NBA Draft or Free Agency: Which Is the Better Blueprint for a Championship?

When NBA teams are attempting to revamp their rosters in hopes of winning an NBA championship, two routes generally present themselves as blueprints: the draft and free agency. In the Association, the latter is a much better option than the former.

Whereas the draft is a mysterious event surrounded by intrigue and question marks, free agency is generally an easier event to figure out. 

Sure, there's still some risk when signing established players to lengthy contracts. Injuries could limit effectiveness, for example. Players could fail to live up to the expectations placed upon their shoulders once they've signed on with a new franchise.

With the draft, there aren't really expectations to fall short of. The players are fresh out of college or the ranks of international basketball. They aren't the seasoned pros that most free agents are during the sweltering summer months.

The most we can do is use the historical expectations associated with each draft slot to come up with expectations for new additions through the primary method of dispersing entry-level talent.

Under the current CBA, the maximum length of a rookie contract is four years, assuming that all player and team options are utilized to their full extent. Using win shares (a pace-adjusted metric that shows how many wins a player has directly contributed to through his play on both ends of the court) as an overall measuring stick for those first four years of a rookie career, we can look at the average value of each draft pick from the top pick to the NBA's version of Mr. Irrelevant.

Here's the data from 1982-2008—those drafted in 2009 or later have yet to play four full seasons—with draft slot on the x-axis and Four-Year Win Shares on the y-axis:

As you can see, the draft positions do fall into place quite nicely. In fact, the correlation coefficient is 0.927—well over the statistical threshold that indicates a good fit. Over the years, the top picks have indeed tended to perform better than the later selections.

There are no surprises there, except for the weird statistical anomalies like the No. 2 slot performing worse historically than No. 3 and No. 5. And for whatever reason, having the No. 15 pick in the NBA draft seems to be a terrible situation to be in, as that position has been outperformed by Nos. 16 through 24 with no exceptions.

However, the draft is nothing more than a crapshoot from a year-to-year basis.

Here's the same data, this time with every individual player drafted represented on the scatter plot instead of the slot averages:

Just look at how many individual players have fallen above and below the best-fit line on the second graph. The correlation coefficient for the best-fit logarithmic regression now drops to 0.358, which is far too low for general managers' likings. 

The values of draft picks may even out as the steals and busts regress to the means over time, but the value of an individual pick each year can fluctuate dramatically. 

While it's not out of the realm of possibility to land steal after steal, it's just as likely to draft a number of busts over the years.  

It's far more rare for someone like Sam Presti to come around and make solid picks numerous times, building a championship contender like the Oklahoma City Thunder. 

The Thunder and the San Antonio Spurs are the exceptions to the rule. And even if a team has the potential to be one of those exceptions, it's still tough to land the top picks necessary to build the team. 

First of all, a franchise has to perform poorly enough to earn a lottery pick. If you're in lottery range, then you're not exactly in possession of a roster necessary to support your draft pick en route to the Larry O'Brien Trophy. 

Once-in-a-generation talents come about, well, once in a generation. 

Additionally, landing a top pick is anything but a guarantee, even if the odds are working in favor of a team. The ping pong balls bounce in funny ways, time after time. Sometimes the envelopes might be cold. 

Now let's take a look at the last few teams to actually win a championship. In the NBA, you either win or you don't; it's as simple as that. No one remembers the runners-up. 

The Miami Heat are the reigning league champions, and their team was most assuredly not built up through the draft process. While Dwyane Wade was selected by the Heat in the 2003 draft, LeBron James, Chris Bosh and Shane Battier were all acquired through free agency. 

In fact, every team to win a title since the turn of the century acquired primary contributors through either free agency or trades, with the exception of the Spurs and general manager R.C. Buford. There's a reason that teams strive to emulate the Spurs, but they're all missing one crucial piece—Buford himself. 

Free agency simply offers possibilities that the draft does not. 

A team can utilize scouting reports that they've generated watching players perform against NBA competition. It's far easier to predict the future for a player who's spent three years in the league than for Darko Milicic or Kwame Brown. 

Moreover, teams can sign players to fill niches and push them over the top in the hunt for a championship. 

By all means, use the draft to help strengthen a roster. Just don't count on that crapshoot as your blueprint for a championship.