A Critique of the Amateur Player Draft in Professional Sports

Keith R. Thompson,

December 21, 2007

Professional sports in America today is almost unthinkable without the annual rituals known as the Draft. The NFL's version of the annual College beauty pageant, replete with its talent shows and evening gown attire, is such a spectacular event that it consumes over two days of primetime viewing and many more months of pre-draft festivities. Meanwhile the NBA's version is no less compelling, if only slightly less grandiose, despite its measly 4 and a half hour length. However, where did this concept come from, and is it good for the modern games.

History of the Professional Draft in the U.S.
The first ever pro sports draft of amateur talent to be held in the U.S. occurred in 1936 when Bert Bell - then owner of the Philadelphia Eagles - spearheaded an effort by NFL teams to select the top college players in an orderly manner. This meant that the teams with the worst won-lost record the previous season selected first, thus ensuring that they would have the best opportunity to acquire the top prospects, and instantly improve their teams. The reasoning was simple; it was thought that the earlier process of signing college players directly as free-agents was making the top teams even stronger and created considerable disparity in the NFL. However, this was not the first ever sports draft to be held in the country. Baseball, through its minor league system, had been practicing some form of draft and player allocation since about 1921. This was known as the Rule 5 Draft and it occurred during Baseball's winter meetings by allowing teams to add players to their 25-man roster for the following season from other teams' minor league farm systems. This was incidentally how the Minnesota Twins were able to eventually acquire pitching ace and former Cy Young Award winner Johan Santana from the Houston Astros in 1999. Nevertheless it was not until 1965 that Major League Baseball instituted an amateur draft that selected High School and College players to stock their minor league system. Meanwhile professional Basketball, through the Basketball Association of America (precursor to the NBA), established an amateur player draft in its initial season in 1947, and the National Hockey League instituted an amateur player draft as early as 1963. So what were the key drivers accounting for the post-war proliferation of the Draft among pro leagues? And has it been successful in leveling the playing field among the various teams?

Benefit of the annual Drafts
The desire to reduce the gap between the best and worst-performing teams in the league has generally been heralded as the primary factor most responsible for the escalation of the draft among professional sports leagues. The arguments for that have been well documented though not conclusively proven, however. Fortunately for us enough data points exist, particularly from the NBA, to help us answer these questions. Throughout the NBA's history there have been three distinct Draft scenarios that teams operated under. First there was the territorial draft whereby teams could select a local talent who played college ball in their city. These teams would then forfeit their first-round draft choice in exchange for selecting a Territorial pick. Nevertheless, it was believed that this was a great bargain for the NBA teams since many of the top college players of the day had huge fan bases which was expected to flow over to their new teams. One of the most famous players to be selected under these rules was Wilt Chamberlain who was selected by the Philadelphia Warriors while he was still a High School athlete in Philadelphia. This system lasted from 1947 to 1965. Then in 1966 the NBA instituted a coin flip between the last-place finishers in each of its two divisions to determine which team would open the draft. The remaining teams then picked in reverse order of their won-lost records. Finally, in response to allegations that some teams were intentionally losing their games towards the end of the season in order to get a higher draft position, the NBA established a Draft Lottery whereby teams that did not make the playoffs had an equal chance of landing the first draft pick. This was subsequently changed to provide teams with the worst record a greater chance of winning the top pick. Patrick Ewing became the first player to be selected under these draft rules, when the New York Knicks made him the first choice in the 1985 Draft.

Performance of the NBA Drafts
The current NBA Draft Lottery system is probably the best system available to determine whether the actual Draft process really works. This is because it creates a tier system for the draft prospects into high-value (lottery picks), and "super high-value" (top-three selections). In addition, unlike the NFL or MLB where teams may select players based on specialized skills like quarterbacking or pitching, the NBA primarily selects the best available talent left on the Draft board.

Since the NBA's Draft Lottery has been instituted the Los Angeles Clippers have earned the most Lottery picks (18) between 1985 and 2006, with 7 of those picks being top-three draft selections. This is 3 picks more than the second-placed Golden State Warriors team. Nevertheless, the Clippers have consistently set the standard for mediocrity, only making the playoffs 4 times during that stretch, and on none of those occasions did they proceed past the first round. In comparison, the Los Angeles Lakers had the fewest lottery picks since 1985 (2) and also possess the most playoff appearances over that time, and the second most championship successes (5).

To be fair, a number of factors could have conspired to produce these seemingly contradictory results, like the poorer-performing teams consistently drafting the wrong players. The evidence on that, however, appears contradictory at best. While the NBA's Rookie-of-the-year award has been won by a lottery pick in 21 of those 22 years (Mark Jackson in 1988 being the sole exception), only 33 of the 66 top-three draft picks between 1985 and 2006 would eventually be selected to at least one all-star team, and in only 59% of those years was a top-three draft pick awarded the coveted Rookie-of-the-year prize. It therefore seems clear that while the right players are being selected in the lottery phase of the Draft, they may not necessarily be selected in the right order.

Are the Los Angeles Clippers an anomaly? Consider this other case: since 1985 the Michael Jordan-led Chicago Bulls has won six NBA titles - most over that span - though none since MJ left the Bulls in 1998. And in the nine years since Jordan's departure the Bulls have had 8 lottery picks, with 4 of them top-three selections (the most in the league in both categories). During these last 9 years, however, the Bulls have only made the playoffs on 3 occasions. Despite selecting the likes of Elton Brand, Kirk Hinrich and Ben Gordon in the Draft it wasn't until they acquired players on the free-agent market and via trades that the Bulls were able to win their first playoff series since MJ, defeating the Miami Heat in 2007. Apparently, using the Draft as a vehicle to equalize talents across teams hasn't proven to be very effective within the NBA.

If therefore the Draft is not an effective tool to equalizing talent within the professional leagues, is there another method that has worked and should be considered?

In world soccer most leagues employ a penalty and reward process to motivate their teams. Those teams that perform poorly and end the season at the bottom of the standings are relegated to a lower League, while lower league winners and top performers are promoted to the higher "Division". This has served as a powerful incentive for teams to avoid losing games towards the end of the season, and in fact has forced them to be more aggressive in seeking wins in order to avoid relegation. North American professional sports may not have the league depth to employ this relegation and promotion strategy, but it should remove the incentive associated with teams intentionally losing games towards the end of the season in order to secure a more valuable draft pick.

Opening up amateur talents (namely College athletes) to a free agency model whereby any team can sign them if they can agree to a contract will help to solve this problem. The fear that player contracts will now escalate out of control under this scenario seems somewhat unfounded. After all, veteran players are eligible to sign on the free agency market, and that hasn't crippled many teams finances in any meaningful way. And those teams that will become reckless and sign rookies to larger deals than many of their own proven veterans, well then they will just have to learn that sports still entails making responsible business decisions.

The Draft may be a fashionable exercise that gets pundits in the game but it does not appear to be beneficial to the competitiveness of the game, or to the fans that support these games. These fans would be more likely to root for a team that is stocked with local talents that they have been following since their High School and College days, than they would cheering for a team that is only linked together by a common name and color. Likewise a Super Bowl, or NBA, or World Series Champion should not be penalized by being restricted from signing the best available amateur talents just because these players are first made available to losing teams. That is counterproductive to success, and it creates perverse incentives to fail. In the recently concluded 2007 NBA Draft in June a number of potential franchise players were available for selection. It was an absolute shame that the teams that have done so well in the playoffs, and made themselves championship contenders were not able to at least have a legitimate shot at acquiring any of these players. Let's not punish success via the Draft. It is not the
American way.


2007 PER Sports, Inc.

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