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Some simple lottery changes would remedy what ails NBA

By Steve Kerr, Special to NBA.com
POSTED: Aug 12, 2013 11:25 AM ET

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With a few tweaks to the lottery, competitive balance in the NBA might be closer than we think.

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David Aldridge's Monday morning column, The Morning Tip, is on hiatus. Before he took off, Aldridge asked for volunteers to fill in while he's away. This week, it's Steve Kerr's turn.

Kerr, known today as an in-game analyst for Turner Sports' coverage of the NBA, has a deep NBA background as a player and executive. Before his broadcast days, Kerr played 15 seasons in the NBA as a member of the Suns, Cavaliers, Magic, Bulls, Blazers and Spurs. While with the Bulls, he was an integral part of Chicago's three-peat teams from 1996-98 and, as a Bull, led the league in 3-point shooting in 1994-95 (52.4 percent). Kerr also won two titles with San Antonio (1999 and '03) and made 726 3-pointers in his career.

Once his playing days were over, he became an analyst for TNT. After serving as an analyst with TNT from 2003-07, he was hired as the Phoenix Suns' president of basketball operations and general manager in 2007, a position he served in for three seasons. The Suns went 155-91 during that span and made the 2010 Western Conference finals, where they lost to the Lakers in six games. Kerr returned to Turner Sports before the 2010-11 season.

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In the last few seasons, the NBA has seen an influx of young, smart general managers who have looked at their respective rosters, studied their cap sheets, pondered their options and then boldly declared: "Let's stink for the next few years."

OK, so maybe GMs aren't using those exact words, but the point is clear: lose big and a team gets the best odds of winning the lottery and at least receives a very high, potentially franchise-changing Draft pick. I don't question the logic -- in fact, given the rules, it makes perfect sense. But I DO wonder -- is this what's best for the NBA? Should the league, in effect, reward teams for being lousy? (And in turn, punish teams for being average?)

Maybe it's time to revamp the lottery and create a system that actually encourages teams to win.

It's important to acknowledge that the original lottery was incorporated into the Draft in 1985 precisely to discourage teams from tanking. Before then, Draft order was determined just like the NFL's -- in reverse order of record. Ties were broken with a coin toss.

Draft HQ: Biggest Challenge

Tanking was blatant in the early 1980s, with transcendent talent entering the league seemingly annually. Hakeem Olajuwon, Michael Jordan, Ralph Sampson and Patrick Ewing all arrived as celebrated stars, just years after Larry Bird and Magic Johnson altered the course of the NBA forever with their immediate superstardom. Houston, in fact, was awarded the first pick in the Draft in both 1983 and '84 after going 14-68 and 29-53, respectively. Those picks netted the Rockets Sampson and Olajuwon, the original 'Twin Towers.'

The following year, after league-wide complaints about the Rockets' losing 'strategy', the NBA instituted a random lottery. In the then 23-team league, the seven non-playoff teams were all given the same odds of winning the No. 1 pick, with each of their team names basically being drawn out of a hat one by one, from 7 down to 1. That was the year the Knicks won the right to select Ewing, leading conspiracy theorists to create the 'frozen envelope' theory that Commissioner David Stern had fixed the outcome to put Ewing in the nation's biggest media market.

The random drawing was used for four more seasons, until 1990, when the NBA went to a version of the weighted system that is in place now. Over the next 12 seasons -- as the league grew by seven franchises through expansion -- the number of lottery teams jumped from seven to 14. The lottery odds were tweaked periodically to make sure the worst teams received the best odds to win, and were guaranteed a 'bottom-floor' pick.

NBA's current lottery odds
Pick Chances
1. 25.0 percent
2. 19.9 percent
3. 15.6 percent
4. 11.9 percent
5. 8.8 percent
6. 6.3 percent
7. 4.3 percent
8. 2.8 percent
9. 1.7 percent
10. 1.1 percent
11. 0.8 percent
12. 0.7 percent
13. 0.6 percent
14. 0.5 percent

With 14 teams involved, the lottery no longer assured a team a chance at a potential star. Picking seventh is entirely different from picking 14th, because in most drafts there is a big talent drop off after the first few picks. The weighted system was a good compromise -- bad teams weren't guaranteed the top pick, but they automatically received a very high selection.

As the league has evolved through analytics and smarter management, however, the weighted lottery system has revealed some flaws. Even without guarantees of winning the top pick, some GMs whose teams are stuck in mediocrity are playing the odds, stripping down rosters and embracing a rough couple of years in order to try to build their talent base through high picks.

The assurance of the 'bottom-floor' selections has led GMs to conclude (correctly) that losing can pay off in a big way. In the past few seasons, plenty of GMs have concocted entire rebuilding plans around, well, being lousy.

Draft Lottery Winners

After losing LeBron James in free agency in 2010, Cleveland has regrouped by hitting rock bottom and amassing four top-4 picks in the last three Drafts. They are now loaded with talent. Since it traded Dwight Howard before the 2012-13 season, Orlando is entering Year 2 of its own 'rebuilding' campaign. A 62-loss season netted the Magic Victor Oladipo, the second pick in June's Draft. With a couple of losing seasons ahead, Orlando probably has at least two more top 5 picks on the way. Philadelphia just traded away its 23-year-old All-Star point guard (Jrue Holiday) in order to begin a multi-year project that will guarantee tons of losses, but potentially a huge talent infusion through the Draft as well. (And remember, the 2014 Draft is projected to be one of the best in years, with several potential cornerstone players available).

Given the rules, this is smart, sound, strategy -- as long as a franchise's fan base can endure a few lousy seasons (and an owner can stomach a half-empty arena, too). Transcendent talent in the NBA is incredibly difficult to find, and historically, championship teams have at least two stars that were picked in the top five of their respective Drafts.

(Miami has five top-five picks -- James, Dwyane Wade, Chris Bosh, Greg Oden and Ray Allen -- on its roster. Juwan Howard, who may or may not be on next season's team, went No. 5 in 1994. Reserve Shane Battier went No. 6 in 2001. Before the 2012-13 season, Oklahoma City had three -- Kevin Durant, Russell Westbrook and James Harden -- but it traded Harden to Houston).

Teams that consistently pick in the middle of the first round rarely have the opportunity to draft superstar talent, and often get caught in the 'no man's land' of the NBA -- good enough to win games and possibly get to the playoffs, but not good enough to win a title.

So, in effect, if you're not an elite team in the NBA, it ultimately makes more sense to lose big than to try like hell to get better. In my mind, this isn't healthy. It sends the wrong message to players, teams and, most importantly, fans.

In European soccer and basketball, the bottom two teams in most leagues are actually relegated to a lower division the following season, thereby ensuring intense competition through the season's end. I realize that system wouldn't work in the NBA, but what if the league actually penalized teams for being horrible instead of rewarded them? What if the worst two teams in the league actually had LESS of a chance to win the lottery than the teams ahead of them in the standings?

What if a club that battled all season long to make the playoffs but barely came up short actually had better than a 0.5 percent chance of winning the lottery? If the lottery playing field was more closely leveled, would teams be less likely to embark on losing strategies? Would the competition actually get better at the bottom and middle of the league?

Board of Governors: Financial Issues

Part of my thinking in writing this column is that the NBA just endured a brutal lockout in 2011 that was based on creating 'competitive balance', as Stern and Deputy Commissioner Adam Silver continually reminded us during the painful five-month work stoppage. The goal was to create a level playing field where a franchise's success would be based on smart management rather than market size or payroll. The resulting Collective Bargaining Agreement, while still in its early stages, appears to be doing its job. Rich teams like Dallas, the Lakers, Chicago and New York are less likely to amass huge payrolls, fearful of the punitive luxury-tax implications. (Brooklyn is the outlier, obviously). Combined with revenue sharing and payouts to teams under the tax threshold, league payrolls are likely to be more closely in line with one another in the coming years.

Ironically, while there does appear to be more 'competitive balance' at the top, we're not seeing it at the bottom. Some bad teams are actually stripping off as much salary as possible and in many cases not signing free agents who could help them. The fear is that signing a couple of good players would actually reduce a team's lottery chances the following summer. Assuming those players weren't good enough to lead the team to an elite level, what's the point of signing them?

Instead, the smart teams would rather streamline their payrolls, play their untested young players and lose a ton of games, plotting for a big payoff three years down the road. Again, sound strategy under the rules, but not exactly healthy for the league in general. If teams are incentivized to lose, it hurts the overall product. Fans in every market pay big money for tickets. If you're a fan of the Sixers or the Magic, do you really want to sit through a few seasons of bad basketball waiting for those lottery picks to show up? Do you want to pay top dollar to watch a bad product?

How do you fix the issue? Given that the 'losing to win' strategy does appear to be working for teams, does the system need to be tweaked at all? There is no right or wrong answer, but I think it makes sense for the league to at least examine a few possible solutions. The NBA has always been progressive in its thinking and willing to change rules and policy for the betterment of the game. 'Competitive balance' at the bottom deserves a look. Here are a few possible solutions:

No. 1: Even out the lottery odds.

NBA Draft Lottery Process

Each lottery team gets a 1-in-14 chance of winning the first pick, a 1-in-14 chance of winning the second pick, a 1-in-14 chance of winning the third pick and so on through the fifth pick. The 'bottom floor' rule picks up from the 6th pick, meaning the team with the worst record in the league is guaranteed to pick sixth at the latest, the team with the second-worst record is guaranteed no better than the seventh pick and so on.

In this world, a team like Utah -- which battled the entire season and came up just shy of the playoffs -- would have a 5-in-14 shot of picking in the top 5. I think that would be a just reward for competing all season long and trying to win at a high level. Under the current rules, Utah -- in the 13th slot -- had a 0.6 percent chance of winning the lottery and a 2.2 chance of picking in the top 3. (In other words, what were the chances of Utah moving up from the 13th slot? About as much chance as Lloyd Christmas had of ending up with Mary Swanson in "Dumb and Dumber".) As for the really bad teams whose odds would suddenly be much worse to get a top 5 pick? Tough luck. No more handouts. And if you don't get lucky, make sure you draft well when you're selecting eighth or ninth. Since the new CBA is about smart management, not money, winning out, drafting well and player development has to factor in for every team. (And hey, if Brooklyn has to pay an $80 million tax bill for trying to win a title, with much of that tax money going to the bad teams, let's penalize the bad teams that don't TRY to win.)

No. 2: Reward No. 7 and No. 8 playoff teams more.

A cynic might say that the problem with Solution No. 1 is that if the last lottery team were given a better than 33 percent chance of receiving a top 5 pick, perhaps there could be tanking at the bottom end of the playoff ladder. (I told you this is a tricky issue!) As it is, teams that finish seventh or eighth in their respective conferences are often first-round fodder. (Milwaukee vs Miami last season, for example). To combat that possibility, the league could incentivize each of the eight teams that LOSE in the first round of the playoffs by giving them the top eight picks in the second round in descending order by record. Remember, picks 31-38 are extremely valuable in the Draft, given that second-round picks are not subject to the same salary scale as first rounders. In effect, those teams would have the opportunity to draft quality players and pay them minimal salaries on multiyear deals -- a huge benefit with the newer, tighter cap rules.

No. 3: Regulation to alter the lottery odds.

If you want to go with the extreme, European relegation-style format, take the teams with the three worst records in the league and reduce their lottery odds. In fact, if you finish in the bottom three, you are INELIGIBLE for a top-three pick. You will pick no higher than fourth. The other 11 teams in the lottery now each have a 1-in-11 chance at winning the lottery. You want the top pick? Fight for it!

No. 4: Deeper weighted lottery odds.

Cleveland Draws First Pick

Take the 14 teams in the lottery and weigh their lottery odds by their winning percentages against each other, with the best records getting the higher odds. If you want the best chance to get a high pick, you'd better beat the other bad teams head to head. I'd suggest some odds and percentages for each team in this format, but my head is already spinning. (Call Nate Silver. Actually, that was meant to be a joke, but if the NBA were to go down the path of lottery adjustments, it SHOULD employ economists and/or analytics experts to come up with the best formula).

No. 5: The "Entertaining as Hell Tournament"

Use Bill Simmons' suggestion of the 'Entertaining as Hell Tourney' in the final week of the season, with the winner not only getting the final spot in the playoffs, but a bump in its lottery odds as well.

No. 6: Rotating draft order?

You want radical? One current general manager actually proposed the following format to the league: The draft order rotates every year, 1 through 30, so that over a 30-year stretch your team will select in every possible slot. There is no lottery, no formula based on winning or losing. Socialism at its finest. Very interesting, and in many ways equitable. Of course, if your team picks first the year before or after the next LeBron comes around, you're waiting another 30 years for your next shot.

Maybe one of those solutions has some merit, maybe none of them do. Perhaps certain elements can be implemented into a new system. Or maybe the current lottery format is good enough, and the ideal dynamic for the league is for the worst teams to be given the best chance to replenish their rosters each year.

But I think revamping the lottery is an issue the NBA should at least examine. There are a lot of smart people running NBA teams who are plotting courses to be bad for a couple of years, and to me, it's just not quite right.

Call me old fashioned, but I want EVERY team trying like hell to win all season long.

NOTE: Here are the odds for each seed to get specific picks if there were no ties (rounded to 3 decimal places):

If you study this chart below, you can see that if you finish among the worst five teams in the NBA, you have a 99 percent chance of picking no lower than 7th. Conversely, if you finish 14th, there is a 98.2 percent chance you'll pick 14th. The blank squares show that you cannot pick at that spot due to the 'bottom floor' teams above you. The basic premise: if you don't finish in the top three, you revert to the order of the standings in reverse.

Seed Chances 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th
1 250 .250 .215 .178 .357
2 199 .199 .188 .171 .319 .123
3 156 .156 .157 .156 .226 .265 .040
4 119 .119 .126 .133 .099 .351 .160 .012
5 88 .088 .097 .107 .261 .360 .084 .004
6 63 .063 .071 .081 .439 .305 .040 .001
7 43 .043 .049 .058 .599 .232 .018 .000
8 28 .028 .033 .039 .724 .168 .008 .000
9 17 .017 .020 .024 .813 .122 .004 .000
10 11 .011 .013 .016 .870 .089 .002 .000
11 8 .008 .009 .012 .907 .063 .001 .000
12 7 .007 .008 .010 .935 .039 .000
13 6 .006 .007 .009 .960 .018
14 5 .005 .006 .007 .982

Steve Kerr played 15 seasons in the NBA and is former GM and president of basketball operations of the Phoenix Suns. Currently he's an NBA analyst for Turner Sports.

The views on this page do not necessarily reflect the views of the NBA, its clubs or Turner Broadcasting.

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