The Rookie Scale and Draft Night’s (Financial) Winners & Losers

It’s only human during and long after each draft to wonder where a player “should” have been selected. Take the 2013 NBA Draft, when David Stern[1. !!!!!!] announced the selection of Anthony Bennett with the first overall pick. The suspense of who would draft Nerlens Noel, a popular choice for the first overall pick even after tearing his ACL the year prior, finally ended with New Orleans at sixth. Two years later, Bennett and Noel remain popular names when it comes to that rookie class. Maybe each player has a better career by now if they traded draft slots[2. When taking into account 40 mock drafts Jacob Rosen posted the night prior to the actual draft, Anthony Bennett and Nerlens Noel just about flip-flopped their average predicted draft slot, when Bennett averaged out to 5.20 and Noel was the highest at 1.98.] and situations, or maybe Noel is on the same course but Bennett’s isn’t as rocky. We’ll never know, but discussions like these come up anyway.

What’s often missing when it comes to re-ordering a draft is the financial impact. The first round is scaled according to draft slots, and those at the top make significant money right away. That also means the top prospects pay the steepest price should they fall down the draft board, and where rising has a huge payoff. Using Bennett and Noel again as an example while assuming each plays out all four years of their rookie contract, the former player will have made about $10 million more than the latter before hitting restricted free agency[3. Last summer, I fooled around with that layer of fun for every rookie class since 1995, but this post covers the 2015 NBA Draft.].

That difference can be made up in future contracts. It would also probably be more useful to construct a weighted range when it comes to a prospect’s potential draft slots and comparing it to what they’ll make at their actual one tonight, but I can’t say I could confidently do that. This post is meant to keep things simple by comparing the slots of this year’s first round, and can be applied after tonight when we have names attached to them. For starters, below is a look at the rookie scale for the 30 picks. It assumes each gets a 20 percent bump in salary that can, and usually is offered, and also assumes all four years of the contract are played out. You can view each year on RealGM:

As mentioned earlier, there is significant money at the top and good reason for highly rated prospects to enter the draft rather than wait another year. The difference in the first and ninth pick is about $14 million, but the difference between the tenth and 30th pick is about $5.5 million. For visual purposes, I posted only the top 10 picks compared to each other, but here is a link comparing each of the 30 slots.

Not every first-round pick gets the 20 percent bump in their salary, though, and no draft class has been that good since the fourth-year team option has been available. Since the rookie class of 1999, an average of seven players in each first round do not get their fourth-year team option exercised[4. Doing a quick run through Basketball-Reference, the rookie class of 1999 has a remarkable first 10 picks, but 10 of the last 19 did not have their fourth-year options picked up by their team. 12 of the 28 first-round picks in 2002, and 12 of 30 in 2006 suffered the same fate. That’s nearly half of each first round. Since the class of 1999, 30 lottery picks and 71 mid to late first-rounders did not get their fourth-year option exercised.], but sometimes a player makes more money under the first year of their second contract than the last of their rookie deal[5. In 2007, Marcus Banks had his $2.5 million team option declined by Boston only to sign a five-year, $21.3 million deal with Phoenix with year one paying out just under $3.7 million. Tyronn Lue, after being released by the Lakers in 2001, signed a deal with Washington that paid him slightly more than what his fourth-year team option was worth. There are other examples, but most involved the team they were with before.]. Going forward, it’ll actually be interesting if that happens again, given the skyrocketing salary cap over the next few years.

But those who were sold on Jahlil Okafor going first overall after the lottery now can see the likely $2.7 million difference if he drops to the second pick. Unless there’s something completely flying under the radar, though, Okafor, Karl-Anthony Towns, and D’Angelo Russell would never slip to, say, tenth, but we could have some fireworks once those three are off the board. The draft is never not weird, and hopefully this post allows those watching it to check here when something happens out of the ordinary.