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What a 1st-round pick in the NBA Draft is really worth, and why

What makes the NBA Draft such a big deal, anyway? Here's a breakdown of why choosing the right player in the draft is the easiest way to build a good team.

First-round picks in the NBA Draft are some of the most valuable assets on the trade market. There are reasons for this! Here are the most important.

The rookie salary scale

Back in the early 1990s, there was no restriction on salary for first-round draft picks. Glenn Robinson, the top pick in 1994, signed a 10-year, $68 million deal before he'd played a single NBA minute. That changed when NBA owners and players agreed to create a salary scale for incoming players capped at a relatively small percentage of max team payroll. This year, the No. 1 pick will sign a deal worth $8.8 million guaranteed over two years. The deal is for a maximum of $19 million over four years, which is just below the average NBA salary.

High-performing first-round picks with less than four years of experience are consistently the most cost-effective performers in the league, largely because they make such little money comparatively. Anthony Davis, the No. 1 pick in 2012, made about $5.4 million last season despite being named an All-Star. He had no negotiating power because of the rookie salary scale.

The only real risk is the opportunity cost of the pick itself

The rookie salary scale feeds into another reason first-round picks have such high value: because salaries are low, the only risk involved is the opportunity cost of blowing the pick on an underperforming player. Take Cleveland for example: the Cavaliers picked Anthony Bennett No. 1 in 2013. So far, this looks like a bad pick. But Bennett's salary ($5.3 million) isn't any sort of burden for the Cavs, and only the first two years of his rookie deal are guaranteed, per the league standard. Salary nor roster space will cause problems for Cleveland. The only long-term effect of botching the pick is that the Cavs missed out on more productive players they passed up to take Bennett at No. 1.

The further down the first round you go, the less the opportunity cost plays a role. Why? Because top talent is concentrated toward the front of the first round. You're much less likely to leave an All-Star on the board by botching a pick at No. 20, for example. Late first-round picks can be riskless dice rolls.

Teams effectively control their star draft picks for seven years

While rookie scale contracts are only four years long, teams have a massive advantage in keeping their young stars at least an additional three years. This advantage is found in the early extension clause. After a first-round pick has played three seasons in the NBA, he can negotiate with his team an early extension that kicks in after his fourth year. The contracts must be for a minimum of three years guaranteed, but can go up to five years.

Players like these extensions because they protect against injury. If a player were to not get an early extension and then get injured in his fourth season, he'd go into restricted free agency with lower bargaining power. Teams like signing early extensions for stars because it prevents free agency until after the player's seventh year. These are especially helpful when you know you have a star (Blake Griffin, Derrick Rose, Kevin Durant) on your hands or when the team can get a discount by committing early (Stephen Curry). These contracts go almost exclusively to extremely productive first-round picks.

It's the only way for some teams to get stars

The most important reason first-round picks are so valuable: for much of the league, the draft is the only path to landing a star. Legit NBA stars get traded less often than you think -- that's why it's such a big deal when bidding wars do open up, as in the case of Kevin Love -- and a few markets seem to have a big advantage in drawing high-performing free agents.

That cuts off two of the three paths to team-building, so the draft takes on outsized importance, especially in smaller, non-glamour markets. Look at a franchise like the Raptors, which has now been around two decades: all of the team's most recognizable players, from Vince Carter to Chris Bosh to DeMar DeRozan, have been draft picks, not acquisitions.

The first-round pick is a symbol of hope that you can sell to fans

This is how tanking for a high pick becomes palatable. Fans are smart, and they understand that building through the draft is the best route for most franchises. So teams intending to build through the draft load up on picks, which can be presented as symbols of hope. This sorcery only lasts so long -- see: the Cavaliers -- but it can be a great cover for those 15-win seasons. The draft has become a method to get fans to root for 60-loss teams. It doesn't work when, like the Knicks, you incessantly trade away your picks.