What Is the NBA's Ted Stepien Rule?

James Worthy of the Los Angeles Lakers
Future hall-of-famer "Big Game" James Worthy is just one of the notable players selected with draft picks Ted Stepien traded away. Rick Stewart/Getty Images Sport/Getty Images

The National Basketball Association prohibits teams from trading first-round draft picks in successive seasons. The rule was put in place in response to Ted Stepien's disastrous run as owner and de facto general manager of the Cleveland Cavaliers.

During Stepien's reign, the Cavaliers made a practice of trading future draft picks for marginal veteran players. His most notable deal sent a 1982 first-round pick to the Los Angeles Lakers in exchange for Dan Ford and the 22nd overall pick in 1980. That 1982 pick wound up being the first overall selection, which the Lakers used to select future hall-of-fame star James Worthy.

Notable Players Drafted With Picks Stepien Traded

Some other notable players were selected with picks the Cleveland owner traded away including:

  • Sam Perkins (1984, 4th overall)
  • Derek Harper (1983, 11th overall)
  • Roy Tarpley (1986, 7th overall)
  • Detlef Schrempf (1985, 8th overall)
  • Dennis Rodman (1986, 27th overall)

Stepien sold the team to after the 1983 season. As part of the deal, the NBA gave the Cavaliers bonus first-round draft picks in 1983 through 1986. The league also prohibited the trade of first-round picks in successive seasons, which came to be known as the Ted Stepien Rule.

For example, the Ted Stepien rule prohibited the New York Knicks from trading their 2011 first-round draft pick because their 2012 pick was traded to the Houston Rockets as part of the Tracy McGrady deal.

How Ted Stepien Ended Up Owning the Cavs

Stepien, who died in 2007 at the age of 82, made his fortune in advertising. He started his own business,  Nationwide Advertising Service Inc., in 1947. By the time he bought his first shares in the Cavaliers in 1980, Nationwide was making $80 million a year.

Stepien paid $2 million for 200,000 shares and a 37 percent of the Cavaliers. Throughout that first year, he continued acquiring shares until he controlled 82 percent of the team. Stepien later threatened to move the team to Toronto, but George and Gordon Gund bought the team from him in 1983 for $20 million. 

In the three years that Stepien owned the Cavaliers, the team lost $15 million. The team had a three-year record of 66 wins and 180 losses, had the lowest attendance in the league, and went through six head coaches. During the dismal 1981-82 season when the Cavs went through four of those coaches, they won just 15 games.

After leaving the NBA, Stepien did not give up on basketball. He founded the Toronto Tornados of the Continental Basketball Association and later owned a team in the Global Basketball Association. He didn't avoid controversy post-NBA either. The CBA fined him $50,000 for not cooperating with an investigation of salary cap violations.

Just four years before his death, Stepien founded the United Pro Basketball League, a regional minor league of four teams in Kentucky and Ohio that folded after 10 years in 2013.