The Worst Team Picks First. That Is the Whole Point

Instead of new players negotiating with whichever club they prefer, an annual event allocates the rights to them in a fixed order. Teams select in turn, with the order usually running from the worst performing team of the previous season to the best, and the process repeats over several rounds. A selected player may only negotiate with the team holding their rights. The arrangement is common in North American professional leagues and in Australian football, and is essentially absent from European football, where clubs buy players directly.

The justification is competitive balance:

• •A league where one team always wins loses its audience
• •Wealthy clubs would otherwise sign the best new players every year
• •Reversing the order sends the best prospects to the weakest teams
• •Which should push every team towards the middle over time
• •Uncertainty about results is what people pay to watch
• •The system also suppresses what new players can be paid

Rewarding failure with the first choice produces the obvious problem, which is that a team out of contention gains from losing. The behaviour has a name in every league that uses the system and includes resting healthy players, trading away good ones mid-season and fielding weak line-ups once the season is effectively over. Leagues respond with lotteries that randomise the order among the worst teams so that finishing last does not guarantee the first pick, with weighted probabilities, and with rules about competitive effort. None of these has eliminated the behaviour.

The selection creates a tradable asset and that secondary market is where much of the strategy happens. A team holding an early selection may trade it to another team in exchange for players or for several later selections, so the order on the day bears little relation to where teams finished. Selections in future years are traded as well, which lets a team rebuilding for the long term accumulate them and a team trying to win immediately spend them. Valuing one selection against another is a well studied problem, and published charts assigning point values to each position are used in negotiations.

The system restricts where a worker may work and what they may be paid, which is unusual and has been challenged repeatedly. Courts in several jurisdictions have found such arrangements to breach competition or employment law where they were imposed unilaterally, and they survive largely because they are agreed in collective bargaining with player unions in exchange for other concessions. Players drafted by a team in a city they do not want to live in have limited options. Evidence that the system actually produces competitive balance is also weaker than its defenders assume.

Allocating new players in reverse order of last season's results is meant to stop strong teams accumulating talent and to keep results uncertain, which is what audiences pay for. It also rewards losing, so leagues use weighted lotteries to blunt the incentive without removing it. The arrangement restricts where players may work and survives mainly through collective bargaining.