Last night, in a not-entirely unexpected piece of NBA news, Sam Hinkie stepped down as General Manager of the Philadelphia 76ers. Three years into an unprecedented rebuilding effort, and with a 47-195 record since 2013-14 to show for it, the Sixers organization slowly phased Hinkie out: first hiring USA Basketball legend Jerry Colangelo to oversee operations, and now with the rumoured hiring of Colangelo’s son, Bryan, as the team’s new GM.
Hinkie’s strategy drew its fair share of fans and detractors alike over the years. Closer to home, Canadian Collective’s own Tyson Lavigne was, and presumably still is, a supporter of the #TrustTheProcess movement. What’s more, I wrote a paper debating the moral dilemma of Hinkie’s methods during my final undergrad year of university. With the man behind one of the NBA’s most radical experiments stepping down, I thought now would be an appropriate time to share this paper. Written almost exactly one year ago, this piece gets into the nitty-gritty of what tanking means to NBA teams, and may give some clarity into what has transpired in Philadelphia over the past three seasons. So grab your finest sweater (preferably with elbow patches), throw on your reading glasses, and pour a glass of scotch if you’d like, because it’s time to get academic, NBA-style.
LOSING TO WIN: DEBATING THE MERITS OF TANKING IN THE NATIONAL BASKETBALL ASSOCIATION
The Philadelphia 76ers are one of the proudest franchises in the National Basketball Association (NBA). Originally known as the Syracuse Nationals in 1949, the team was sold and moved to Philadelphia in 1963, where it has remained to this day (Sixers History, 2015). Over the course of its existence, the organization has won three championships and featured some of the greatest players in league history, including Wilt Chamberlain, Julius Irving, Charles Barkley, and Allen Iverson. As far as NBA legacies go, the Philadelphia 76ers organization has been regarded with admiration and esteem for the majority of its existence, and the franchise is considered one of the league’s cornerstones.
In the present day, however, the 76ers are in the spotlight for an entirely different reason: since 2013, the team has been in the midst of a multi-year rebuilding phase in which its front office has moved talented, established players for younger, less talented players, along with draft picks and financial considerations. The goal, as presented by owner Josh Harris and General Manager (GM) Sam Hinkie, is to develop young players while acquiring future assets, in hopes of turning them into star players in the mold of Barkley or Iverson. In the past two seasons alone, this strategy has yielded 26 consecutive losses in 2013-2014 (tying an NBA record), and a 0-17 (win-loss) start to the 2014-2015 season (McQuade, 2015). In the face of this futility, Harris and Hinkie have preached patience to 76ers fans, and are confident that this current stretch will yield championship-quality results in the near future.
This organizational strategy employed by the 76ers has brought “tanking” to the forefront of discussion within the NBA. Price, Soebbing, Berry, and Humphreys describe tanking as “intentionally trying to lose basketball games […] to get a higher pick in the next entry draft” (2010, p. 118). The debate surrounding this issue is multi-faceted, and is perpetuated by the argument that the NBA’s current draft policies encourage teams to forego success for periods of time. Analysis by Taylor and Trogdon (2002) led the researchers to conclude that NBA teams are more driven to lose games when there is adequate incentive to do so, naming the draft as the primary motivator. As the league’s draft lottery is currently structured, the team that finishes with the league’s worst record has the greatest chance of obtaining the first overall pick, and the odds decrease for each subsequent team (Loop, 2015). As a result of this format, a dual incentive problem is created. While most teams expend effort to win as many games possible, the draft incentive creates a “tournament within a tournament” in which some teams in the same league expend effort to lose games (Price et al., 2010, p. 118). This conflict of intentions is one of the primary sources of debate pertaining to tanking in the NBA.
Before going further, it must be clarified that there is no evidence of NBA coaches or players intentionally playing to lose. Despite what an organization’s intentions may be, players and coaches (especially those who are lesser-known and/or playing for a less-talented team) are working to keep their jobs, or at least perform well enough that another team will consider employing him in the future. With this being said, organizations (namely, general managers with permission from their superiors) can create team environments which decrease the odds of attaining success. This can be seen in the current case of the 76ers, whose front office has made collecting assets, drafting high-upside players regardless of injury, and signing less talented players its unwavering priorities.
While there is certainly reason behind this organizational strategy, it is not a prudent method of achieving success. Throughout this paper, the reasons for this position will be examined and challenged through various perspectives. Tanking in order to obtain high draft picks in the NBA is flawed because it is damaging to the sport, raises the issue of moral hazard in regards to behaviour of NBA general managers, and rarely precedes periods of sustained excellence.
As the 76ers and other teams compete to finish with the worst record, the NBA is facing a dilemma. First and foremost, the public perception of a professional sports league that features teams with this organizational philosophy will undoubtedly suffer. Fans will reject the idea of cheering for a team with no intention of winning, and the prospects of obtaining financial commitments from spectators and season ticket holders will be greatly reduced. This will have demonstrable effects on revenue generation and other important considerations. Adding to this dilemma is the impact of tanking on competition within the NBA – for a league that is widely considered a collection of the world’s most talented players, organizations have a duty to their spectators and their opponents to field a competitive roster.
What is it, then, that drives an organization to tank? Teams such as the 76ers believe that fans will understand the process, as long as it holds promise of later success. Harris and Hinkie appear to operate under the belief that mediocrity is the worst possible fate for an NBA team – that is, not good enough to compete for a championship, but not bad enough that they are likely to obtain a player through the draft who will have a significant impact. The reasoning behind these decisions is derived from this perspective, as some will argue that it is better to ‘bottom out’ so to speak and start fresh, than to be stuck with a team that has very limited odds of winning a title. By disregarding immediate efforts to be successful, a tanking franchise is acting with the intention of reaping the benefits of this behaviour in the future (Morgan, 2007). It is a long-term, high-upside plan that deserves commendation in terms of originality and forward thinking.
Unfortunately for proponents of tanking, though, the limits of such consequentialist thinking is that decisions do not always result in desired outcomes. As William Morgan cautions, there is the question of whether the good can be “neatly measured and aggregated” in this particular way of thinking, and there is risk in taking outcomes of a particular decision for granted (2007, p. xxvi). The intentions of a team like Philadelphia are clear, but putting so much stock into the hopes of this strategy paying off has already had its consequences, both in terms of the win column and in having the NBA’s lowest average home game attendance (McQuade, 2015). With this on-court futility combined with current loss of fan interest, it can be inferred that if this strategy does not come to fruition within a short period of time, fans will likely continue to stay away from games.
Part of the reason for this decreased spectatorship is based on the fact that sports leagues use the idea of competition as a primary selling point, which is manifested in the uncertainty of game outcomes (Soebbing & Mason, 2009). If the league relies on selling uncertainty as a source of entertainment, the competitiveness of each of its franchises should be a major area of emphasis. Soebbing and Mason offer that any perception by consumers that the outcome of a game is not uncertain will “compromise the integrity and legitimacy of the league and its stakeholders” (2009, p. 144). If a team happens to be less competitive than its average opponent, there is less uncertainty in the result of the game, and therefore less public interest in the outcome. This will then be seen in terms of decreased gate revenue and television audiences.
Because fans often make financial commitments to the team they support, the team has a duty to provide them with quality entertainment on a nightly basis. Beyond the spectator perspective, the team also has a duty to the rest of the teams in the NBA. By intentionally reducing the quality of a team, its opponents do not gain the same benefits of high-level competition as they would against a stronger team. This disparity in talent can also affect the standings, specifically as they relate to playoff seeding. Due to the way in which NBA games are scheduled, some teams will play a tanking opponent 3 to 4 times per season, while others will only play the tanking opponent twice. While the teams that play 3 to 4 times will not benefit from the challenge of facing high-level competition in these games, they are more likely to win, and therefore have an advantage in their potential to accumulate wins. This in turn contributes to a schedule imbalance that unfairly favors certain teams over others. By fielding a competitive team, these concerns regarding competition and declining spectatorship will surely be eased.
In addition to its adverse consequences for spectators and opponents, tanking as it is currently performed encourages questionable behaviour by NBA GMs. In Malcolm Gladwell’s 2005 essay on health care in the United States, he discusses the notion of moral hazard. This concept claims that risky or undesirable behaviour is enabled by insurance against said behaviour (Gladwell, 2005). Essentially, by providing reason to act in such ways, those in position to make risky decisions will be more likely to do so. In terms of the NBA, the “risk” in tanking behaviour is that teams will go through periods of intentional losing for results that are less satisfactory than envisioned. In combination with the negative effects of tanking already discussed above, having a system in place that rewards such risk is not ideal for the NBA and its teams.
Proponents of the 76ers’ plan will argue that this “risky behaviour” is a necessary method which will give the team flexibility for building the team in a variety of ways. By taking on younger, cheaper, less talented players, and acquiring assets in the form of money and draft picks, the team is now theoretically in a better position to upgrade. The recent history of the Houston Rockets is a relevant example. Prior to the 2012 NBA season, Rockets GM Daryl Morey had been aggressive in accumulating draft picks and conserving financial resources, not unlike the 76ers, in the hopes of flipping these pieces for an established player (Mahoney, 2013). When it became known that the Oklahoma City Thunder were looking to trade young star James Harden, Houston was in a perfect position to offer a package consisting of these afore-mentioned assets. The Rockets were also able to commit money to Harden, allowing him to eventually blossom into one of the league’s most feared scorers as a Rocket.
It comes as no surprise that Sam Hinkie is a former employee of the Houston Rockets. The 76ers are admittedly pursuing a bolder version of Houston’s strategy, but the goal remains the same: acquire a star player. The argument that stars take franchises to new heights is the ultimate driving force behind the 76ers thinking; one only needs to look so far as the Cleveland Cavaliers’ addition of Lebron James, a former 1st overall pick, to a team already featuring star guard Kyrie Irving, another 1st overall pick, to see the impact that top-tier players can have on the relevance of a franchise (Gregory, 2014).
Where this argument runs into problems is when looking back upon NBA history. In the modern NBA lottery era (since 1992), only two teams to pick in the top 3 of the draft have gone on to win a championship in that player’s initial time with the team (Berri, 2012). If a team’s goal is to be so poor that they will pick high in the draft, the likelihood of such a player winning a championship while with that team is slim. Even the Rockets, with the above-mentioned Harden, have not advanced past the first round of the playoffs since acquiring him.
This is where Gladwell’s discussion of moral hazard comes back in to play, as he describes providing insurance for risky behaviour as a complicated and problematic endeavour (2005). For a team like Houston that was mediocre prior to the acquisition of Harden, their record from that point until now has been seen as progress. For a team like the 76ers, however, who have made their fans endure record bouts of losing with the promise of eventual glory, there is much at stake. In addition to poor attendance and the threat of a losing culture settling over the team, the 76ers risk placing too much of an emphasis on what Taylor calls the “Primacy of Instrumental Reason”. This asset-focused philosophy, as it relates to the methods of teams like Philadelphia and Houston, can result in a loss of humanity for the players who are treated as pieces to be bargained with (Taylor, 2006). If Philadelphia’s plan does not result in substantial improvement, players will begin to resent being treated as currency, making the team’s quest to acquire talented players that much more difficult. This leads into the train of thought that building a successful team requires much more than obtaining a star player.
Clearly, top picks are not the greatest determinant of a team’s success. Basketball is a team sport – although one extremely talented player can make a world of difference, there is so much more that must be considered for teams to succeed. It takes a well-rounded organization, one which is competent from top to bottom, in order to win championships in the NBA. This means that in addition to having talented players, organizations must consider additional factors including but not limited to coaching, roster balance, adaptability, and player evaluation. This pragmatic approach to team building is an organization’s best method of attaining sustained success.
That is not to say that the top draft pick does not benefit NBA teams. In fact, the benefits have been well-documented throughout the literature. Price et al. used data from the 1992-1993 season through 2007-2008 to measure the impact of top draft picks on NBA franchises. In financial terms, having the first or second overall pick increased a team’s gate revenue when controlling for the number of team wins. Additionally, the researchers found increased revenue stemming from other sources like merchandise sales, advertising, and concessions as a result of obtaining a top pick. Pertaining to the on-court product, Price et al. also found that 33.3% of first overall picks performed at or above a “superstar” level, and on average these players contributed 7.2 wins in their first season (2010, pp. 123-125). Most importantly, top draft picks give teams control of what is likely a valuable asset for an extended period of time. Players coming into the NBA have a set salary based on their draft position, and teams have control of these players for up to 4 years on their rookie contracts. Teams are also able to offer contract extensions before other teams can negotiate with the player, giving them an advantage in securing a top pick’s services beyond the initial contract. When taking into account a top pick’s impact on revenue generation and wins produced, the ability to keep such a player on a team for 4-plus years translates into a positive situation for any team.
These benefits are not all guaranteed, though. In a paper submitted to the MIT Sloan Sports Conference in 2012, Walters and Williams argue that “despite the perceived benefits of a favourable lottery position, there is substantial uncertainty associated with the performance of top amateur prospects” (p. 1). The influence of factors such as luck (in terms of health, injuries to opponents’ key players, etc.) and chemistry (ability of a team to play as a cohesive unit) cannot be ignored. In the face of this uncertainty, a well-rounded, competent organization is the greatest influence on sustained competitiveness.
The ultimate example of this pragmatic approach to team-building is the San Antonio Spurs. Granted, the Spurs are one of the two teams discussed above that have won a championship with a top pick of their own on the roster. What makes this organization so noteworthy, however, is the way in which it has sustained the success it achieved after first drafting Tim Duncan almost 20 years ago. Thanks to the stability of San Antonio’s ownership and management, the presence of a great coach in Gregg Popovich, and consistently smart personnel decisions, the Spurs have won five NBA titles since Duncan was drafted in 1998.
The way in which the Spurs have stayed relevant for such a long period of time can be attributed to a number of factors (Scaletta, 2013). The organization has a reputation for treating each member well, valuing both the human and analytical sides of the sport. The hallmark of the Spurs’ most recent successes has been Popovich and GM R.C. Buford’s construction of rosters that rely not on one or two star players, but on ball movement, passing, and smart, efficient offense – doing so not with recent top picks, but with late first-round picks and cast-offs from other NBA teams that fit the team’s philosophies. This adaptability in particular has been perhaps most important of all. In Duncan’s early years, the Spurs succeeded by giving him the ball in the post, and playing off one of the greatest big men of all time. As the NBA has shifted to more of an emphasis on spacing and three-point shooting, however, the Spurs have not been afraid to change their methods. Duncan, in particular, lost weight and learned to operate from areas of the court that accommodate this new style of play, while lessening wear and tear on his body and prolonging his career in the process.
What NBA teams can learn from the example of the Spurs is that there is no one guaranteed method to building a sustainably successful program. Though the 76ers may hope to emulate the Spurs’ methods upon acquiring more talented players, it takes a number of important considerations to even begin to approach such a level. The lesson in this is not to put all of one’s eggs in the ‘tanking basket’; rather, teams are better off emphasizing a number of important contributors, from coaching, to fitness, to scouting, and so on. If the 76ers are to reach their goals, they could do worse than to take a more pragmatic approach to rebuilding.
In conclusion, it is not difficult to see why tanking has been such a source of debate in the NBA in recent years. There is an argument to be made for the potential benefits of this behaviour, and some acknowledged tangible benefits as well. However, for a number of reasons, tanking is not an advisable route to success in professional basketball. By constructing teams that are designed to lose as much as possible, organizations are doing a disservice to both the fans of the sport and to the organization’s opponents. Some propose that this behaviour, despite its risks, is a worthwhile method of constructing a successful team. However, the inherent moral hazard in doing so promotes behaviours that are likely to cause NBA franchises more harm than good. Finally, with the San Antonio Spurs as a model of sustained success, it is essential to take a pragmatic approach to roster construction rather than relying on star players as organizational saviours. It will be intriguing to see how the long-term plans of teams such as the Philadelphia 76ers come to fruition, and the debate regarding tanking in the NBA will certainly continue as this situation progresses.