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How the Pick Protection Took Over the NBA Transaction Game

Top-three protected. Lottery protected. Reverse protected. Practically every draft pick dealt these days comes with a caveat. This is the story of the GM who pioneered the approach, and how that little trade wrinkle helped shape the modern NBA.

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A lot has changed since Rick Sund ran basketball operations for the Dallas Mavericks in the 1980s. In the middle of one of our conversations last month, Sund—now semi-retired, working as an executive for the Beijing Ducks—toggled between the nightly NBA box scores on his iPad, identifying new data points for a scoring trend he’d noticed this season. It was a far cry from his old morning routine in Dallas, when his first task of the day was thumbing through a copy of USA Today to see who played in the games that began just as he was heading to bed. Without instant access to game film and with highlights still decades away, the agate page was all that even the most involved basketball executives could muster for basic intel. Any further reconnaissance required fraternizing with the enemy. “You could only tell so much from stats,” Sund told me. “So we would develop these little cliques of people. Like, Jerry West, for example. We talked almost all the time.”

Executives were constantly on the phone with each other, sharing scouting reports, swapping notes on players they might be interested in from the other team. “It was a completely different time period,” Sund said. “There was a closeness with our colleagues that we would call. We had that type of dialogue. We were competitors, but we had to be comrades as well.”

In the fall before the 1984-85 season, Sund got a call from Tom Newell, the Indiana Pacers’ director of player personnel. The Pacers were in bad shape, having finished the past two seasons at the very bottom of the East. Years of investing in older players at the expense of acquiring young cornerstones left their talent pipeline barren. The Mavericks had the opposite problem: There was more young talent on their team than they had minutes to accommodate. Sund saw the potential for a deal.

He and Mavericks cofounder/general manager Norm Sonju (whom Sund reported to) knew Bill Garnett, a big man they’d drafted fourth two years prior, would lose his minutes to incoming rookie Sam Perkins; and they knew Terence Stansbury, whom they drafted 11 picks after Perkins, wouldn’t be able to crack the rotation with budding star swingmen Rolando Blackman and Mark Aguirre commanding minutes. The two also knew that the Mavericks didn’t need any more players on their roster. Their return would have to be a first-round pick, to be conveyed well down the line.

Newell and Pacers GM Bob Salyers were hesitant. The NBA had just recently made a foundational change to the way draft orders would be set, implementing a lottery system to counter the rampant tanking that had polluted the end of the 1983-84 regular season. To give up a future first-round pick that could potentially become the no. 1 pick would be a team-killing blunder, which was saying something given the Pacers’ recent history.

Indiana had the no. 1 pick in the 1978 draft, in which hometown legend Larry Bird, who had just completed his junior season, was eligible to be selected. In accordance with the rules of the time, even if Bird was selected by a team in 1978, he would be able to reenter the 1979 draft if he didn’t agree to contract terms prior to the end of his senior season. Wanting help immediately, and weighing the risk of losing his rights completely, the Pacers opted not to wait for Bird’s services and traded the first pick to the Portland Trail Blazers for the third pick and point guard Johnny Davis. (Bird, of course, was drafted at no. 6 by the Boston Celtics, who were rewarded for their patience.)

In 1981, the NBA established a free agency system that gave teams the right of first refusal on all players becoming free agents (in essence, what is known as restricted free agency today was free agency, period, for the bulk of the 1980s). The Pacers’ starting center, James Edwards, was targeted by the Cleveland Cavaliers at a price untenable for Indiana, so, to offset their loss, the Pacers went back to the well with the Blazers. They traded for Tom Owens—a 31-year-old who took the reins in Portland after franchise center Bill Walton’s departure—in exchange for their 1984 first-round pick. Owens lasted a season with the Pacers before he was traded to the Pistons, and spent his final basketball-playing years in Italy. The 1984 pick Indiana offered landed at no. 2 and the Blazers used it to select center Sam Bowie, whose legacy is unfortunately tied to the player drafted immediately after him. Portland’s blunder is a part of the NBA’s Michael Jordan–centric pop folklore; Indiana’s, while arguably worse, is a footnote.

“The fact that Michael Jordan was selected with the third pick of that draft probably came back to haunt them,” Sund said.

Which takes us back (and forward) to the Mavs and Pacers at the negotiating table in 1984. Sund wanted a first-rounder from Indiana, but understood the Pacers’ perspective: “They’re a rebuilding team—if things don’t work, they’ve got to have a certain amount of protection,” he said. “And so that’s what we did.”

The trade that was agreed upon: Indiana would receive Garnett and Stansbury in exchange for a 1990 first-round pick, which would be conveyed to Dallas so long as the pick landed outside of the top seven; if it landed inside of that range, the pick would be conveyed in 1991, without condition. The Pacers front office considered it a win, despite the regret-in-hindsight that informed the trade’s inception. “The Tom Owens trade was very helpful,” Salyers told The Indianapolis Star, after the ’84 trade was made. “We hopefully have learned from our past mistakes.”

It was a forgettable outcome, all things considered—just ask the Pacers exec who negotiated it. “1984, Orwell, I remember ...” Newell told me in an email. “[The] Stansbury and Garnett trade not so much.” But the deal marked the very first instance of a pick protection, a necessary wrinkle in the face of an impending draft system that removed a layer of control from franchises.

Pick protections have now come to define the NBA’s modern age as much as the 3-point shot. There has been a protected pick involved in every draft since 1996, every trade deadline since 2008. It is an essential front-office negotiation tool in that it fully acknowledges the speculative value of a draft pick. An otherwise forgettable trade between the Pacers and Mavericks in 1984 created a powerful means of establishing equity in NBA transactions, highlighting a shifting tide in how trade value would be assessed in the ensuing decades.

Philadelphia 76ers president Daryl Morey, who has seldom met a pick he couldn’t protect, has a preferred analogy for draft picks. “I call it cigarettes in prison because it’s our only means of exchange,” he told me last month, echoing what he’d said at the 2018 Sloan Conference. “But just like cigarettes in prison, it’s not a reliable means of exchange. If they’re scarce, they’re worth a lot; the context changes their value greatly and randomly. We create this false market of draft picks because you can’t use anything else as a means of exchange, so it’s all of these distortions to value.”

While Morey has been lauded for his forward-thinking moves since joining the NBA front-office ranks in 2002, the market had been established by one team in particular that saw the future before the rest of the league—and long before Dork Elvis was given the reins to hunt inefficiencies for sport.

“Dallas, I believe, it was one of their picks that made the league revise the rules to be more restrictive,” Morey said. “They were doing creative stuff.”

At the foundation of that ingenuity was the brain trust of Norm Sonju and Sund. Sonju had run the Buffalo Braves front office, but in the late ’70s, he had a vision for NBA basketball in Dallas. So he went looking to hire a scout for a possible Dallas expansion team that was nowhere close to a sure thing. Sund, then an intern working in Milwaukee, was recommended by Sonju’s good friend Don Nelson, then the Bucks GM. In his first interview for the job, Sund, then only a few years out from a basketball scholarship at Northwestern, brought all of his expense reports with the Bucks, to show him the cost of doing the job right. Sonju appreciated the honesty. Sund was Sonju’s first team hire, for what was then a nameless startup. Sonju and his wife paid for Sund’s salary themselves. “A couple thousand dollars a month,” Sonju said. “Not very much money, but again, it was out of our paychecks. We were doing it not knowing we’d ever get a team.”

Dallas Mavericks v Sacramento Kings
Long before The Process, Norm Sonju and Rick Sund built a winner in Dallas around Mark Aguirre by acquiring draft capital.
Rocky Widner/NBAE via Getty Images

Together, they reimagined the potential and trajectory of an NBA expansion team fresh out of the box. Sonju recalls sharing with Sund a notebook that contained his team-building philosophy. There was no beating around the bush: They were going to be awful. There was no way to escape that fate when expansion team rosters are, by rule, built by sifting through the detritus of the league. Sund researched the history of expansion teams before them and quickly realized how insignificant expansion draft players were to the eventual success of the franchise. But what if they could leverage the expansion draft process to their advantage? Sund, then only 27 years old, began digging for intel—which players teams might place on the expansion draft chopping block, which players from that lot teams might be interested in acquiring. “I spent a month talking to every GM,” Sund said. “And I’m a kid. People didn’t know who I was unless they happened to scout Northwestern. You have no idea how nervous I was calling Red Auerbach.”

The Dallas franchise was approved by the league owners at the 1980 NBA All-Star Game. Four months later, the Mavericks held their expansion draft, during which Sonju and Sund’s strategy became clear. “We basically drafted players who might have sex appeal to other teams because we knew very few of them would be on our club on any length of time if we got better,” Sund said. In the Mavericks’ first nine months with an active, functioning roster, Dallas managed to make seven trades, netting three future second-round picks and six future first-round picks. They had played all of 56 games as a franchise at that point.

“We ended up, by the fourth season, having won more games than any of the other expansion teams,” Sonju said. “Even though our philosophy was to trade all of the players we could get for a future first-round pick.”

Roughly half of those seven trades now live in infamy: From September 16, 1980, to February 7, 1981, Sonju and then-Cavaliers owner Ted Stepien agreed to three separate trades, wherein Stepien relinquished Cleveland’s 1983, 1984, 1985, and 1986 first-round picks to the Mavericks, all for players that Dallas had acquired in the expansion draft. Everything was going according to plan. “They were willing to make the trade,” Sonju insisted. “There was no gun put to anyone’s head.”

NBA trades are made on a conference call with any relevant team representatives and a league official, wherein the terms and conditions of the proposed deal are laid out for office approval. Sonju remembers being chewed out by Scotty Stirling, then the NBA vice president of operations, during the last of the trade announcements, in February 1981. Stirling was yelling over the phone, accusing Sonju of screwing up the league.

What do you mean screwing up the league?

“You’ve already got two other picks from them,” Sonju recalled Stirling saying. ‘You’ve got three now. They can’t get better!”

Well, don’t think I didn’t know that—that’s what I wanted, Sonju thought to himself.

“But that was just how crude it looked to people, like we were stealing,” he says now. “We weren’t; they were fair trades. Then when they put the lottery in, that really cheapened the trades that I had made several years earlier in good faith with the rules that were there then.”

The Cavaliers’ ignominy—or the Mavericks’ ingenuity, depending on how you choose to look at it—was memorialized through a rule change in the NBA bylaws, colloquially known as the Ted Stepien Rule. It states that teams are not allowed to make trades that would leave them without any first-round picks in two consecutive future drafts. The origins of the Stepien Rule remain an important time capsule of the era, when the true value of non-player assets had not yet been appraised leaguewide. In 1980, two unprotected first-round picks were worth two journeyman backup centers. In 2021, it took three unprotected first-rounders to land James Harden, one of the greatest offensive players in basketball history.

Sund experienced firsthand everything that happened to the league across those four-plus decades. He’s weathered lockouts, boom times, the introduction of the salary cap, countless draft restrictions and free agency amendments, and a procession of rule changes over the years that seemingly undermine front office creativity. He was an intern under his mentor Wayne Embry with the Bucks the year they traded Kareem Abdul-Jabbar to the Lakers; he was a senior consultant to the Atlanta Hawks as they entered the Trae Young era. Sonju remembers the early days of their Mavs run, back when Sund was the youngest basketball ops director in the league.

“He would sit in my office, literally next to me, when I’d make the phone calls to the GMs of the other teams. And he would watch and observe,” Sonju said. “But he worked like crazy, and he was really good. Over time, he got so good that he basically ran all of the trades himself.”

While Sund, 69, is decidedly old-school in his approach by today’s standards—in his latter years as a consultant, he had to convince his new-school colleagues during meetings that negotiating trades via text was a bad idea—his time building the expansion Mavericks out of intangible trade assets made him a de facto futurist. And a futurist knows that history often echoes forward.

The Vancouver Grizzlies were, unsurprisingly, an abject disaster in the summer of 1997. One of the league’s newest expansion teams, they spent their first two seasons in the pit, finishing with the league’s worst record in both campaigns. The Grizzlies were desperate for talent and veteran experience. But only a GM who had been in their shoes could know how desperate they were. Sund, who by then had taken the GM seat of the Detroit Pistons, knew: The 1980-81 Mavs had the same putrid record (15-67) in their inaugural season as the Grizzlies did.

Sund had a plan. “I said this: We’ll give you our starting power forward, we get a first-round pick.’”

Detroit would send 13-year veteran Otis Thorpe to Vancouver for a future first-round pick. To make things equitable, Sund laid out protections in the form of a range: The Pistons would accept a pick that landed anywhere from the no. 2 pick to the 18th, meaning the Grizzlies would be protected should they win the lottery outright, and the Pistons would be guaranteed a pick that wouldn’t be at the bottom of the draft. But Sund didn’t specify which draft year the pick was to be conveyed; it was the Grizzlies’ choice, so long as the pick was relinquished in the next six years. It was front-office behavioral psychology at work.

“Our thinking at the time was: When you’re an expansion team, they’re not going to give up a top-10 pick,” Sund said. “They’ll get seduced by the draft, and when you get seduced by the draft, they’re not going to trade it. So I said we probably won’t get this pick for six years—when it’s going to be a very, very good pick. Which is what they did. They waited until the very last year.

“That was the year that LeBron came out.”

Sund never got to harvest the fruit of his labor. He had moved on to run the Seattle SuperSonics by the time the Grizzlies finally conceded the pick in 2003, which landed at no. 2—just as the ill-fated Tom Owens trade did between the Pacers and Blazers in 1981. Like Owens with the Pacers, Thorpe didn’t last with the Grizzlies; in fact, the Grizzlies would wind up trading him at the deadline six months later. The Pacers and Grizzlies trades are now considered among the most lopsided in NBA history; they are, in a way, historical twins, both in cause and effect. With the pick, new Pistons GM Joe Dumars selected Darko Milicic, the Sam Bowie of his era.

Daryl Morey cut me off with a sigh as I recited the particulars of the Otis Thorpe trade over the phone. “That’s the stuff they got rid of,” he said. “They don’t allow those complex deferrals anymore.” There is a peevishness in his voice. “You used to be able to do so much more.”

Trade restrictions made by the league offices were more aggressively levied and codified in the early 2000s, likely a response to Sund’s creative maneuvering in the Thorpe trade. “If I remember correctly, after that trade, they were like, it can’t be as complicated or as restrictive as we made it,” Sund said. “We were making picks very complicated to acquire, which made it difficult for the league to track.”

Understanding what exactly is or isn’t allowed with regard to trading non-player assets gets tricky; it’s not always clear to even the most aggressive general managers. Unlike most aspects of basketball operations, most specific trade rules are not found in the league’s collective bargaining agreement, because, as CBA expert Larry Coon noted, “the CBA is an agreement between the league and the players. Future draft picks are not players; they’re just a commodity that teams own.” Instead, the rules may be found in the NBA’s operations manual, various memos, or bylaws, all written in paint-drying legalese. Or they might not.

“Some of it is written down, some isn’t, and that’s part of the problem,” Morey said. (“If you can get Sam Presti on the phone, you’d get a whole earful on that,” he added.)

Morey may not have invented pick protections, but he is instrumental in understanding its impact on the modern NBA landscape. Trading draft picks, and the ways in which they are conveyed today, has become a small outlet of creative expression born of the constraints imposed by the league. Morey has stood at the vanguard in that respect, molding the conceptual value of draft picks like a glassblower. In 2012, Morey and his Rockets front-office team introduced the concept of reverse lottery protection: guaranteeing that the recipient is given a lottery pick, rather than guaranteeing that a pick landing in the top 14 stays with the sender. The trade, between Houston and Toronto, in hindsight, was a monumental win-win. The Raptors landed Kyle Lowry, now considered the greatest player in franchise history; the Rockets netted a lottery pick that would become the linchpin of their trade for James Harden. “The reverse protection of the pick was to create a great asset in hopes of using it in a trade,” Morey said. “Now, did we know that James Harden would be available in a trade three months later? No, absolutely not. We were just trying to set up our asset base for the future.”

Landing a reverse-protected first-round pick from Toronto for Kyle Lowry ultimately helped Daryl Morey trade for James Harden in 2012.
Bill Baptist/NBAE via Getty Images

Other potential innovations to the art of pick protection didn’t quite make the cut. In an episode of The Woj Pod last year, current Sacramento Kings GM Monte McNair recalled a fascinating proposal during his time in the Rockets’ analytics department, made before the Lowry trade. The Rockets had three picks in the 2012 NBA draft: no. 12, no. 16, and no. 18. Prior to the draft lottery, Houston got in touch with Golden State about its draft pick, which was likely to land at no. 7, but had the potential to move up. The Rockets offered their no. 16 pick for the Warriors’ pick, as long as it stayed at no. 7. If it moved up, the Warriors would essentially receive the Rockets’ no. 16 pick for free. “Ultimately, both teams got a little scared,” McNair said. “That was a little crazy.”

Morey has also proposed roulette-style pre-lottery trades: If the pick lands on an odd number, it goes to one team; if the pick is an even number, it goes to the other. None of those has made it to a trade call—yet. “I’m always trying to grease the wheels of transactions, because I think it helps teams that are run aggressively,” he said.

It’s fair to wonder whether teams have reached the outer limits on pick protections under the current system, and what the future holds for the value of draft picks in general. The option for teams to swap picks—which first occurred in 1980, nearly four years before the first pick protection—has become a more common stipulation in trades: There have been more pick swaps (30) since 2011 than in the previous 30 years (26) combined. The pick swap gives teams another way to create equity without having to relinquish an actual asset—because many teams in the league don’t have any to give up. According to ESPN’s Brian Windhorst, half the league is unable to trade a first-round draft pick this season, due to the aforementioned Stepien Rule and other restrictions. That certainly tracks, given the hoarding of first-round picks by teams like Oklahoma City, New Orleans, and Houston through recent blockbuster trades. “The value of a pick—things have changed, and strategies have changed,” Sund said. “You can talk out of both sides of your mouth. I think people really put a premium on draft picks, but they also think losing a draft pick isn’t that big of a deal.”

The Rockets, in amassing three unprotected first-rounders and four options to swap picks in exchange for Harden, have a rosier outlook than one would expect given the fact that they were forced to trade a generational talent. In collecting a trove of picks, teams—typically in a small market—brandish a weapon of the weak. As for a big-market team like the Nets, trading away unprotected picks is a justifiable risk to land a player of that caliber. Morey understands the rationale, but leaving a pick unprotected still leaves him a bit queasy.

“There have been some big-time players moving where unprotected picks you can justify,” Morey said. “But I try to avoid it. It’s so horrible for the franchises; if you have a bad year and your pick is going unprotected somewhere, the poor franchise might as well just disappear for a year. You are literally the most irrelevant thing on Earth.”

Morey believes there are ways the league can make the inefficient market just a bit more efficient. As it stands, draft picks can only be swapped or delivered within seven years. Other conditions unrelated to time of delivery are not allowed. That wasn’t always the case; from the 1970s to the early 1990s, a handful of trades involved conditional picks contingent on a traded player still being on the roster after an agreed-upon date. Such trades vanished by 1995, when the NBA’s rules were more readily and officially codified. The ability to add conditions to picks based on performance remains Morey’s white whale. “In the NFL, for example, you can do things like: I’ll send you this player and you give us one second, but if your team makes the playoffs, you give us another second,” he said. “Which helps a lot, because obviously a lot of trades at the deadline are about helping your playoff run. So if you can make the competition conditional, that’s really helpful.”

Minutes after our talk, Morey texts me a link to an Adam Schefter tweet. The Philadelphia Eagles had just agreed to trade quarterback Carson Wentz to the Indianapolis Colts for a 2021 third-round pick, and a conditional 2022 second-rounder that would turn into a first-round pick if Wentz plays 75 percent of the team’s snaps in 2021—70 percent if the Colts make the playoffs.

“The nba needs this!” he lobbied via text.

Morey’s vision remains unattainable for now, but he still has some time to concoct some protections that’ll make life difficult for the league and its lawyers before the deadline. “I think we’re one of the only contenders that still has the ability to trade first-round picks in a material way,” he said. “It should give us an edge; we’ll see.”

Danny Chau used to work here. These days, he’s just a friend.

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