Now, I’m not a baseball fan in the slightest, but the depiction of the culture shift in the management of Major League Baseball teams was enlightening. The plot itself disclosed an emerging phenomenon in modern sports; a discourse that is visible in every forum board argument and fantasy sports league around the country. In fact, the more recent argument over whether Derek Fisher should return to Lakerland or not is indicative of these two dichotomous paradigms: the use of efficiency statistics vs. the solidified general wisdom of collective perspective.
“It’s hard not to be romantic about baseball,” says GM Billy Beane, in the film. It’s easy to understand the sentimental reasoning: baseball is America’s game. The same logic applies in basketball, although with a different flavor. Basketball, for the fans at least, is a game of heroes. And for the Lakers, Derek Fisher lines the hallways with snapshots of heroic moments. Moments of legend.
—- Kick off the season with your own Lakers Nation t-shirt! —-
While my purpose here isn’t to get in an argument over whether or not Fisher deserves to return to the team, it has indeed been interesting to see that the lines drawn for or against his return parallel the paradigms that I’ve already mentioned: the statistics that point out his efficiency vs. the collective knowledge that Fisher is clutch, dependable, and a valuable asset in terms of leadership.
General managers, from what I can tell, have hard jobs.
ESPN statistics guru Larry Coon recently published an incredibly insightful article on overpaid and underpaid players in the NBA, using a regression diagram to demonstrate what most players should earn based on their respective NBA ranks. While the statistics are by nature subjective (NBA Rank is an assessment that is voted upon by media members, and thus inherently slanted), the graph was very revealing. It seems that a great portion of NBA players are being overpaid, and the best ones are often underpaid.
The questions that came to me were these: How do general managers decide how much to pay a player? What about the Lakers as a team? Could Mitch Kupchak be considered one of the “smart” GMs? As a city with annual championship aspirations, are the Lakers getting the most bang for their buck? How do we compare with other notable “smart” franchises, especially in the Western Conference?
For the Lakers, making wise decisions financially is crucial. Packing a team with superstars can work, but it has its consequences, especially after the implementation of the new CBA. It is important to note the trends that occur throughout the league when making any business decision, whether they be for “heroic” players or not.
What are We Paying For?
These are the questions I sought, and am still seeking, to answer when I started this article. The basic premise can be found in Mr. Coon’s article (unfortunately, it’s an Insider article on ESPN, so you’ll have to subscribe to read it). I’ll leave it for him to explain the basics:
“By computing a player’s actual salary against his expected salary based on his NBA Rank score, you can determine whether he is underpaid or overpaid for what he delivers on the court. Fortunately, most players’ salaries are commensurate with their performance — in other words their points on the graph are fairly close to the trend line.
But there are a few outliers — players whose salaries are nowhere near what you would expect them to be. The farther a dot is above the trend line, the more overpaid the player; and conversely, the farther below the trend line, the more underpaid (but a better bargain for the team).”
If you look at the graph, most players fall in line with the “trend” line, or regression line. The line delineates what a player would be expected to make based on their on-court performance. The better you are viewed as a player, the higher your NBA rank, and concurrently the increase in salary. The graph shown is Mr. Coon’s graph, with some caveats as to the details.
The data point farthest right is, of course, LeBron James. He scored a 9.99 on the NBA Rank scale, and as such, is one of the most underpaid players in the league. At least we know he didn’t move to Miami solely for the money.
In essence, the further a player is under the regression line, the more underpaid he is, and the further above, the more overpaid he is. It is a useful tool in determining a player’s value at a glance without getting too far into a discussion.
For starters, Coon used the player’s current NBA Rank with last year’s salary. His explanation for this was that NBA Rank is typically based off of the player’s performance during the 2010-2011 season, and so last year’s salary should be used.
Coon also used the NBA Rank score this year instead of their NBA Rank number. This allows the data to be more clumped, as opposed to an extended line that reaches over a large range. This is more reflective of real life groupings.
Finally, Coon made note of the “standard Kobe Bryant disclaimer,” stating that although a player’s data point may suggest that he is indeed overpaid, the revenue said player (Kobe Bryant) brings in to the organization from tickets, jersey sales, and television ratings would alter his status as “overpaid.” While the graph is based on purely on-court performance and Kobe could be seen as overpaid, the money he brings in from television and sales suggests that in actuality, he is underpaid. This applies to some other superstar players as well.
What was frustrating to me was that the data points on the graph (for the most part; there were some obvious outliers) did not demonstrate which players on which teams ranked where. While the article demonstrated the top ten most underpaid and overpaid players, it didn’t give explicit details for each team. I’ve attempted to accomplish such in my graphs below.
Some notes as to the differences between my diagrams and those aforementioned.
First, I used this year’s salaries instead of last year’s. While last year’s performance was the foundation for those player’s NBA Rank, that NBA Rank is the current evaluation of these players to start out the year. For example, we cannot speculate as to what Kobe’s NBA Rank will be at the end of this year. But we do know what he should be ranked at now, and the Lakers organization is committed to paying him a certain salary for this year based on what his score is right now, not what it is in the future. Using this year’s salary will provide a better picture what we should expect from that player this year. This change should result in slightly different data points from that of Coon’s graph.
In the graphs below, I’ve highlighted the players from four different teams: the Los Angeles Lakers, the San Antonio Spurs, the Oklahoma City Thunder, and the Denver Nuggets. I’ve selected these four teams because, in my opinion, these are the four main contenders for the Western Conference this year. Secondly, these four teams represent teams that, for the most part, are viewed as “smart franchises” throughout the league. Whether it be bringing in marquee free agents or maintaining consistent excellence in small markets, these four teams represent the cream of the crop.
Next Page: Numbers Game: Breaking Down the League’s Best Teams
Los Angeles Lakers:
This should come as no surprise to anyone: the Los Angeles Lakers bring out the big guns when it comes to free agents. No franchise in the league has a bigger advantage when it comes to attracting the biggest names, and as much as Dwight Howard wants to wait before signing an extension, in the eyes of this writer, it’s only a matter of time.
The common critique is that because the Lakers are capable of having a higher payroll, smart management isn’t as necessary as it would be in other parts of the league. Common logic would suggest this isn’t true. Just because Mitch Kupchak is in L.A. doesn’t mean that he is a Charlotte Bobcat level GM. I doubt Rick Cho would have the same type of success in Los Angeles.
And to that point, having a higher cap level doesn’t mean that the Lakers should mismanage their money. I believe Mitch Kupchak has done an excellent job of getting the most talent for the money that we have, and Luke Walton aside, has done a great job of not making horrible payroll decisions.
From what we can see, the Lakers have done a decent job of following the regression line, and at the very least, the averages would even out. Of the Lakers’ starters, Kobe, Pau and Metta are all above the trend line. One would expect Kobe to be above (his salary this year and next are ridiculous), but seeing Pau and Metta above would be some cause for some concern.
1. Pau is still very very good, and is the Lakers’ second best facilitator.
2. Metta came to camp in shape and has exceeded his NBA Rank expectations.
Now here’s the kicker: the Lakers’ three biggest off-season acquisitions all came for cheap. Dwight, Nash, and Jamison all came in under the trend line, meaning that based on their skill level at the end of last season, what the Lakers are paying them this season is well under what they deserve. In essence, bad for them, good for us.
—- Kick off the season with your own Lakers Nation t-shirt! —-
It is interesting to note that both Steve Blake and Chris Duhon are two players that fall above the expected salary rate. It is easy to see now why they’ve been on the trading block for the past few weeks. Besides the fact that they are less than serviceable backups for Steve Nash, they are also being paid more than they’re worth.
The discussion on whether Derek Fisher should come back to the Lakers is interesting here. Unless Chris Duhon and/or Steve Blake are traded, it makes no sense for the Lakers to bring back Derek Fisher, as they would have to pay out the salary for one of these already overpaid players (not to mention the luxury tax), and then pay again for a player that, statistically, is no better than those already on the roster. Overall, the Lakers have done a good job of evaluating the talent on their team, and due to the fact that the only player guaranteed for the 2013-14 roster will be Steve Nash, the Lakers have given themselves a lot of cap freedom to boot.
San Antonio Spurs:
The Spurs, deservedly, have been viewed in the eyes of many as the ideal franchise for relatively small market teams. They’re smart, they’re safe, and they always find ways to keep their team relevant. Include the fact that they have a reputation for strong “character” guys, they portray the pinnacle of NBA management. The graph below demonstrates the same.
It looks as if the Spurs aren’t into big spending, or at least gratuitous spending. The only two significant players that are over the line are Manu Ginobli and Stephen Jackson, and the only one that could be considered overpaid is Jackson.
The Spurs’ superstar players (Duncan, Parker, and Ginobli) all make under $ 15 million, and the rest of the team all earn under $5 million each. In fact, the cluster of Spurs reserves hover around the 5.0 mark, better than most of the league. Compare that to the Lakers reserves, and you can see why people rave about the “team spirit” of the Spurs organization. Of all of our Moneyball contestants, the Spurs look to be on top. They pay their stars relatively fair salaries, they get significant production from their bench, and take very few salary burdens (Jackson).
Next Page: Denver Nuggets and OKC Thunder
Denver Nuggets:
Oh Melo. When GM Masai Ujiri took the position of general manager in 2010, he had more than a handful of problems to deal with, the most significant being Melo’s free agency turmoil. What could have been a disaster for the Nuggets however, ended up being a victory: not only for Denver but for teams everywhere that have been held hostage by superstar players. Ujiri robbed the Knicks, and gained a plethora of quality less-thans. And coach George Karl couldn’t be happier. Now he could run teams to death with his high speed, high altitude small ball. And it would only get better.
In a trade that seemingly solidified the Lakers’ status on top of the West, the Nuggets managed to bring in the perfect piece to their high energy, defensive system: Andre Iguodala. In what could have been a miserable post break-up tragedy, the Nuggets have managed to find “someone better” to meet their needs.
From what we can see, the Nuggets have the potential to rival the Spurs as one of the most cost efficient teams in the West. JaVale McGee is really the only player that is significantly overpaid, and when you take into account the fact that centers were going at a high price not too long ago, that expenditure seems reasonable. And while JaVale may the be the subject of one too many NBA memes, the fact that he is a seven foot, 252 pound 24 year old with tremendous upside should not be overlooked.
Two of the most popular Nuggets, Ty Lawson and Kenneth Faried, are on board for cheap as well. As a rookie, Faried was a godsend. What player has had more rebounding instinct since Rodman? Some would say Love, but Faried is a rebounding prodigy. The Nuggets love energy players, and Faried is all about the energy. And despite Lawson’s miserable stint overseas, his production cannot be overstated. Put simply, he is the engine that drives the Nuggets’ high speed offense. The Nuggets are certainly getting the most bang for their buck out of these two. Of all the teams, I believe the Nuggets’ have done the best job of paying their players the appropriate salary.
Oklahoma City Thunder:
No one team has been luckier than the Oklahoma City Thunder. To strike gold three times in the draft? Come on. That kind of frequency demands more than luck, and the maestro behind the Thunder’s success has been general manager Sam Presti. But in the past few days, Presti has surprised even the most bold of GM’s. He traded away James Harden.
Just like in Moneyball, running a small franchise requires that you take bigger risks than an owner of a big market franchise would. There is no massive reserve of money to draw back from. Small teams equals big risks. As in, trading away an Olympic medalist-Sixth Man of the Year-Near Franchise Player type of risk. Is this a wise business choice? Or did Presti make one of the biggest mistakes of his professional management career? Observe the following graphs.
This is the Oklahoma City Thunder before the trade:
Let’s first look at the team as a whole. There is no denying that Presti has constructed a high-performance squad for cheap. The only player that could be considered overpaid (and I doubt he is the biggest attraction on the team) is Kendrick Perkins. And as mentioned before, centers come at a higher price these days. That’s why the Lakers trade for Dwight Howard was such a big deal. Dominant centers don’t come very often.
The trick here, however, is that Harden was due for an extension, and he is a max contract player. For a player of his caliber, anything short of a max contract would be considered a snub of desperate proportions. Serge Ibaka received a contract extension only weeks earlier, and one would expect Thunder management to keep the team together for one more title run. It seems that Presti wanted to pull the trigger a little earlier and hope for the best. The one thing these graphs do not show is total salary accrued, which means that although a player may be paid what they are worth, that does not mean that the team isn’t over the cap. So although signing Harden to a max contract extension may not have put him over the trend line, it would have sent the Thunder as a team over the cap. The Thunder couldn’t afford that.
Let’s look at the Thunder post-trade.
It appears as if the Thunder have sacrificed their title chances in the short term for flexibility and possibility in the long term. In terms of talent this year and payroll, Kevin Martin for James Harden makes no sense. In fact, Martin could be considered one of the more overpaid players in the league.
However, Martin’s contract expires after this year. This fact puts the Thunder in a favorable position to renegotiate next year, and remain under the trend line as a whole. And it’s not as if Martin doesn’t meet their needs. He’s a high volume scorer (although not capable of much else), and will provide a bigger offensive punch off the bench than Harden did. And for those keeping score at home, the other players on the Thunder roster who were above the expected salary line were shipped out in this trade as well.
In summary, it seems that the Thunder haven’t given up much in terms of on floor talent, and have still increased their flexibility for years to come. In this CBA atmosphere, banking on one player’s production while paying out of your nose may be a bigger risk than trading him away for suitable replacements. While the general public may view the trade as disastrous to team chemistry and paranoia based, the reality is that Sam Presti can’t control team chemistry. What he can control is how much he is willing to pay to get the results he wants.
Next Page: Conclusion
Sports teams do not exist in a vacuum. There will always be additional factors that come into play: chemistry, location, market attraction, and going rate per position. It’s no surprise that someone would want to live in Miami as opposed to Cleveland. People are beings of values, and not everyone values the same thing. Steve Nash could have been paid more money to play somewhere other than Los Angeles, but being close to his family was his number one priority. Having a great chance at winning the title didn’t hurt either; years of inter-conference rivalry won’t change those desires.
Based on that information, one can clearly say that these graphs only account for those most obvious variables. But that said, they do point out the tendencies in the ways that teams spend money. The Lakers, Spurs, Nuggets and Thunder could all be considered wise spenders, at least in terms of talent on the court. In terms of cap expenditures, the Lakers are clearly paying more than the rest. Such is the cost for bringing in high-end talent. But it’s not as if the Lakers are paying that kind of money for Rashard Lewis or Gilbert Arenas. It’s Kobe-freakin-Bryant.
The trend is that advanced metrics are being used to evaluate players, and while NBA Rank is far from being classified as an advanced metric (it’s media opinion for crying out loud), the idea of determining whether a player is earning their paycheck is something general managers will always have to keep in mind. It’s about time for league-wide evaluation to expand beyond reputation and legendary status. General managers, in this climate, can’t afford to do anything else.
Notes:
Larry Coon has published another article regarding salary-talent evaluation, this time marking the difference between NBA teams. His study includes the 5 most underpaid and 5 most overpaid teams in the league, using his format described above. Check it out. (Once again, you have to be an ESPN Insider to read it. Sorry if that’s inconvenient.)
_______________________________________________________________________________________
Exclusive Practice Video: Metta World Peace talks about new piece of the offense…leaves Steve Nash confused
_______________________________________________________________________________________