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Allocation of Young Talent Into The NBA

Once a year, in early June, sixty basketball players are drafted from colleges and universities around the country to join one of the thirty professional teams in the National Basketball Association (NBA). The following is a concise overview of how the National Basketball Association allocates young talent into their billion dollar industry. In essence, the National Basketball Association has some very good teams that win a lot, and some very bad teams that lose a lot. The NBA Draft is a way to keep the NBA very competitive for all teams.

There are thirty professional teams in the NBA. The best eight from each of the two conferences (a total of 16) qualify for the playoffs and have a chance to win the championship. The fourteen remaining teams that do not qualify for the playoffs are entered into a mechanism called the NBA Draft Lottery. There are 82 games in the NBA season, and the team with the most losses and the least wins has the highest chance of winning the Draft Lottery and getting the first pick in the NBA draft (i.e. the best player in college or around the world). The order of the first fourteen teams in the draft is determined this way, giving the very worst teams the highest chance of getting the first, second, or third picks in the draft. The commissioner literally draws out of a hat (that has predetermined odds and percentages based on the season results) to determine the order of the first fourteen teams. After the lottery, and the order of the first fourteen is already decided, the order for the sixteen other teams is set. The team with the best record of all 82 games gets the very last pick (the 30th pick) in the draft. The second-best team gets the 29th pick, and so on. There are a total of 2 rounds in the draft, allocating the best sixty collegiate players to professional teams. The order is the same for both rounds.

There actually is an abstract form of currency in this market. Very often teams will trade their current players, and/or their future draft pick position to move up or down in the NBA draft. If a professional team sees a college player that would fit the team’s needs very well, but the player is expected to go very early in the draft, this team can trade their current players and their draft position to move their position up in the draft.

 

 

(Note: The information in this post comes from my knowledge of the National Basketball Association.)

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