Can the Portland Trail Blazers ride their hot start to a playoff berth this season? That question has been the main source of discussion for Blazers fans in recent weeks (other than debating the implications of C.J. McCollum's meteoric rise, of course).
Implicit in the debate regarding the merits of a playoff push is the question of the value of the Blazers' 2016 first round draft pick. As most readers likely know, if the Blazers do make the playoffs the pick is forfeited to the Denver Nuggets to complete last season's trade for Arron Afflalo. If they do not make the playoffs, then the team keeps the lottery pick. The selection is currently slotted at No. 10, but is only two games from No. 5.
A common refrain when discussing the pick is to argue that the draft is a crap shoot and that nothing is guaranteed in the NBA. It has been suggested that it would not be a major problem to lose the selection so as to complete the trade now. However, due to a unique set of circumstances, this year's draft pick is more valuable to the Blazers than first round picks in the same range for other teams and in other years. Dismissing it would likely be a mistake.
The crap shoot argument goes something like this: Even with the advent of player tracking data, advanced analytics, and limitless video footage, there are still busts and breakout stars in every draft. In recent history the Blazers have watched a former No. 5 pick, Thomas Robinson, be definitively outplayed by the man drafted immediately after him, Damian Lillard. Meanwhile the San Antonio Spurs are led by an MVP candidate who was picked 15th overall, and Wes Matthews was ignored by all 30 teams. Twice. Bill Simmons provides a less than scientifically rigorous, but illustrative, breakdown of the argument in this column.
However, the "crap shoot" argument has a significant hole in that it assumes each team is equally good (or bad) at assessing talent. Under this model all GMs are, in essence, in agreement about who the best players are and pick accordingly. Fortunately for the Blazers, that is not the case and Neil Olshey is one of the best drafters in the business, significantly improving Portland's chances of draft night success. Consider his draft history (all first round picks and select second round picks):
- 2008: Eric Gordon, (No. 7) DeAndre Jordan (No. 35)
- 2009: Blake Griffin (No. 1)
- 2010: Al-Farouq Aminu (No. 8), Eric Bledsoe (No. 18)
- 2012: Damian Lillard (No. 6), Meyers Leonard (No. 11), Will Barton (No. 40)
- 2013: C.J. McCollum (No. 10), Allen Crabbe (No. 31), Jeff Withey (No. 39)
Note: I have included Jordan and Gordon in his draft record because Olshey has been credited with being the driving force behind picking those players as former GM Elgin Baylor was preparing to resign.
That track record is nearly spotless. Every single first round pick has panned out, or is probably in the process of panning out, and he has found four second round picks of value in seven years. Finding any valuable second round picks is considered a success for many teams. Some would criticize the Aminu pick because Paul George and Gordon Hayward were selected after him, but ultimately Aminu has turned into a serviceable NBA player who is starting for the Blazers and averaging 11 points, 6.8 rebounds, shooting 37 percent from three while also providing great perimeter defense. In a vacuum, getting a decent starter out of a No. 8 pick is a fine value. Further, if every GM is criticized for passing on a surprise success story then there would be literally no good GMs left.
The bigger point is that when you look at Olshey's track record and start splitting hairs over whether his worse first round pick in seven years should be graded a C- or a B, it's not the equivalent of looking at Minnesota's draft history to see Johnny Flynn, Wesley Johnson, and Derrick Williams selected in the top six in consecutive seasons. Olshey may still be doing a certain amount of guess work on draft night, but his track record suggests that more often than not, the Blazers are going to come out ahead. To extend the metaphor, for Olshey the draft is less crap shoot and more MIT card-counting blackjack.
Beyond that, lottery picks are of nearly incomparable financial value in the NBA. Rookies are locked into "rookie scale" contracts. Those contracts are for a set salary based on draft pick position that dictates a rookie's wages for five years. When a player is successful that contract is far below market value. For example, the Blazers' two best players, Damian Lillard and C.J. McCollum, have the fifth and ninth highest salaries on the team, respectively, because they are still being paid on the rookie scale. Similarly, Anthony Davis, who had the one of the best PERs ever last season, is making only slightly more than Ed Davis. Suffice to say, when a lottery pick is a "hit," or even a moderate "hit," they instantly become one of the most valuable contracts in the league.
The positive financial impact of lottery selections has been quantified by Nate Silver of fivethirtyeight.com. To illustrate, here is a graph from Silver's article:
This graph shows that the production of players picked in the top 10 saves teams about $5 million per year relative to signing a player who produces a similar amount via free agency. That salary saved is nothing to dismiss - it's roughly equivalent to a mid-level exception last season.
But the value of this year's first round picks goes beyond that - the successful players from this year's lottery will potentially be some of the most underpaid players in league history. The salary cap is jumping to unprecedented highs, but this year's draft class will be locked into salaries set during the last collective bargaining agreement. The practical effect is that as the salary cap jumps to $100 million or more in 2017, a No. 7 overall pick from this year's draft will be making less than $3 million. In other words, a team that drafts well this summer could have a starter who is using only three percent of their salary by the player's second and third year. For comparison, three percent of this year's salary cap would be $1.89 million. Additionally, with the CBA set to expire in 2017, the league and players are likely to renegotiate the rookie scale to more closely align with the increased salary cap, and 2016 will probably be the last year that teams can cash in on ridiculously undervalued draft picks.
Under these circumstances, even a Neil Olshey worst case scenario first round pick (Al-Farouq Aminu) would be a far better value on a rookie deal than the actual Aminu who used about 12.7 percent of the salary cap this season. And, if Olshey drafts an even better player than Aminu, then that deal becomes even sweeter. Olshey values bargains - look at the Ed Davis and Mason Plumlee deals and declining contracts he negotiated this offseason. The opportunity to find a starting level player who will only use three percent of the cap will be extremely appealing to him.
To illustrate how this would affect the Blazers from a big picture perspective, consider that over the next two summers Portland is likely going to have to offer $20 million or so to extend McCollum, plus another $12 million for Leonard, and another $9 million for Crabbe to go with the $8 million Aminu is locked in at. Add Lillard's max deal and suddenly the Blazers are spending $74 million on five guys who couldn't even start together. Even though the NBA cap is about to skyrocket, the Blazers, like every team, will be greatly aided if they have a rookie who is playing far below market value. For more evidence supporting this view point, check out this Tom Haberstroh article.
The bottom line is that the Blazers have overachieved this season, but the team is still going to need more talent. The need for a defensive center, third playmaker, and more perimeter defenders has been much discussed. Olshey has proven himself to be an excellent talent evaluator and has a superb draft day history, so the draft is a natural place to look to fill these holes. Plus any player drafted this season will be locked in to a historically valuable contract. The draft is still and always will be a gamble, but ultimately it gives the Blazers a great chance of improving the team's long term win percentage and the importance of the team's 2016 first round pick should not be underestimated.
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