The Sixers, Rent-Seeking, and the Lottery Wheel

LB readers understand that the Sixers front office is pursuing the most rational strategy for creating a championship-caliber basketball team. Whether one calls that strategy "tanking," "putting a terrible roster on the court," or just "embarrassing," the goal is the same: accumulate losses at a prodigious rate to improve the team's draft position. LB readers support this strategy because it is the only strategy available to the front office to break through the mediocrity of the Doug Collins Era and clean up the messy result of the Andrew Bynum trade.

The aims of this strategy are well known: the Sixers should obtain four lottery picks in two years. The Sixers will then bolster the roster with (a) highly-talented acquisitions through free agency and (b) bench players acquired as high-upside second round draft picks on non-guaranteed contracts.

However, if the team's front office drafts well this year (and last year's draft provides sufficient assurances that they will), Sixers fans and management should prepare to support a new strategy in the near future: rent-seeking.

The NBA is essentially a highly regulated market. In other industries, regulations comparable to the draft lottery, the One and Done Rule, and free agency are often considered "barriers to entry"; these barriers to entry have the effect of supporting incumbent businesses at the expense of new entrants. (Natural market conditions also serve as barriers to entry, though incumbent firms will have little control over those conditions absent government intervention or cartel behavior.) In an effort to dampen competition, incumbent firms often engage in expensive government lobbying called "rent-seeking" to keep barriers to entry in place.

Many LB readers seem opposed to the lottery wheel largely because they resent the Sixers being singled out for pursuing what is the most rational strategy for a team in their position. Once the rebuild of the Sixers is complete, however, Sixers fans and management should engage in rent-seeking by lobbying Adam Silver and the NBA to introduce the lottery wheel or any other suitably draconian solution to the purported problem of tanking that makes the Sixers' present strategy impossible for future mediocre teams to follow.

Sixers fans and management should also support any rule that restricts the flow of cheap, young, productive players into the NBA. This restriction will have the effect of reducing the length of a young star's career for another team.

Similarly, after the Sixers (presumably) sign a talented free agent, there should also be support for any changes that make the free agency process less attractive to players or more costly to teams signing free agents. Changes to free agency would reduce the likelihood of one of the Sixers' core four lottery picks leaving without any benefit to the team. Of course, changes to free agency are the most difficult to effect because of the collective bargaining agreement.

Because future players are not subject to the CBA, and because the carping about the Sixers' current strategy has produced so much negative publicity, a solution to the problem of tanking related to the NBA draft is the most likely to be adopted. Sixers fans and management should welcome the adoption of these solutions because they cannot be enacted this year and will have the effect of locking in the Sixers' competitive advantage. Although a future strategy of rent-seeking will invite critics to claim hypocrisy, surely that criticism won't keep Sixers fans and management up at night during the playoffs.

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