Central. Sep. 28, 2017.

[7] Id.

[8] “Value over Replacement Player.”

[9] Paine, Neil. “Say Goodbye To The Old NBA Draft Lottery — But Probably Not To Tanking,” FiveThirtyEight. May 15, 2018.

[10] Id.

[11] “Dallas Mavericks and the NBA,” 247Sports. Feb. 9, 2017.


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