Combining The Wheel and Rookie Free Agency is the answer to the NBA’s draft problem

The NBA recently changed the lottery odds to flatten things significantly, which was meant to discourage the sort of large-scale tanking that we saw from the Philadelphia 76ers in the middle of the 2010s. The fact that it worked so well for the Sixers and they should be one of a few title contenders for the next several years spurred the league to take action in order to discourage teams from following the same path. By lessening the odds for the top teams and drawing more teams from the lottery system, it gave teams at the very bottom of the league a lesser incentive to tank from beginning to end, though there is still great incentive to do so later in the season. Since the NBA draws four teams from the lottery system, the worse a team’s final record is, the lower their downside risk is – the team with the worst record in the league can only fall as far as fifth, whereas the third-worst team can fall as far as seventh, even though both teams have the same odds for obtaining the first pick.

One idea to eliminate tanking for draft picks altogether is the Wheel, an idea that has been around for several years and has some support. Zach Lowe first wrote about the Wheel for Grantland (RIP) in 2013 and followed up a year later with an update, right as the 76ers were in the middle of one of their tankiest seasons. The league responded to tanking by flattening the lottery odds rather than making wholesale changes to the draft, as those changes could have had far-reaching consequences with which they weren’t ready to contend at that point. The Wheel isn’t dead, but the NBA is currently assessing how the new lottery odds affect the league before making larger changes.

Of course, any massive change like this would come with complications, one of which is future picks that have already been traded. At the earliest, the league could not make this sort of drastic shift until 2026, when picks that have previously been traded will convey.

Further changes wouldn’t just eliminate tanking altogether but make it actively important for teams to compete throughout the season. Getting rid of the draft could be the answer to the NBA’s tanking problem, as teams that fire up the tank would have a hard time convincing rookies to come play for them, whereas a team that did their best down the stretch could pitch a potential rookie on that player being the answer to what ails them.

There’s been some talk about dumping the draft and putting the incoming rookies into that year’s free agent class with the rest of the veterans. Stan Van Gundy was supportive of this idea two years ago when the league announced it was changing the lottery odds. Van Gundy addressed the chief concern of getting rid of the draft – what happens when the best players all want to play in Los Angeles or New York or Miami? Wouldn’t that leave the smaller teams behind? His response was that rookies might not be willing to give up the money required of them in order to play in one of those preferred destinations, particularly if the money was much larger elsewhere. There are also roster limits and playing time concerns for each team, which would make it difficult for one team to accumulate all the talent.

No matter how you slice it, getting rid of the draft and no longer forcing players to play for certain teams would make the league susceptible to larger markets dominating even more than they already do and make things even more difficult on smaller markets, who often rely on the draft in order to secure top-end talent. Van Gundy’s hope, as well as the hopes of all supporters of dumping the draft, is that rookies who haven’t made much (or any) money in their careers would prioritize finances over signing with the more glamorous teams. Of course, that may not be enough, as the glamour teams are often in cities that can significantly improve a player’s off-court earnings. Just ask Kyle Kuzma, who has become one of the key faces of Puma’s relaunched basketball brand due in large part to the fact that he plays for the league’s most famous team. Color me skeptical that Kuzma would have sniffed the sort of off-court success he’s enjoyed if he played in Charlotte or Orlando.

Getting rid of the draft may not be enough for the league to combat this issue. Instead, they could create an entirely new Rookie Free Agency to replace the draft.  Rather than lumping the rookies in with the rest of the veterans and letting them go through the same free agency process, Rookie Free Agency could be an entirely separate market, where teams have an allotted sum of money they are allowed to spend on incoming rookies.

Furthermore, each allotment would only be allowed to be spent on one rookie at a time, rather than split up among multiple players, to avoid incoming rookies teaming up to play together on a specific team, as happens in college basketball and other non-draft sports around the world.

The top allotment would give that team the most money to spend on a single rookie, while the bottom allotment would be the smallest amount among the 30 teams.  These “first round” allotments could follow the current Rookie Scale or could be shifted to give a greater disparity between the various allotments.

The “second round” would give each team the exact same allotment, but that allotment could only be used to sign up to one player and could not be combined with the “first round” allotment. There would be no difference between teams’ allotments in the “second round”, but the allotment would amount to more than that year’s rookie minimum, as there would have to be some incentive for players to sign up for these contracts rather than go in “undrafted”.

“Undrafted” players would operate in the same way they do now – a team could sign them to a two-year minimum deal or use cap space or another exception to sign them to a longer deal. However, a rookie who does not sign one a deal under one of the allotments in Rookie Free Agency could not go “undrafted” and get a big contract; their first-year salary would be capped at a lower value than the “second round” allotments. Otherwise, a player like Zion Williamson could go “undrafted”, then sign a massive deal using a team’s cap space that pays him more than the largest overall allotment would have.

There’s certainly an argument for allowing teams to aggregate their allotments in order to sign a single player to a larger salary, but there’s also a reason that the Rookie Scale exists in the first place. Both the current players and owners (the only two sides negotiating over the CBA) have an active incentive to suppress salaries for incoming rookies, so it stands to reason that both sides would agree on barring teams from aggregating their draft allotments. Additionally, the one-player-per-allotment rule would stop players from teaming up on the big-market teams and spread incoming talent throughout the league, something that will appeal to small-market owners.

It’s important to note that the notions of “first round”, “second round”, and “undrafted” would not actually exist; it’s just the easiest way to refer to the allotments teams would receive to sign these players. There would be no single night in which all of these players find their new homes; instead, rookie free agency would play out along the same timeline as veteran free agency, with extra exceptions available to teams to sign rookies. For example, an over-the-cap team would walk into free agency on July 1 with their standard mid-level and bi-annual exceptions, as well as two further exceptions – their “first round” allotment, which would follow the current Rookie Scale and would align with whichever allotment they had from the Wheel that year, and their “second round” allotment, which would be double the rookie minimum for that year. There would be no “undrafted” allotment, but any rookie who does not sign under a “first round” or “second round” allotment would sign as they do today: under cap space or under one of the over-the-cap exceptions. The only change to those players is that their first-year salary is capped at a number smaller than the “second round” allotment, to actively incentivize rookies to sign using the allotments.

Just like other exceptions, teams would be allowed to renounce these allotments in order to clear more cap space or sign a rookie to a lower-than-allotment deal that creates some extra flexibility. A team with near-max cap space who convinces a max player to sign with them will be allowed to renounce their rookie free agent allotments in order to clear that extra cap space, though it would obviously be preferable to trade them to another team in exchange for future allotments, if possible.

The length of these contracts would be up to negotiation with the players association. A “first round” allotment could be the same Rookie Scale contract as currently exists, or they could alter that deal to make it more or less team-friendly. Since the players would be getting to choose where they play, I wouldn’t imagine the owners would be open to making these contracts less team-friendly.

For simplicity’s sake, they could devise a system such that all of the “first round” allotments are the same Rookie Scale contracts as currently exist, all “second round” allotments start at double the rookie minimum and go for three years (with some sort of non-guarantee or team option on the third year), and all “undrafted” players cannot sign a deal that pays them more than 150 percent of the rookie minimum in the first year.

Perhaps such a system would come with changes to the restricted free agency system, but that’s an argument for another time.

Each “first round” allotment would have a different value, which is where Rookie Free Agency and the Wheel coincide – rather than the Wheel deciding in advance which draft pick a team receives, the Wheel decides each team’s future Rookie Free Agency allotments. The worst teams in the league would no longer be guaranteed the top allotments and all teams would know well in advance what their allotments are going to be, allowing them to better plan out their future.

Because of the Wheel, there would be no need for protections or anything of that nature; a team knows in advance exactly what their allotment is going to be, so there’s no need to protect themselves in case that allotment rises or falls with their fortunes the year before. Teams could trade their allotments just like they trade draft picks now, except there would be no convoluted protections and the allotment would convey in the year it was agreed. Both teams would know exactly what the allotment value is and when it’s changing hands, making it much easier for teams to plan long-term.

Each allotment would stand on its own and could not be combined to sign a single rookie for more money. Acquiring a second allotment is therefore like acquiring a second draft pick, in that it gives the team the chance to sign another rookie. It also comes closer to ensuring that 30 players are signed using the 30 allotments, though teams would not be absolutely required to use their allotments in full. If a team has a $10 million allotment and they don’t want to use the entire thing on any available player, they can use part (or none) of it, should they see fit, but that money does not get rolled over to the next year and essentially disappears.

Because young players on cost-controlled contracts with restricted free agency at the end are so valuable, I don’t think we would see a lot of teams, even those with massive cap space, forgo their allotments in favor of extra cap space. Those allotments would be nearly as valuable as current-day draft picks and teams would much rather trade them for something of value (a player making less money or a future allotment, perhaps) than let them expire completely unused.

A coinciding change would get rid of the Stepien Rule and allow teams to trade whatever they wanted with respect to their allotments, regardless of whether they’ve traded other allotments or not. Draft picks and cost-controlled contracts are properly valued by clubs and the Stepien Rule should be made a thing of the past, whether the league adopts Rookie Free Agency or continues with the current draft system.

The Wheel alone creates the opportunity for one of the best teams in the league to have a top pick, which is the biggest fear among those opposed to the idea. Combining the Wheel with Rookie Free Agency would mitigate this in some small way, as even giving a great team the top allotment does not guarantee that the best player in that year’s rookie class will want to play for that team. A team further down the pecking order might have a larger role to offer, even if the player would take less money to go there, or a brighter long-term future. It would still happen that a great team would receive a top allotment and get even better, but because the allotments are known well in advance, that would be part of the planning process for each team. Great teams usually do not have much in the way of financial flexibility to add to their roster, but if a team timed their rise up the league’s standings with a top allotment coming their way in a few years, then there could be no argument that they got lucky to sign the best player in the incoming rookie class – they planned it that way from the start!

Replacing the draft with Rookie Free Agency would also rid the NBA of the moral quagmire the draft generally presents, as players who are drafted have no say over where they are picked and are essentially forced to work for a specific employer in a specific city with very little control over the process. They can direct their agents to reveal medical information to certain teams or only work out for the teams they want to draft them, but the fact of the matter is that they don’t have the same control over where they spend at least the first five years (four years on a rookie scale contracts, plus one qualifying offer year at a minimum) of their professional careers, unlike nearly every other profession. While this won’t be a driving force for getting rid of the draft, it would be a nice side effect.

Getting the owners and players to agree on such a massive change to the system would take some doing. The owners would worry about how this new system would potentially benefit the big-market teams and create more imbalance between the haves and have-nots. The players would want to know exactly how the allotments are calculated, how those contracts are negotiated, and what guarantee they would have from the owners that they would actually use the allotments in the intended way. Even the cheapest teams in the league use their draft picks and (usually) sign their first-round picks, but under this allotment system, there would be no guarantee that a cheap owner would use his allotment.

Comprehensive draft reform is a difficult negotiation because there’s a significant party missing at the negotiating table. The current players have no active incentive to raise the salaries or other benefits for future draft picks, as every dollar those future players make takes away a dollar from the current players. There’s a finite amount of money in the players’ half of BRI each year, so the players who actually negotiate the CBA would like to keep as much of the pie for themselves as possible. The owners have a similar incentive – they don’t want to pay outsized contracts to young players who haven’t proven anything yet. That was the entire point of the Rookie Scale in the first place. When both sides are incentivized to lessen the salaries and flexibility of incoming future players, it makes it very difficult for the two sides to come to an agreement on a system that would potentially pay incoming players more money than under the previous system AND give them more flexibility in terms of which team they pick, rather than the team picking them.