Tuesday, May 1, 2012

Tanking, Incentives, and the NBA Draft

Several years ago, Mike McCannanalyzed tanking on the Sports Law Blog (see posts here and here). More recently, ESPN’s TrueHoop blog had astring of posts devoted to tanking in the NBA. ESPN’s coverage included a discussion of emerging research by Adam Gold,a PhD student at the University of Missouri and President of Winning Unlimited,LLC.

Issues involving tanking overlapconsiderably with my own inquiry into competitive integrity andgambling-related corruption (more on that topic later this year), so I havefollowed the research line closely. Withthe close of the NBA’s regular season last week and non-playoff teams in thelottery set, Adam agreed to provide a guest post outlining a numberof important issues germane to incentive-based tanking that may occur late(early?) in the NBA season.

Adam’s guest post is below:

Mathematical elimination can be used as a mechanism to determine draftorder and maintain competitive balance in professional sports leagues. The worst teams are awarded the most games toearn the top draft picks. Teams areranked based on functions of winning. Here are a few key points from the 2011-2012 NBA regular season.

(1) The Charlotte Bobcats’ streak of 23 losses to end the regularseason 7-59 compromises the integrity of the NBA (and all professional sportsleagues that use reverse order drafts generally). There is an inherent incentive for teams tointentionally handicap themselves and limit improvement throughout theseason. Fans are asked to support ateam’s attempt to manipulate the NBA’s draft lottery. Inequities triggered by incentives to losethreaten the accuracy in identifying which team is the worst.

(2) The New Orleans Hornets and Washington Wizards could have ended theregular season playing for the first overall selection. The Washington Wizards could clinch the firstoverall pick if they beat the Miami Heat and if the Houston Rockets beat the Hornets. Games among the worst teams could have beenplayed with an intensity that parallels playoff atmospheres.

(3) In a desperate attempt to keep Anthony Davis out of their division,the Miami Heat play superstars LeBron James and Dwayne Wade in the final gameof the season in Washington. Miami’s dreamof a dynasty is threatened by the possibility that their division rival earnsthe first overall draft pick. The Heat reconsider the risk of entering theplayoffs with injuries and fatigue against allowing Washington a better chanceto get the top prospect.

Teams can be ranked based on functions of winning that give the worstteams the best chance at the best draft picks. Methods based on mathematical elimination shift the entertainment fromthe lottery towards games featuring the worst teams in the league. Supporting fan interest in their favoriteteams is more important than the attempt to award the first pick to the worstteam. Using my methodology, draft orderin the NBA for this year would be a function of the following:

A detailed video discussion of mathematical elimination draft ordersfor the NHL, NBA, MLB, and NFL, as presented at the 2012 MIT Sloan SportsAnalytics Conference, is available here. In the coming months, I will disseminate periodic updates via Twitterand can be followed at @WinUnlimited.