The Secondary Market in Draft Rights

The Secondary Market in Draft Rights
Feb 14, 2005, 01:17 pm
By Robert Windrem

With the continuing success of international players in the NBA and league GMs' desire to find mature players wherever they can, a new secondary market in draft choices is likely to open up soon: the rights to previously drafted European and other international stars.

Nearly two-thirds of all NBA teams hold the draft rights to more than 35 international players, all but two of them taken in the second round. Two teams, the San Antonio Spurs and Portland Trailblazers, own the rights to four players each. It's that second-round status that makes the market so appealing. Unlike first-round choices, with second rounders, team and player can negotiate quite freely. There is no guaranteed three-year contract, no sliding scale of salaries that must be adhered to. A team can pay a player as little as the league minimum or as much as it wants to lure him from his international team. And like draft choices, the rights can be traded quite freely with almost no restrictions because the draft rights have no monetary value under the NBA's Collective Bargaining Agreement and can be used as value-added in complicated deals.

As the number of draft rights proliferate, general managers may be asking themselves the following question during trade talks: What's a better bet? Is it the "bird in hand" -- the established European player -- or one in the bush -- a second rounder whose name you don't know and may not even care to know.

In a handful of cases, the players drafted late in the second round a few years ago are now a lot better bet than players who will be chosen in the first round this season. It's that calculus that should drive the secondary market.

In recent years, only a small number of draft rights have been traded. Croatian shooting guard Gordan Giricek's were traded twice before he got to the NBA. After being drafted at No. 40 by the Mavericks, his rights were first traded to the Spurs for the rights to the high school bust, Leon Smith, then again from the Spurs to the Grizzlies for cash and a second round pick. Darius Songaila is another good example. He was picked by the Celtics at #50 in 2002, spent a year playing for CSKA Moscow and was then traded to the Kings in exchange for 2 future second round picks. Considering where he was drafted and his price tag, Songaila has been very successful for the Kings so far.

Serbian point guard Milos Vujanic's rights were traded from being the property of the New York Knicks, being picked at No. 34, to the Suns in the Stephon Marbury trade. A few others have moved over the years: the rights to two 7'4" projects who coincidentally play for F.C. Barcelona, Roberto Duenos and Remon Van Der Hare, have been moved as fodder in trades of other players. Now, however, with so many draft rights out there -- 10 international players were selected and stashed last year -- it's inconceivable they won't start to become a valuable commodity.

Here's how it works: in each case, the player was drafted and permitted, even encouraged, to stay overseas and develop his game. In some cases, the player has stayed in Europe for a year; in others, he has played for several years after being drafted. If the player doesn't succeed, the risk is minimal, because players chosen in the mid- to late- second round rarely make the team that drafted them. The reward, on the other hand, can be huge.

And the draft rights don't expire. Some of those players, like Serbian Dejan Bodiroga -- a 6'9" shooting forward who was arguably Europe's best player in the 1990's -- may never put on an NBA uniform, having decided long ago they don't want to make the leap across the Atlantic.

Others, however, are in their early 20's -- and at least two of them are teenagers -- meaning NBA teams have the luxury of waiting years for the players to develop, mature and, not insignificantly, learn English, like the Nets did with 7-foot Serbian center Nenad Krstic. He was drafted at age 18 in 2002.

Manu Ginobili represents the best case scenario. An Argentine shooting guard, Ginobili was drafted at No. 57, next to last, by the Spurs in 1999 and waited three years before deciding to play in the US. He got a bigger pay package than most second rounders, but nowhere near his value. Now he is an all-Star with both an NBA ring and an Olympic gold medal. Two other NBA stars also were stashed in Europe: Andrei Kirilenko of the Jazz and Peja Stojakovic of the Kings. Both were drafted as teenagers in the late first round then spent two more years in Europe before arriving in the U.S. and surprising the fans who booed their selection on Draft night.

The worst case scenario is exemplified by another 1999 draft pick, Frederic Weis, the 7'2" Frenchman chosen by the New York Knicks at No. 15 in the first round and then posterized by Vince Carter in the Olympics the next year. Weis' game has deteriorated since then and the chances of the Knicks offering him a three year contract, at a guaranteed $3.1 million, are nil.

So who are the best of the Euro-stashed? Which team has been the smartest in picking for the future? Who could parlay those choices into trade fodder?

Right now, it looks like the San Antonio Spurs have the best of both worlds: quality and quantity. Luis Scola, a 6'9" power forward who was Ginobili's teammate on the Argentinian Olympic team, is the most likely to succeed. He has said he is headed to the NBA after this year with Tau CerĂ¡mica in the Euroleague. And Scola, 24, is only one of four international big men whose rights are held by the Spurs. It's doubtful all four will wind up playing in the SBC Center in San Antonio, but those draft rights could certainly come in handy in a trade.

Along with Scola, the Spurs hold the rights to another 24 year old, 6'10" Lithuanian power forward Robertas Javtokas; and 6'10" Georgian shooting forward Viktor Sanikidze, drafted last year, still only 18. Sanikidze is probably the best prospect under 20 among those international players already drafted. The Spurs also hold the rights to 7'1" center Sergei Karaulov, probably the biggest mystery in the 2004 draft. This is not surprising, considering that he is an Uzbeki who plays professional ball in Siberia!

Of the four picks stashed by the Blazers, only Sergei Monia, a 6'8" shooting guard who plays sparingly for Europe's best team, CKSA, looks like a winner so far.

Right up there with Scola is the 6'4" Vujanic, drafted by the Knicks in 2002 at No. 34 and then traded to the Suns. Vujanic would appear to be a perfect backup to Steve Nash [now backed up by Brazilian Leandrinho Barbosa], a quick, hot-shooting, push-it-up guard who is still only 24.

Others out there who could develop into decent NBA players include: David Anderson, a 7-foot Australian who plays center for Europe's top team, CKSA Moscow, and whose rights are held by the Hawks; Juan Carlos Navarro, a 6'3" Spaniard who plays point guard for F.C. Barcelona, another of Europe's top clubs, and whose rights are held by the Wizards; Monia, a Russian shooting guard who plays with Andersen at CKSA in Moscow; and 6'9" Christian Drejer, a Dane who also plays guard, forward and even center in Barcelona with Navarro and whose rights are held by the New Jersey Nets. [Barcelona, in fact, has more players with NBA draft rights than any other team, with Navarro (Washington), Drejer (New Jersey), Duenas (New Orleans), Van Der Hare (Orlando) and Bodiroga, drafted by the Kings 10 years ago.]

There are, of course, impediments to the draft rights being traded the same way draft choices are traded. In some cases, the rights are viewed as untouchable. The Nets smartly refused to trade the rights to Krstic and now he is viewed at age 21 as a potential All-Star in the pivot. Others, like Bodiroga, simply don't want to leave Europe, where they are international celebrities, for the NBA where they would be good players, but not at the level of a Kobe Bryant or Vince Carter.

Also, there are financial considerations that could lead a player to simply say it's not worth it to move, making his draft rights next to worthless. With basketball becoming more popular in Europe and elsewhere, salaries once considered paltry by NBA standards are now on the rise, making it difficult for a player making $1 million in Europe to take less than $400,000 from an NBA team, the minimum a second rounder makes. Some even get special tax breaks.

There is also the buyout problem. Increasingly, European teams are signing young players to long-term contracts, in some cases having a promising 16-year-old ink a nine-year deal. Krstic is essentially playing for nothing this year, having had to pay his former team, Partizan, $1.1 million to get out of his contract. Monia's contract included a buyout clause, but only if he was drafted in the lottery. He wasn't.

Finally, like any other draft choice, some of these players are simply not good enough for the NBA, and all that time in Europe has proved it.

Drejer in some ways typifies both the promise and problems of taking a European and stashing him. Essentially a 6'9" point forward with great court vision and decent shooting and athletic skills, Drejer would have been a first round choice and probably an NBA player already if he had declared for the draft at age 19. He had torn up the admittedly weak Danish League with SISU, averaging 31 ppg, and played well in international competition against other NBA-bound players. He was compared to a young Tony Kukoc.

Instead, he chose to enter the University of Florida where coach Billy Donovan said he had more potential than any player he had ever coached. Drejer wanted the NCAA experience. The transition didn't work. After suffering from an ankle injury and a rare skin infection in his first year in Gainesville, he was playing well, but not consistently, with the Gators last season.

He was so unhappy that he surprised Donovan and his teammates by deciding to pack it in and join Barcelona before the season ended. The deal he signed was lucrative by European standards. He received a reported $200,000 for the remainder of last season, a reported $800,000 for this season and a $1 million player option for next season. But what he didn't know was that the decision automatically and irrevocably put him in the 2004 draft. When the Nets selected him with the 51st pick, they knew that what they could offer him paled to what he was making in Barcelona and that he would have had a double liability: his contract carried a $500,000 buyout. It was obvious the Nets wanted Drejer to stay in Europe and develop. Initially, there were reports in the Danish press that Drejer wanted to play for the Nets' summer league team in Orlando, but for whatever reason that never happened.

Now, however, Drejer's stock has slipped. Signed by one coach, he is now playing for another, Joan Montes, who has publicly and repeatedly criticized him for a lack of intensity and defense and tried to trade him. El Pais, the Spanish newspaper, described him as "El Enigma Drejer" which needed no real translation.

The Nets' GM, Ed Stefanski, recently met with Drejer on a European scouting trip, but it's uncertain if the Nets were offering encouragement about next season or telling him another year in Europe would help his career development and reputation, scarred not once but twice in the past two years.

Drejer no doubt would prefer playing for the Nets -- Jason Kidd is his favorite NBA player -- and the Nets, famous for taking chances with damaged properties, would love to see him become the player people thought he would become three years ago. Still, is he willing to give up a $1 million option next year if his rights get traded and his new team only offers him the minimum? He has said the NBA is still his dream, but he may never play next to his idol on the Meadowlands court.

In any case, it will interesting to see if the Nets or other teams looking to improve at the deadline start offering the rights to other teams who are willing to take the risk for what could be a great reward.

For a list of draft rights held by NBA teams, including a few college players who never signed, go to:

A few players from this upcoming draft who could be considered candidates to be picked and then stashed overseas: Angelo Gigli, Stefano Mancinelli, Axel Hervelle and Nikolaos Zissis.

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