All of the Major Sports Leagues in the United States

question 22

Essay

All of the major sports leagues in the United States use a reverse order draft to promote competitive balance. The NBA is unique in that it utilizes a "draft lottery" such that the worst team in the league is not guaranteed the top pick in the draft but instead only receives the highest probability in the lottery to receive the top pick. Why does the NBA use a draft lottery? Why might it be the case that only the NBA uses a lottery while the other leagues use a straight reverse order draft?

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Definitions:

Maturity Date

The date on which a financial obligation must be repaid or settled in full.

Principal Repaid

The amount of a loan's principal that has been paid back to the lender, not including interest payments.

Face Value

The nominal or dollar value printed on a security, such as a bond or stock, representing its worth at issuance.

Interest Dates

Specific dates on which interest payments are made by the issuer of a debt instrument to the holders.