Fix tanking: Grade on a curve

Memphis Grizzlies consultant and BasketballValue.com founder Aaron Barzilai got to talking about HoopIdea and tanking with his friend Mike Martin. As a management consultant, Mike designs incentive compensation plans for sales teams in pharmaceutical, high-tech, insurance and the like. As he explains, a lot of what works in rewarding sales teams could work in handing out draft picks:

Like NBA teams and markets, few sales forces have the same profile. Some may have a lot of customers while others have a few, and some may require a lot of travel while others have very little. As a result, there is variation in the opportunity each sales rep has -- not every territory is created equal. Similarly, not every NBA team should be expected to win 50 games at the start of the season. In addition, most reps or teams have a pretty good sense of how they will end up before the season even started.

We use those expectations to set individual goals, and judge their individual performances accordingly.

Once a goal is set, the reps are paid based on what percentage of the goal they achieve. This is known as Attainment or Attainment Score. By paying on Attainment Score, a rep needs to be selling for the whole year to meet their annual goal. If they want to have the biggest paycheck (or a team wants the top draft pick), they have to exceed expectations.

Would NBA owners go for it? It's essentially the same approach the owners applied to revenue sharing this offseason. Why not also apply it to the draft?

HoopIdea on tanking

How Goals Would Work

There are a variety of techniques used to set goals, accounting for a complicated range of factors. The league could invite a committee of John Hollinger, Kevin Pelton, Dean Oliver and other analytical experts to set the goals using their models. Another approach would be to "crowd source" the goals. The goals could be developed by surveying the teams (presumably the GMs), but there is another set of widely available crowd sourced goals for each team before the season begins: Vegas over/unders.

While not perfect, they do in theory take into account all the available information on each team just before the season starts. For this article, we’ve used the pre-season over-unders from SportsMemo. As an example, Miami was predicted to win 50.5 games. The latest Hollinger prediction has Miami winning 48. 48 divided by 50.5 = an Attainment Score of 95 percent. Currently, the Heat are on pace to perform slightly below expectations, which would put them a bit later in the draft, but not as late as, say, the Mavericks, who are on pace to finish with about ten fewer wins than projected by betting lines.

No more tanking

Sacramento, Toronto and Charlotte were all predicted to be pretty bad. The over/under for all three teams was predicted to be 15.5 wins each. However, as you'll see in the table below, Toronto and Sacramento are predicted to win 23 and 22 per John Hollinger’s predictions. They have significantly exceeded expectations and would be rewarded for that with the first and second picks in the draft.

Charlotte, on the other hand, actually leads the league in underperforming expectations. With only nine wins predicted, Charlotte’s on pace to attain just 58 percent of their goal, last in the NBA.

If we want to reward teams for exceeding expectations instead of poor performance, shouldn’t Sacramento and Toronto have the opportunity to draft ahead of Charlotte? At the same time, rewarding teams this way would make it in the interest of Charlotte, Sacramento, Toronto, and every team to win every game. In the case of Charlotte, the good news is that they would still have a little time to turn things around -- every win would equate to 6.5 percent improvement in the score that would determine their pick. They don't need to be world beaters, they just need to exceed modest expectations.

An escape from the treadmill of mediocrity

Neither Utah nor Indiana is expected to contend for the championship, but both are firmly in the playoff hunt. Shouldn’t they be rewarded? Under the current system, they are stuck in a sort of “No Man’s Land” where they are not quite bad enough to make the lottery and draft a true impact player, but never really mentioned as a true contender.

In this plan, things would be different. Both teams are exceeding expectations nicely, and thus would move up in the draft. Utah would move up from the 12th pick to the third pick. Indiana would move up from 26th to 11th.

Top teams still have a chance to replenish

San Antonio and Chicago are playing great basketball this year, above and beyond high expectations. As a result, both teams would draft in the top 15. An interesting wrinkle is that even once their playoff seed is locked in with only a handful of games remaining, they would still have an incentive to win every game as it will affect their draft positioning. This approach would increase the meaning of the regular season and could affect the calculation of when to rest star players.

In conclusion

A goal-setting approach is not perfect, and there still is much that would need to be refined before such a system would be implemented. If there is concern that the high goals alone do not limit how high good teams can pick, there are wrinkles that could be added. Two examples: this system could be applied not to all 30 teams, but just teams missing the playoffs. It could also be used as a weight to influence traditional draft order, instead of a replacement.

However, changing the incentives does seem like it would reward the behaviors that HoopIdea wants to encourage. While it might make it harder for poor teams to "Sell Hope," there’s still opportunity for bad teams to significantly outperform expectations. Bad teams could still build momentum from season to season, and even within losing seasons.

The new draft order

Here is the full list of NBA teams with their pre-season over/under, as a goal, and their degree of success in meeting it, using Hollinger’s predictions as of April 9.