There are very few incentives for middling NBA teams to win games. In fact, losing a lot of games and getting a high draft pick is universally seen as the quickest way to rebuild a dull franchise.
The inherent nature of this five-on-five sport means that one player can have an outsized impact on the outcome of a game, so most teams believe that there is little reason to truly chase a title until a so-called star is in place. While acquiring big-name talent via free agency is an option (see what LeBron James is doing in Miami, for example), the better strategy is to use the draft.
For one, the player will be a lot cheaper. The NBA has a predefined set of rookie-scale salaries, tied to a player's draft position, so even the No. 1 overall pick is a bargain.
There is also long-term certainty. A player has a huge financial incentive to stay with the team that drafts him for the first eight years of his career.
If the player is completely miserable after the first four years, there is an escape route, but it requires him to pass up tens of millions of dollars while signing a short, one-year contract which means never recouping any of the passed-up salary should he suffer a catastrophic injury.
We have never seen a major star take that route.
As a rule, if a team drafts an All-Star-caliber player that it wants to keep, it can start building around him immediately with a good deal of certainly it will maintain long-term roster stability. And the team knows that it will get a salary discount on the first few years of its star's deal.
On the flip side, free-agent deals are limited to four years under the league's new collective bargaining agreement (CBA), and there is almost always a premium cost. In the past half-decade, there have been very few major-impact free agents in their prime signed for less than $10 million per season, for example.
Meanwhile, Damian Lillard, the Portland Trail Blazers soon-to-be Rookie of the Year point guard, is making just $3 million this season. Anthony Davis, the first pick in last year's draft, is making $5.1 million.
That may not sound cheap in an objective sense, but think about this: it cost the Phoenix Suns $6 million per season to acquire Michael Beasley in the offseason while the Boston Celtics paid about $5.5 million per year to pick up Courtney Lee last summer.
There are very few bargains in free agency.
This reality has been in place for years, but the new CBA, which was signed to end the lockout in December 2011, makes it even more vital for teams to watch how much they spend. Teams like the Los Angeles Lakers and New York Knicks rake in such huge revenues that the tax penalties for spending heavily, while severe, won't leave them poor.
But there are actually competitive restrictions placed on teams who recklessly dole out lavish salaries with no regard for their overall payroll.
Exceeding a certain threshold above the luxury tax can lose flexibility to sign any new players of impact since the league takes away ability to use the salary cap exceptions available to those that maintain some fiscal responsibility. The free-spending Brooklyn Nets, for example, will have a very hard time acquiring any free agents this summer.
Given all this, it makes a lot of sense to lose now and not pay later.
Whether you want to call it "tanking" or not, a lot of teams have gotten a lot better very quickly by losing a ton of games. One good draft can change a franchise forever.
The San Antonio Spurs, most famously, wound up with the No. 1 overall pick in the 1997 draft following a season in which they went 20-62. David Robinson missed all but six games with a back injury, and the result was a woeful team that was led in scoring by a 37-year-old Dominique Wilkins.
But then they drafted Tim Duncan, and—voila—everything was fixed. They went 15-2 in the playoffs on their way to a championship in Duncan's second season.
Very few tank jobs turn a team around this quickly. The Spurs' one-year stint down with the dregs of the league is not the norm. Generally, the rebuilding phase takes several years—and rarely does it end with the team hanging a banner.
More recently, the Seattle SuperSonics finished the 2006-07 season with a 31-51 record, fifth worst in the NBA, and ended up getting the second pick in that summer's draft. Their struggles were also rooted in injuries, as Ray Allen and Rashard Lewis both missed significant time.
The result: Kevin Durant.
Immediately, the team's two All-Stars became expendable, and it wasn't long before Durant was winning scoring titles in Oklahoma City after Allen and Lewis were sold off for spare part that could be used to build around the team's new star.
The Orlando Magic and New Orleans Hornets are now attempting to replicate the success that these teams have had bottoming out and then sling-shotting to the top. And they are taking tanking to new heights—or lows, depending upon your perspective.
Once they realized they would soon be losing the players that gave them a shot to advance far in the playoffs—Dwight Howard and Chris Paul—they gutted their rosters. They didn't want much in return, at least not in terms of players who have proven themselves capable of producing in the NBA.
They wanted cheap and intangible assets: young players with potential on cheap deals, draft picks and salary relief. These have become the holy trinity of coveted assets for a rebuilding franchise.
The Hornets did demand a proven commodity in Eric Gordon along with a package that added very little salary—or talent—to the team, but the Magic didn't even care to get any player back who would ever demand a max salary. Orlando just wanted some young players that would help them lose a ton of games, while gaining picks and salary relief.
That was the prize.
While these lose-then-draft-a-star success stories—and the yet-to-be-seen outcomes of the Magic and Hornets—are the types of case studies that support the in-favor rebuilding strategy of the day, they may also be very flawed. Because for all the examples listed, there are just as many of teams that have tried to tank their way to the top but instead just become permanent tankers.
This is something unemployed coach Stan Van Gundy elucidated recently during the 2013 MIT Sloan Sports and Analytics Conference in Boston.
He noted the dangers of just rolling out the ball and letting a bunch of young guys play 30 minutes a game, which is usually what happens after a team clears its roster of proven producers.
Van Gundy pointed toward the Washington Wizards after they were able to draft uber-talented prospects like JaVale McGee and Andray Blatche.
Historically, he said, coaches have been able to integrate young, inexperienced players into their lineups while—and this is the critical part—controlling their minutes. When they follow instructions, they get to play. When they don't, they sit on the bench until they understand the team concepts well enough to earn some minutes.
This teaches. This is how a young professional develops. This is how a prospect becomes a player, said Van Gundy.
When a team is tanking, however, this never occurs.
The coach could still conceivably limit a young players minutes, but what is the point?
First of all, he will get killed for doing so in the media and by the fan base and soon be out of a job. Second, since the team has gotten rid of all its veterans that actually understand how to play NBA basketball, there really aren't any other options.
And most importantly, the whole notion of holding a player out when he doesn't understand the system requires that there actually be a system in place.
A system isn't just a Princeton offense or a strategy for defending the pick-and-roll. It is a general way of playing the game that permeates everything the team does on the court.
It is about who is accountable for what in which situations. It is about how the team values possessions. It is about the understanding of when to push the tempo and when to force the ball into the paint.
It is a nuanced on-court culture that the coach spends every waking moment of his tenure trying to instill into a roster.
If 20-year-olds like McGee and Blatche are out on the court as leaders, along with a half dozen other players under 25 who have spent little time in primary roles on good teams, there is almost no chance that they develop into the players they could be.
Only the greatest players in the history of the sport can develop on their own, no matter what, regardless of whether a system is in place.
On the flip side, look at George Hill, now of the Indiana pacers.
Very few players who are taken 26th in the NBA draft pan out, particularly if they were unheard-of nobodies in college. If Hill somehow ended up on those Wizards teams with McGee and Blatche, he likely would have flamed out and been playing in Turkey right now.
Instead, he was drafted by the San Antonio Spurs, the best program available in the NBA. He developed into, probably, the best player he is capable of being. Perhaps his ceiling isn't even an All-Star (though he is still growing), but he is already very far beyond where he would be as a player if he hadn't have entered the league playing for the Spurs.
Coach Gregg Popovich, more than anyone in this league, has a system. A true system. The Spurs do things in a certain way, and Hill was slowly brought along within that world, picking up small nuggets of wisdom near everyday along the way.
Now, after moving on to a young Indiana team, he is a well-developed leader who has been able to relay those lessons to players like Paul George, Roy Hibbert and Lance Stephenson. David West, a pro's pro who entered the league in a position where he and Chris Paul could slowly improve within a good system led by Byron Scott, has brought a similar mentality to the Pacers' culture.
Without those two players around, it is unlikely that second-round picks like Lance Stephenson and Orlando Johnson could be contributors on one of the best teams in the league. And even Paul George's ascension might not have happened if he wasn't able to learn who he was as a player while concentrating on defense his first two seasons before becoming a centerpiece of an offense.
He sat half of his rookie season, then became a role player, then took on a larger role and now is the team's best player. Players who enter the league on a team that has spent the past few seasons creating a culture of tanking rather than a system for success rarely have that growth path.
Could JaVale McGee have done the same thing that Paul George has playing for a different franchise? It's an impossible what-if, and the still-young McGee might turn out to be a very good player yet.
But while it has become popular to think that tanking is the only route to rebuilding, the list of teams that started from the bottom and rose to the top is probably not long enough for the concept to have become the end-all, be-all method to turn around a franchise (particularly when you consider that some compelling research suggests that it hasn't actually worked that often).
Really, all we know so far is that tanking will get you high draft picks.
Whether or not it will help you develop those prospects into actual players or surround those players with a system that leads to success is still a great unknown.
All Stan Van Gundy quotes were obtained first-hand.