In 1978, Daly joined the NBA's Philadelphia 76ers as an assistant coach. During the 1981 season, the Cleveland Cavaliers hired him as the third head coach that season, but he was fired with a 9–32 record before the season ended. He then returned to the 76ers as a broadcaster until he was hired in 1983 by the Detroit Pistons. The Pistons, a club that had never recorded back-to-back winning seasons before Daly's tenure, made the NBA playoffs each year he was head coach (1983–1992), as well as reaching the NBA finals three times, winning two consecutive NBA championships in 1989 and 1990. While serving as the Pistons coach, Daly was also a color commentator for TBS's NBA Playoff coverage.