The Winning Losers: Combatting the Economic and Competitive Balance Effects of Tanking in the National Basketball Association

In order to establish sustainable parity in competition year over year, all four major professional sports organizations in the United States have established a first-year draft with an order decided or influenced by their Win-Loss record the previous year. The assumption is that this draft structure should keep all teams competitive. Rather, there is an overwhelming shift to analytical problem-solving that suggests building a winning team requires a period of losing and collecting young talent. The separation has become so apparent that it has been referred to as, “Twelve teams a-tanking.” (Boras, 2018) The trend was so pronounced this last season that the seven worst teams that held their own pick all lost by more than 15 points in the span of two days.(Sheinin, 2018) This leaves the ratio of games with a 15 point or more point differential to that of less than 15 points was 8:9 on the date described by Sheinin, as opposed to the usual ratio of 2:5 for the rest of the season. This stretch of games occurred during a pivotal time in the season and should have garnered high interest for entertainment as teams grapple for playoff position heading into the post season. Instead, viewers were treated to seven blow-out games. In this thesis, the effects of tanking will be studied as it pertains to the NBA, as a whole, losing attendance in multiple aspects. This applies directly to the value of sponsorships in the NBA. In short, this thesis will answer three of questions; (1) How does expected point spread, which is highly affected by tanking, affect NBA attendance, of all teams, down the stretch of games? (2) How can the NBA protect its sponsors from the effects of tanking? (3) How can NBA sponsors protect themselves from the effects of tanking?