This week, Dave Berri has written posts — at Freakonomics and Huffington Post — and has been interviewed for articles on the subject that never dies: tanking. The subject seemed to be resurrected by an article on ESPN that purportedly features an anonymous NBA GM extolling the virtues of tanking:

Our team isn’t good enough to win and we know it. So this season we want to develop and evaluate our young players, let them learn from their mistakes — and get us in position to grab a great player. The best way for us to do that is to lose a lot of games. This draft is loaded. There are potential All-Stars at the top, maybe even franchise changers. Sometimes my job is to understand the value of losing. I know that sounds crazy, but if you’re an NBA general manager like me, the last place you want to be is in the middle. There are only two outcomes there: Either make the playoffs and be first-round fodder for one of the premier teams or miss the playoffs and pick somewhere around 11th to 14th in the draft. Either way, the odds are that you stay in that middle range. It’s a recipe for disaster. You need superstars to compete in this league, and the playing field for those guys is tilted toward a few big-market teams. They are demanding trades and getting together and deciding where they want to go in free agency. It’s tough for us to compete with that. So a high lottery pick is all we have.

You can also see a video where the author of the piece discusses the subject.

What’s interesting is that many people don’t seem to like our finding that tanking isn’t an effective strategy. Decision makers in the NBA have done an amazing job convincing their fans that losing really is the best path to a title, even when the data suggest otherwise.

What data do we have that stripping down a team a losing a lot of games is not the best way to win a title? Consider the following numbers:

54. Since 1985, only two teams (the Miami Heat in 2006 and the Houston Rockets in 1995) have managed to win a title without winning at least 66 percent of their games (which works out to 54 wins in an 82-game season). So it seems likely that a team needs to win at least 54 games to be considered a contender.

Since 1985, only two teams (the Miami Heat in 2006 and the Houston Rockets in 1995) have managed to win a title without winning at least 66 percent of their games (which works out to 54 wins in an 82-game season). So it seems likely that a team needs to win at least 54 games to be considered a contender. 10%. Teams that win 25 games or less have only about a 10% chance to join the list of contenders five years after their terrible season. Which means that 90% of teams that win 25 games or less won’t make it to 54 wins after five years.

Teams that win 25 games or less have only about a 10% chance to join the list of contenders five years after their terrible season. Which means that 90% of teams that win 25 games or less won’t make it to 54 wins after five years. 20%. Teams that win 34-49 games — so called “mediocre teams” that find themselves in the dreaded middle — have about a 20% chance of hitting 54 wins after five years. This means that a middle-of-the-pack team is twice as likely to become a contender than a team that bottoms out.

But those are just the figures for teams. I’ve also looked at the success rate of players who were taken with one of the top three picks in the NBA draft, and it isn’t pretty:

25%. Those are the odds that the team with the worst record in the NBA will win the #1 pick in the draft. That means that 75% of the time the #1 pick will go to a different team.

Those are the odds that the team with the worst record in the NBA will win the #1 pick in the draft. That means that 75% of the time the #1 pick will go to a different team. 32%. The likelihood that a team picking in the top three will not make the playoffs even once in the four years following the draft. Why four years? Four years is the amount of time on rookie contracts.

The likelihood that a team picking in the top three will not make the playoffs even once in the four years following the draft. Why four years? Four years is the amount of time on rookie contracts. 29%. The likelihood that a team picking in the top three will top out at the first round in the four years following the draft. This means that 61% of teams will manage a first round loss or worse in the four years following a top three selection.

The likelihood that a team picking in the top three will top out at the first round in the four years following the draft. This means that 61% of teams will manage a first round loss or worse in the four years following a top three selection. 18%. The likelihood that a team picking in the top three will make it to the Conference Finals, Finals, or win a championship in the four years after their draft. So 82% of the teams picking in the top three won’t make it deep into the playoffs within four years of their draft.

The likelihood that a team picking in the top three will make it to the Conference Finals, Finals, or win a championship in the four years after their draft. So 82% of the teams picking in the top three won’t make it deep into the playoffs within four years of their draft. 2. The number of teams that have won a title within four years of drafting a top three pick. One of the players in question — Tim Duncan — was very productive and essential to winning that championship. The other player — the infamous Darko Milicic — hardly played during his team’s title run.

The number of teams that have won a title within four years of drafting a top three pick. One of the players in question — Tim Duncan — was very productive and essential to winning that championship. The other player — the infamous Darko Milicic — hardly played during his team’s title run. 5. The number of top three picks that have won a championship with the team that drafted them. You already know about Duncan and Milicic. David Robinson won a championship with the Spurs 11 years after being drafted (and with Duncan’s help). Sean Elliott (9 years after being drafted) and Jason Kidd (16 years) are the other two players, and both of them were traded away and then re-acquired before helping their respective teams to a title.

To summarize:

Teams that are bad tend to stay bad.

Teams that are mediocre are more likely to become contenders than bad teams.

Teams picking in the top three don’t tend to advance in the playoffs within four years.

Teams picking in the top three don’t usually win a championship with their draftee.

But perhaps the funniest thing about the whole discussion is that tanking actually used to work! The figures that are mentioned above only apply to drafts that have happened since 1985. From 1966-1984, teams that landed a top three picking actually had a 36% chance of making the Conference Finals or better, which is twice the current figure. And teams were almost three times more likely to win a championship with their top three draftees.

[Editor’s note: if you are interested in reading about why tanking was more effective in the past, read my post Tanking used to work in the NBA]

The NBA knew that tanking used to work too well, and that’s why the format was changed after a famous bout of tanking in 1984. However, since that time, tanking hasn’t been an effective strategy. So the NBA has already fixed tanking! The teams that tank right now are poorly run organizations that tend not to be very successful. Tanking only hurts the NBA right now because these poorly run teams aren’t allowed to fail, and watching losing basketball isn’t very fun.

We should stop for a moment to applaud those in the NBA who have managed to convince so many people into thinking that tanking works. Imagine if firms in other industries could convince their customers that a bad product is the key to immense happiness in the future!

– Devin (with some help from DJ)