Breaking Down What NBA Draft Picks Are Really Worth

D.J. FosterContributor IJanuary 15, 2014

NEW YORK, NY - JUNE 27:  NBA Commissioner David Stern poses with the 2013 NBA Draft Class including Nerlens Noel of Kentucky, Victor Oladipo of Indiana, Otto Porter of Georgetown, Alex Len of Maryland, Ben McLemore of Kansas, Trey Burke of Michigan, Anthony Bennett of UNLV and MIchael Carter-Williams of Syracuse during the 2013 NBA Draft at Barclays Center on June 27, 2013 in in the Brooklyn Bourough of New York City.  NOTE TO USER: User expressly acknowledges and agrees that, by downloading and/or using this Photograph, user is consenting to the terms and conditions of the Getty Images License Agreement.  (Photo by Mike Stobe/Getty Images)
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As it stands right now, 10 teams in the first round of the 2014 NBA draft won't be picking with the selection they're supposed to. 

Think about that. A third of the league has completely traded or swapped their first-round draft pick.

While this year's highly regarded draft class has a lot to do with that, it's also a reflection of how the value of draft selections has changed. 

In today's NBA, if you want to acquire a star outside of free agency, you'd better have draft picks to deal. That's an absolute requirement. And if you want to rebuild your team? Better start stockpiling those picks.

For all intents and purposes, draft picks have become the currency of the NBA. Unlike cap space, every single team regardless of market size covets picks. Prospects can't discriminate like free agents or even players already on contract can. They play where they get drafted, and that's that.

And when it comes to time and money, two of the most valuable assets for any business, draft picks offer the best of both worlds. 

Take Indiana Pacers forward Paul George, for example. George was selected with the 10th pick in the 2010 draft. And for four highly productive seasons, the Indiana Pacers only had to pay him $10.5 million total.

For comparison sake, over 50 players in the league will make more in this season alone than what George did in four years. That's ridiculous value for one of the league's very best players.

Perhaps more importantly, the Pacers will be able to retain George for nine years total: four on his rookie deal and five on his new max extension. George never reached free agency, restricted or unrestricted, so no other team but Indiana (and the teams that passed on him in the draft) has had a chance at him.

Players on rookie-scale salaries are the best deals in sports for exactly that reason. There is no other way to control a player for up to nine years like Indiana can, with almost half of the contract coming at a ridiculous discount.

And you have to wonder: If the choice was his, coming out of college, would George have picked to play in Indiana? No disrespect to that fine state, but probably not.  

Drafting a player is simply the best way to acquire and keep talent. No player on a rookie-scale deal has ever passed on a max extension and then accepted a one-year qualifying offer (instead of signing a max offer sheet in restricted free agency) to become an unrestricted free agent the next year.

It has literally never happened.

So essentially, as long as you hit on the draft pick, it's smooth sailing for quite some time. Even if a player eventually makes a trade demand, like Carmelo Anthony or Deron Williams did, you're still getting massive value back in a trade, usually in the form of more draft picks or rookie-scale players.

Of course, with that being said, all first-round picks aren't created equal. What we've been seeing more and more of is teams using heavy lottery protection on their picks for multiple seasons to ensure they won't be sacrificing a top pick in the draft.

There's plenty of reason for that. 

Draft location matters: Out of 460 non-lottery picks from 2000-10, only 18 players made an All-Star or All-NBA team. That's 3.9%.

— D.J. Foster (@fosterdj) January 14, 2014


From 2000-10, 32 of a possible 140 lottery picks made an All-Star or All-NBA team. That's 22.8%.

— D.J. Foster (@fosterdj) January 14, 2014

Naturally, there are plenty of valuable players in the league who don't get selected to All-Star or All-NBA teams, but it gives you an idea of where the strong majority of elite players are taken.

And really, it's that hope of selecting a franchise-altering superstar that makes draft picks so appealing. Once the lottery balls stop bouncing, all but the very top draft picks lose a portion of their value immediately.

Trading for picks that aren't predetermined, however, is like buying a lottery ticket. There's always the chance, small as it may be, that you'll beat the odds and win big. 

But it's not just the hope of a star that makes picks valuable.

As we've seen over the years, teams can "draft and stash" players overseas, which is basically obtaining an asset for absolutely no cost.

SAN ANTONIO, TX - JANUARY 30: Tiago Splitter #22 and Manu Ginobili #20 of the San Antonio Spurs point down court against the Charlotte Bobcats on January 30, 2013 at the AT&T Center in San Antonio, Texas. NOTE TO USER: User expressly acknowledges and agre
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Although that's become slightly less prevalent, since there's the chance a player won't come over because he has a higher salary overseas than he would on his rookie-scale deal in the states, it's still a viable strategy, particularly for contending teams who may not have playing time or cap space available right away anyhow. 

Another factor is that, as scouting measures and analytics improve and trickle down to the college level, there will be an even bigger emphasis on acquiring draft picks. The more confident teams are they can avoid busts and get their picks right, the more they'll want extra chances to do so. 

Of course, draft picks will always represent risk as much as they represent opportunity. But as Philadelphia 76ers general manager Sam Hinkie explained to, teams have to trust their process:

"There's lots of randomness in everything we're doing, we just don't like to think about it that way," Hinkie said. We can't control [the results]. I don't know any other benchmark [than evaluating process]."

"It would be like you sit down at a blackjack table and you say 'forget how you play, how many hands do you have to win to know you're doing what you should be doing?. If you win seven hands, is that enough? Or do you have to win eight hands?" Hinkie said in a comparison. "And you say, 'actually all you should focus on is what we know will lead to winning hands in blackjack over time.' "

With teams like the Orlando Magic and Philadelphia 76ers depending on the process of evaluating young players to rebuild their franchises, it doesn't appear that draft picks will be devalued anytime soon.

The rumored "wheel" system would remove the unknown and therefore make picks less valuable, but that's a long way out, even if it is adapted.

A new collective bargaining agreement is pretty far down the road also, and it's hard to see the player's union ever making the argument that young guys with no experience should earn substantially more than veterans that have been in the league.

That's a fight no one is going to be fighting. 

Although they're already worth quite a bit, the value and demand for draft picks is only going to increase as time goes on.