HoopIdea: The [REBUILDING] tag

tanking state warriors

Tanking exists to avoid contraction. Can we be completely upfront about that? If we didn't have a system that could bail out a team that is legitimately doing horrible, then teams that are horrible would tend to remain horrible. And teams that remain horrible are the first in line for contraction, relocation, and long-term disrespect and franchise deflation the likes of which tanking strategically can never bring them. Sure, horrible teams would have some natural pressure towards the mean and 41 wins, but in the "meantime" would also have plenty of opportunities to fall into historic and un-climbable holes.

Fundamentally, this is a worse state of affairs than what we have now. If we did something to eliminate tanking, then we might have teams competing hard for 1,230 games today, this season, but teams on the verge of historical, long-term awfulness would tire out as the lack of cushioning their bad seasons would begin to wear them down. A bad team might even over-play its best players and trade assets to the point of injury and be left with nothing, even if all the stars would have otherwise aligned. You can't simply eliminate tanking and leave no options for the teams with bare cupboards. That said, tanking is a problem and it hurts to watch those teams. And it's a negative externality: teams may pay a price when they tank, but a tanking team hurts the league as a whole more than the team loses itself.

So, after thinking on it for a while, I've come up with an interesting idea that could retain the opportunity-for-betterment that tanking brings without sabotaging league-wide play. Let's talk about the "Rebuilding Tag."

• • •

The first key component of this idea could come to pass in the next round of T.V. negotiations. Enough experience with the national schedule has convinced me that we should adopt the NFL's approach to flexible scheduling as the next TV contracts are negotiated. That is to say, halfway through the season, national networks could become flexible and select games of a pressing interest for the national slate. This would eliminate terribly uncompelling late-season matchups with out-of-contention teams while fun and important games by surprise contenders are broadcast locally. It might help to eliminate something in the future like Rest-gate last year, where the Spurs sat 4 of their best players against the Heat, by allowing Spurs Coach Popovich to tell the league and the networks of his plan to rest players in advance of that matchup. Flexible scheduling would give the networks a chance to slot a better game there instead (granted, that game was awesome).

In addition to flexible scheduling, I'd add a wrinkle that would allow teams to demonstrate their competitive need. Here's the plan: At the beginning of every month (starting with the September before the season), NBA teams can apply to the league office for a [REBUILDING] tag if they reasonably expect to win fewer than some threshold of games for the remainder of the season - say, 34 wins for the whole season, but adjusted and prorated as the season goes on (28 of your last 66, 21 of your last 50, etc.). Probably you'd make the threshold a bit lower, but the point is that right now, it's a threshold set such that there is not much incentive in exceeding the threshold - there's not much difference between a 25-win team and a 34-win team as far as the most relevant and important teams are concerned. Anyway, so if a team applies to the league office, and their claim of haplessness is accepted, they are marked for the rest of the season (barring an unlikely turnaround) as [REBUILDING]. Like a giant red stamp that will haunt TV Guide schedules and blog logos everywhere, the [REBUILDING] tag on franchises carries with it one basic obligation -- pay a bunch of money to the teams you're playing against.

Okay, not a bunch of money, but pay a fixed fee of 5% of the gate revenues from a sold-out regular season game (the league could figure out a calculation)... per game of being in [REBUILDING] mode. That isn't a whole lot of money, but here's the rub: you don't expect to sell out regular season games when you're rebuilding, so 5% of a full house probably amounts to a solid 10-20% of your gate revenue. And it's essentially all going to your opponents' franchises while you have the [REBUILDING] tag. It's a lot of money, and yet, at maximum it's 5%*82... or 4.1 sold-out games of gate revenue... it's not crazy. Say an average arena has 30,000 capacity and an average league ticket price is $100 bucks. 30,000*$100*4.1=$12.30 million per year.

This money isn't crazy for most owners, especially considering that tanking teams who are operating on a skeleton crew often pull as much of a profit as low-tier playoff teams. And, it's a zero-sum game for the league as a whole - you might be [REBUILDING] this year, but in a couple years you might be contending and getting back what you paid in. This money would serve as a sort of Pigovian tax to correct the negative externality: That is, the money would compensate teams that have to play less-televised, less-profitable games against the [REBUILDING] team, given that the non-[REBUILDING] team provides an increasingly large share of the justification for fans that come out to see the losing team. From the vantage point of the [REBUILDING] team, they are signalling their need of rejuvenation through the draft. This tag, while embarrassing and costly, would give them extra lottery balls - we'd have some system where a team in [REBUILDING] mode would bump its draft position slightly, by, say, an extra notch per month of [REBUILDING] tag application compared to a team that is completely out of this mode.

It's embarrassing to be [REBUILDING], but it's less embarrassing to be [REBUILDING] away from nationally-televised games (as the flexibile schedule would allow the league to focus the national games on teams that are competing). The sooner a team commits to the tag (or commits to try to win that season), the better the national schedule can be, and the more the league can charge for TV rights.

A few details:

  • This isn't really a disincentive for tanking - it's a disincentive for tanking disingenuously. If you're truly not in rebuilding mode, then it's a good deal for you. Say you're a perfectly well-constructed roster. You can have a shot at the 7th pick in a random lottery and the gate revenue from the teams that are tanking. If you are in rebuilding mode, you should be willing to compensate other teams for your negative externalities. Not as a punishment for those externalities, but as a system that costs you dearly in the short-term in exchange for long-term success.
  • Fairly technical note, and the main reason for the late edit: Aaron and I have had a fairly long discussion since the initial publication of this article about what exactly the lottery-ball consequences of this idea should be - Aaron's idea was to have a tiered system, with the teams that have been [REBUILDING] since September getting the top tier of picks, teams that have been [REBUILDING] since October getting the next tier of picks, and so on until you're left with the non-[REBUILDING] franchises in the final tier. And, within tiers, you have a miniature lottery to determine the order. So the most desperate teams will all pick first, then the second-most-desperate, and so on. While this is very cool (and, as Aaron noted to me, much more likely to be accepted by late-seed playoff teams who suddenly might be in the running to get the 13th pick randomly), I'd suggest a couple of tweaks:
    • I tend to think that a team with 48 wins and misses the playoffs should get something like the 15th pick, instead of potentially getting the 30th pick! Even though player evaluation after about the 15th pick tends to be a lot more like a crapshoot anyway, we should still have some checks in place to prevent that situation - maybe for the non-REBUILDING tier you'd have a traditional reverse-order-of-records system.
    • I also don't think any team should be able to get a free pass at a generational talent just because it was the only one that was desperate from the start of the year. So, basically, I'd modify Aaron's tier-based idea to be slightly less strict (maybe lump three-month REBUILDING tag windows like Sept.-Nov. together). And maybe allow a less desperate team (say, that's been REBUILDING since December) an outside shot at the first tier of picks... Other than that I like his approach.
  • If the league feels the REBUILDING tag is being abused, it can revoke the tag immediately for certain teams.
  • Teams with the tag have the same amount of medical oversight as teams without, but they will face less scrutiny for sitting players, both naturally by not being televised but also institutionally by not being hassled. It is understood that they're losing, but their internal decision-making can be given more free rein. These teams will be encouraged (and given league support) to experiment with personnel, strategies, scouting, and management.
    • You say "But what if they're sitting their best players, Alex?" What, you mean so that they could potentially trade them and make the playoffs better? What a travesty!

All in all, I don't really know how effective this idea would be to ameliorate tanking and the NBA's nigh-unwatchable March Miasma. But I wonder if a [REBUILDING] tag wouldn't embolden teams to try enough new things and be on-the-level enough to create some good stories, interesting subplots, and sort of a "We've paid our dues, now let's play our hardest because losing doesn't provide as much additional incentive in the draft." vibe to those kinds of rosters. I don't know.

But even if this idea doesn't work? Then the teams that are tanking are at least paying into the system and we're not televising them. And no one is under any illusions as to what they're getting when they buy season tickets or go to a game featuring one or two of those teams. That's considerably more than half the problem of tanking solved right there.

Tweak the numbers as appropriate; this is a back-of-the-envelope, intuitive idea. I couldn't find any analogue to this anywhere else, but, to be fair, I didn't look very hard.

Update (7:30 EST): Edited the lottery detail-bullet to take into account a later discussion Aaron and I had. -Alex

3 comments on “HoopIdea: The [REBUILDING] tag

  1. I love the idea (in theory), but it seems like a really fine balance would have to be struck between payout costs, the lottery ball incentive, and the benefit of declaring before/after another team with the same overall record. If the balance isn't struck, there might be a number of financially well-off teams that would just declare immediately in order to get a leg-up in the draft. The Blazers, for one, would probably declare immediately and then just play as they would have without the tag. Basically, it could end up as bad luck insurance for wealthy teams. Which is to say, I wouldn't be comfortable with the league allowing or denying tag applications, I feel like the monetary penalty would have to be higher, or there would have to be some kind of strict, numerical way of deciding if a team were eligible.

    On an unrelated note, I think it was an Aaron, but thank you for linking to Achewood. I've fallen in love over the past 5 days, and it's all thanks to your link.

    • Absolutely. That's a fair point, and one problem with this idea is not only the disparity in wealth from owner to owner but from year to year. This is looking like a boom couple of seasons for the NBA with the NFL problems, the growing sentiment against the NCAA (both potentially long-term and gigantic), and the new TV deals. And if a year of REBUILDING costs not 12 million but 50 million? Yeah, then suddenly there's a different conversation. Balance is huge, because you're right, we don't want the wealthiest teams to dominate this arrangement as insurance.

      In general I'd say Aaron and I are quite conservative about changing the current system because it's sort of a "devil you don't know" situation in terms of perverse incentives. Even though tanking is bad, there is a sort of stable, controlled badness to it, and knowing the badness is half the battle. Contraction and the small markets and relocation? Those like the most fundamental problems the NBA faces now, and tanking is a "good problem" in comparison, though it certainly hurts the product.

      Also, RE: achewood, we're both big fans of it. It does tail off tremendously somewhere after the Great Outdoors Fight over those next three years. But damn, what a run from start to GOF. And if you're not there yet, you're certainly in for a treat.

  2. Why not a fully randomized lottery for teams not making the playoffs? Equal weight for all? The terrible teams are still going to get good (though not always great) picks to keep them from the basement syndrome (barring acute mismanagement), but now you have no incentive to tank.

    Either make the playoffs or have the same odds as everyone else.

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