Planet Money vs. the NBA’s Tanking Problem

The NBA has an incentives problem: the league's draft system rewards the worst teams with the best chance at top draft picks, creating a rational but corrosive incentive for teams to intentionally lose games—a practice called "tanking." This episode of Planet Money, hosted by Keith Romer and Erika Beras, treats the NBA's tanking crisis as an economics puzzle, examining how rule changes create behavioral responses and exploring three radical proposals to realign incentives. The conversation moves from the history of NBA draft reforms through specific alternative systems, drawing on insights from NBA analyst Zach Lowe, Hockey Hall of Famer Jayna Hefford, and World Cup champion Sam Mewis, all while maintaining the show's signature blend of rigorous analysis and accessible storytelling.

0:19The Tanking Problem and Its Roots

Every year as winter turns to spring, a strange phenomenon overtakes the NBA: die-hard fans begin rooting for their favorite teams to lose. As one fan quoted in the episode put it, "This is the only time in recorded human history where I'm not even the slightest bit mad that we're losing to the Brooklyn Nets." The hosts explain that this is "tanking season"—a period when some of the world's greatest athletes are paid millions of dollars to lose games on purpose. The Utah Jazz, for example, were up by 17 points against the Orlando Magic before their coach pulled the entire rotation and replaced them with G League players, effectively handing the game away.

The root cause is straightforward: the NBA gives teams with the worst records the best chance at top picks in the next draft. As Commissioner Adam Silver himself acknowledged, "Are we seeing behavior that is worse this year than we've seen in recent memory? Yes, is my view." Silver also stated that the league is considering "every possible remedy" to "align incentives." The hosts frame this as a classic economics problem: every system of rules creates incentives, whether for CEO stock options, greenhouse gas regulation, or the NBA draft. To change behavior, you must change the rules.

6:03The History of NBA Draft Incentives

Zach Lowe, longtime NBA reporter and analyst now at The Ringer, explains that the tanking problem boils down to incentives embedded in the draft system. In the 1960s and 1970s, the draft was simple: the worst team from each conference flipped a coin for the top pick, and picks were assigned in reverse order of record. The logic was to give hope to bad teams—let them get the next great star and improve. But as Lowe notes, "as long as that general incentive structure exists, teams are going to exploit it."

This came to a head in 1984, when the draft featured Hakeem Olajuwon and Michael Jordan. The Houston Rockets, recognizing the transformative value of landing either player, began sitting their best players and giving minutes to washed-up veterans. They lost 14 of their last 17 games, secured the first overall pick, selected Olajuwon, and went on to win two championships. The hosts note that 1984 launched a decades-long "game of cat and mouse" between teams tanking and the league trying to stop them.

The league's response was the lottery system: all non-playoff teams would have their names thrown into a drum, with random draws determining the top picks. This added randomness to reduce the incentive for "abject, obvious horrible tanking." But every new rule creates trade-offs. While the lottery reduced full-on tanking, it also made it harder for genuinely bad teams to improve—sometimes the worst teams ended up picking fourth or fifth, staying bad for years. The league has since tweaked the system repeatedly: in 1987, only the first three picks were lottery-determined; in 1990, the lottery was weighted so worse teams had better odds; in 1994, odds for the worst teams increased further; in 1996, they decreased slightly; and in 2019, the league flattened odds again, reducing the worst team's chance at the number one pick from 25% to 14%. Yet this year, with several highly touted college prospects, teams still find it worthwhile to tank.

12:08The Draft Wheel: Breaking the Connection

Lowe argues that if the goal is to eradicate tanking entirely, the solution is radical: "You have to snap the connection between a team's record and where it picks in the draft." One elegant proposal is the "draft wheel," which Lowe first learned about in 2013 at a bar in Las Vegas during NBA Summer League. The idea came from Mike Zarin, a Boston Celtics front office executive.

The wheel has 30 spokes, one for each first-round pick. All 30 teams are assigned to a spoke, and each year they advance one position around the wheel. Critically, the spokes don't go in sequential order—after pick one comes pick 30, then pick 19, then pick 18, then pick 7, then pick 6. The order is predetermined and random-looking. As Lowe explains, "It doesn't matter what your record is in this particular year. You pick where the wheel says you pick. And so there's no benefit to you being bad in this particular year or good in this particular year." Mathematically, the design ensures that every five years, each team is guaranteed one top-six pick and one pick between seven and twelve. After 30 years, every team cycles through all 30 picks.

Despite its elegance, the wheel faced resistance from teams for two main reasons. First, there's the fear that bad teams could get trapped in extended periods of poor draft position—if a team stinks and the next three picks on the wheel are 11, 29, and 16, fans might check out for years. Second, small-market teams worry that without the draft as a reliable path to superstars, they'll be unable to compete with glamorous markets like Los Angeles, New York, or Miami in free agency. As Lowe puts it, "Our best and most secure vehicle to getting a superstar player is being bad in the right draft and getting lucky in the lottery." The wheel never gained serious traction because any major change requires a vote of three-quarters of the 30 teams, and too many owners were opposed.

17:18The Gold Plan: Incentivizing Winning After Elimination

For a proposal that limits tanking while preserving hope for bad teams, the hosts turn to the Professional Women's Hockey League (PWHL), which launched in 2024. Jayna Hefford, Hockey Hall of Famer with five Olympic medals (four gold, one silver) and the PWHL's head of hockey operations, explains that being a young league allowed them to experiment. "We want to think outside the box, we want to be creative, we want to do things differently," she says.

The PWHL adopted something called the "Gold Plan," developed by Adam Gold. The system takes the standard reverse-order draft and adds a twist: once a team is mathematically eliminated from the playoffs, every game they win from that point forward works for them instead of against them. Whichever eliminated team racks up the most points after elimination gets the highest draft pick. Hefford explains the logic: "For the fans of a team that gets eliminated early, they have reason to continue to show up and to continue to cheer for their team to win games and earn points so that they can earn the top draft pick." She imagines a scenario where two eliminated teams face each other in the final game of the season, with fans going wild because a win means a better draft pick—"amazing sports theater."

The trade-off is that a team that is perpetually terrible might still fail to win even with this incentive, making it even harder for them to acquire top young talent. Hefford acknowledges this downside but remains confident the pros outweigh the cons. However, the hosts note that the NBA context is different—the financial stakes are enormous, potentially worth a billion dollars for drafting the next LeBron James. Under the Gold Plan, a cynical NBA team could still tank at the beginning of the season, then "turn it on" once eliminated. As host Keith Romer puts it, the Gold Plan is "like a dare"—would NBA teams really be willing to intentionally lose their first 20 or 30 games? He thinks mostly no, but it's hard to say for certain.

24:59Eliminating the Draft: The Milton Friedman Approach

The third and most radical proposal comes from the National Women's Soccer League (NWSL), which eliminated its draft entirely in 2024. Sam Mewis, World Cup champion, former professional midfielder, and now editor-in-chief of The Women's Game, explains how the system works: players entering the league can negotiate contracts with any interested team as individuals. If multiple teams want the same young phenom, they compete on salary, facilities, coaching, culture, and environment. "Now the clubs are competing to have the best facilities, the best coach, the best environment, the best culture, the best fans," Mewis says. There is a salary cap, so it's not complete free-market anarchy, but teams must decide precisely what a young player is worth and pay accordingly.

Mewis notes that the NWSL's motivation for eliminating the draft was not primarily about tanking. Two other problems drove the change. First, competition from England's Women's Super League (WSL)—teams like Chelsea, Manchester City, Manchester United, and Arsenal were willing to pay top dollar for elite players, and top players who didn't like where they were drafted could simply go overseas. Second, the NWSL allowed signing of very young players, but the league didn't want 16-year-olds forced to move thousands of miles across the country. Players under 18 were exempted from the draft, which meant the best young talent was skipping the draft entirely and choosing teams with great environments and good money.

One year into the experiment, Mewis says it's working well: "Anecdotally and feelings wise, the rookies did great." Small-market teams can still compete by creating appealing environments even without paying top dollar. However, she acknowledges that wealthier, more committed owners are likely to build powerhouse teams that keep getting better. The hosts also highlight a third perspective often overlooked in these debates: the players'. Mewis emphasizes that giving players more say in where they go matters for reasons beyond economics—including the history of abuse in the league, different state laws regarding women's rights, and varying levels of friendliness toward LGBTQ people. "Player autonomy and seeing these players as human beings who have a say in where they're going leads to better performance, better engagement with fans, better relationship with the club," she argues.

30:11The Trade-offs and What Comes Next

The hosts conclude by acknowledging the complexity: "It's trade-offs all the way down." The NBA declined a recorded interview but told Planet Money that fixing tanking incentives is on the league's radar, and the Board of Governors was set to meet later that month to discuss possible solutions. When asked what they would do as commissioner for a day, Erika Beras says she would eliminate the draft entirely, while Keith Romer favors the Gold Plan.

Zach Lowe, despite his long-standing opposition to abolishing the reverse-order draft, says he has become more open-minded after this year's tanking epidemic. "I've come to just sort of think more about what does the world look like when everyone has to try every year," he says. "And that's all we want from NBA teams. Just try, give a little. Play the game. Just play the game." Lowe is confident change is coming—"100%." He points to the public outcry, Commissioner Silver's public statements, and the fact that even Planet Money is doing a podcast about it. While he doesn't expect the draft to be abolished in two years, he believes "changes are definitely coming."

Conclusion

This episode matters because it demonstrates how economic thinking can illuminate problems far beyond traditional markets. The NBA's tanking crisis is fundamentally a story about incentives, unintended consequences, and the difficulty of designing systems that produce desired behaviors. The three proposals—the draft wheel, the Gold Plan, and eliminating the draft entirely—each represent different philosophical approaches to the same problem, and each comes with its own trade-offs between competitive balance, hope for bad teams, player autonomy, and fan experience. What stays with the listener is the recognition that there is no perfect solution, only choices about which values to prioritize. The episode also highlights how smaller, newer leagues like the PWHL and NWSL can serve as laboratories for innovation, testing ideas that the NBA might eventually adopt.

Key takeaways

• Tanking is a rational response to the NBA's draft system, which rewards the worst teams with the best chance at top picks; the league has repeatedly tweaked the system but never solved the underlying incentive problem.
• The draft wheel would completely sever the connection between a team's record and its draft position by assigning picks in a predetermined, rotating order over 30 years, but it faces opposition from teams worried about getting trapped in long periods of poor draft position.
• The Gold Plan, used by the PWHL, rewards teams that perform best after being eliminated from playoff contention with the top draft pick, creating incentives to keep winning but potentially punishing teams that are too bad to win even with the incentive.
• The NWSL eliminated its draft entirely in 2024, allowing players to negotiate with any team; this removes all incentive to tank but raises concerns about wealthier owners dominating the league.
• Player autonomy matters beyond economics: giving players choice in where they play can improve performance, fan engagement, and club relationships, particularly for vulnerable populations.
• Every system of rules creates trade-offs; there is no perfect solution, only choices about which values—competitive balance, hope for bad teams, player agency, or fan experience—to prioritize.
• Commissioner Adam Silver has acknowledged the problem is worse this year and the league is actively considering "every possible remedy," with changes expected in the near future.