Okay, let's see if I can explain this. The NET has five components, ranked from highest weight to lowest:
1.Team Value Index, which is based on Game Results (i.e. wins or losses) factoring in the opponent, location and winner.
2. Net efficiency, which is just offensive efficiency minus defensive efficiency. I will guess that very strong defensive teams will benefit here.
3. Winning Percentage (this one is straight forward)
4. Adjusted Winning Percentage (a bit confusing, but somewhat easy to understand)
5. Scoring Margin (capped at 10 points).
The first red flag to me is that NET considers opponent, location and result to get its Team Value Index. But how do I rank teams in the first step? KU plays Tennessee on Friday at a neutral site. KU wins. So I know how to do the location and result. But what value do I give Tennessee? The NCAA says this is designed to give credit to teams that "beat other good teams." Tennessee is ranked 27th by NET. So does KU get credit for beating the 27th best team, or the 5th best team (according to AP) or something in between? And remember, this factor gets the MOST weight! Yet I can't figure out how they are even evaluating teams at the start of all of this. Moving on.
NET efficiency makes sense. It's something like the KenPom rankings. It will take some time to balance out, although it should be noted that right now KenPom's top ten is Duke, Kansas, Virginia, North Carolina, Gonzaga, Nevada, Michigan, Michigan State, Auburn and Tennessee. By the eye test, there are some misses (Duke ranked first, mostly on the strength of blowing out everyone, then losing a close game to Gonzaga), but I have no doubt that every one of the teams I just listed is a very good team, potentially Final Four quality. Its fairly easy to reverse engineer this part because the numbers are out there.
Winning percentage is easy. No issues here.
The adjusted winning percentage is a bit of an adventure. You get 1.4 "wins" for a road win, 1.0 "wins" for a neutral site win and 0.6 "wins" for a home win. For losses, the reverse is true. 0.6 for a road loss, 1.0 for a neutral loss and 1.4 for a home loss. This seems counter intuitive, as teams are punished for losing at home to very good teams. That makes very little sense.
Capping the scoring margin makes sense, but the cap is too low. There's a big difference between losing by 10 and actually getting blown out. Getting blown out isn't really reflected in this metric, which makes the margin useless.
The biggest flaw with NET is that it counts wins and losses at least twice, possibly three times. It counts it once in the winning percentage (WP) , then counts it again in adjusted winning percentage (AWP). It also counts it at the top in the Team Value Index (TVI). The AWP and WP do not account for opponent. It is entirely based on result (win or loss). TVI accounts for the opponent, but isn't clear on how that opponent is assigned a value.
The AWP will really skew once conference play starts. Imagine being a team like Texas Tech, knowing you have KU, K-State and WVU all coming to Lubbock. If you lose all three of those games, AWP counts that as 4.2 losses against you. If you win all three of those games, it counts as 1.8 wins. That seems... absurd. Those are three tough games. It rewards you for playing road games, but because it doesn't factor in opponent when doing AWP, scheduling weaker opponents on the road (you won't be punished for the loss as much) will actually help your AWP! That makes no sense.
It will be interesting to see how these rankings even out as more data is input, but I am not optimistic.