Saturday, April 21, 2007

Mr. Wright, meet Professor Buchanan

Or, public choice theory meets the NBA draft

Tar Heel fans nervously await the decision by freshman forward Brandan Wright. Will he leave this year for the NBA? This Raleigh writer thinks he might want to stay and improve his position in the draft.

After all, why would NBA general managers salivate over a 205-lb power forward who misses about half his free throws, is a middling post defender and has a shooting range of about 8 feet?

Blame the NBA, which tried to change human nature by 1) setting a salary structure for rookies for at least their first three if not five years in the pros and then 2) requiring them to stay out of the draft for at least one year out of high school.

The rookie cap is the bigger problem. Once upon a time, college and high school players could let teams bid for their services on the open market. Underclassmen who were on the edge of the lottery could make a lot more money early in their careers if they returned to school and improved their skills, and became more valuable to NBA teams. (As Len Elmore, who has been a player and agent has said, you don't get any better fundamentally once you leave college.)

Wright is a pretty sure bet to be a solid NBA player. So why not go pro now, when he'd not make much more money (or might indeed earn less over his career) if he stayed in school?

NBA teams would still try to lure guys like Kevin Garnett or Kobe Bryant or Dwight Howard right out of high school. Brandan Wright? Maybe not.

Now, there's actually a penalty for staying in college. Since a player's salary is based on where he goes in the draft, rookies have their salaries pretty much set for their first five years in the league. Every year in school is one less year he can't cash in at the pro level. So if you might be picked fourth (like Wright) but actually go 10th, you're forgoing maybe $5 million at first. By his 24th birthday, however, he would be an unrestricted free agent. By staying in school, he's losing one year of earning power as a pro. And face it, making $11.6 million now as even the 10th pick in the draft ain't exactly monopoly money.

The perverse consequence of setting a rookie salary cap is that the NBA makes it more likely that kids will turn pro at their earliest convenience. The marginal cost of staying in school is millions of forgone dollars.

The only way to fix this is to dump the rookie payscale, and return to the days when it really was a gamble to go pro early.

Meantime, I hope Brandan returns. But I'd be shocked if he does.

UPDATE: He's gone.

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