The Opportunity Cost of Making the Playoffs

The Eastern Conference has been pretty bad this year, but it has at least managed to right the ship a bit as a whole. There were times earlier in the season when only 3 of the 15 teams had winning records. Now 6 teams are above .500, and are likely to stay that way until the end of the season. The current 7th seed, the Charlotte Bobcats, have an outside shot of getting over the hump by season’s end as well. Of the three teams that had winning records early in the season, two – the Pacers and Heat – have put significant distance between themselves and the field.

The third, the Atlanta Hawks, has fallen 10 games below .500 due to the loss of Al Horford for the season the day after Christmas and a rash of other injuries. They are only 6-19 in their last 25 games, and that collapse has opened the door for a couple of teams though to be long-dead in the race for the playoffs. Both the Knicks and the Cavaliers are within 2.5 games of the Hawks for the last spot in the East, with the Knicks especially close (they’re one game back). This leaves the possibility that the Hawks could miss the playoffs entirely and one of the other teams can grab the 8th seed.

Whichever of these teams makes the playoffs will be one of the absolute worst playoff teams in years, likely finishing at least 7-8 games under .500, and they will be heavy underdogs regardless of which of Miami and Indiana they end up facing. Because the disparity between the East and the West is so large this season, there is more at stake than just the right to get blown out of the playoffs against a far superior team. The gap between the draft pick the 8th seed gets and the pick conveyed to the teams that miss out is substantial.

The Knicks have already traded their pick away to Denver, so they would see no benefit from missing the playoffs, but the Cavs and Hawks are both facing a very real drop in the value of their draft pick should they make it in. Whoever ends up with the 8th seed will pick 15th in the upcoming draft, one spot outside of the lottery. The team that finishes 9th will pick much higher.

Given the standings today, this team would finish with the 10th worst record in the NBA. Their lottery odds would therefore be heavily weighted to receiving the 10th overall pick – this outcome would occur in 87% of lottery scenarios.

The difference in picking 15th vs. picking 10th could be a big deal, especially in a draft this deep. Andrew Wiggins and Jabari Parker won’t be hanging around at 10, but Noah Vonleh or Dario Saric (or someone in that tier) will be. In the late lottery and beyond the talent pool gets a lot murkier.

Of course the team that finishes with the 9th record in the East isn’t locked into the 10th pick. There is a chance that the pick could fall to number 11 (or 12), but there is also roughly a 4% chance of landing a top-3 pick from the 10th position in the lottery. Several teams recently have landed a top-3 selection despite long lottery odds. Last year the Wizards grabbed Otto Porter with the 3rd overall pick in spite of having only the 8th worst record. Kyrie Irving was selected 1st overall by the Cavs in 2011 after receiving the pick in exchange for taking on Baron Davis’s contract from the Clippers, who also had only the 8th worst record that year. Chicago got even luckier when they turned the 9th best odds of winning the lottery into a number 1 pick and Derrick Rose in 2009.

In case you were wondering, one team has landed the top pick despite having the lowest odds of winning the lottery. In 1993 the Orlando Magic finished just outside the playoffs in Shaquille O’Neal’s rookie season, losing out on a tie-breaker to the Indiana Pacers with the 11th worst record of 41-41. With less than a 2% chance of winning the lottery they still managed to get the top pick. They ended up swapping it for the 3rd selection in order to land Penny Hardaway. The first overall pick was Chris Webber.

So basically the odds may be long for getting a top-3 pick if a team has the 10th worst record, but it can happen. Making the playoffs eliminates this possibility. It’s doubtful that there will be any tanking over the last few games among these teams to land the higher pick, but this season the incentive to do so is as high as it has ever been. In this rare instance it may be of greater value to lose out in the playoff race to get the better pick in a loaded draft.