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A relevant article on the draft approach

5/23/2012

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The main reason I am back writing about the NBA with any regularity is to examine the NBA draft, past and present.  Over time I have become more and more convinced that drafting well is the only way to build a championship-level roster – unless you get lucky (like Miami did in free agency two years ago.) 

If you draft well you can develop your own stars (like OKC has done) or trade your cheap, good drafted assets for stars (like the Celtics did in 2007.)  I wrote this piece before the draft in 2010.  If some of these ideas were more thoroughly applied by teams, particularly bad teams, the fortunes of several franchises would rise.


I’m some kind of neocon when it comes to the NBA.  When you look at the big picture it becomes apparent that a team’s supporting cast is much less important than its best two or three players – much less.  I’ve written pretty extensively on this, and there are many smart basketball minds that totally disagree with me.  Nonetheless, this is how I look at the league.  Paying mid-level exception money or more for bench players is a mild form of insanity that often overtakes NBA executives.  On a deep level there is not much of an overall difference in value between the fifth best player on a NBA team and the twelfth best.  Paying bench players big money therefore becomes a great way of sabotaging your chances at a championship.  And I have a suggestion to help executives avoid falling into this trap.  It revolves around the unglamorous portion of the draft.

The latter part of a NBA draft can be a godsend for a team.  Most NBA front offices view it rather ambivalently.  Few people realize the scope of its possibilities.  Simply put, the easiest way to cut corners and save money in the NBA is to draft and sign players who are on their rookie contracts.  Relative to veteran players, first rounders taken after the lottery are cheap.  Second rounders and undrafted free agents are ridiculously cheap.  But we don’t hear about this salary disparity much.  It’s not exciting to talk about how James Posey got paid twelve times more than Marcus Thorton last year, and five times more than Darren Collison.  Or how DeJuan Blair was a fourth the cost of Matt Bonner.  Or how Jason Maxiell was ten times more costly than Jonas Jerebko, and Roddy Beaubois cost nine times less than Jason Terry…this info might not seem exciting, but it is.

We need to accept that late first rounders, second rounders and even undrafted free agents can turn into very solid NBA players – often right out of the gate.  Here are just some of the productive rookies that were not taken in the top twenty last year: Collison, Omri Casspi, Beaubois, Taj Gibson, Toney Douglas, Dante Cunningham, Blair, Jerebko, Thorton, Chase Budinger, A.J. Price, Wes Matthews and Reggie Williams. All these guys have one thing in common: they came cheap, and they were fine NBA players in their rookie year.  They played better than many of their veteran teammates, for a fraction of the price.  Nonetheless their tremendous relative value was only faintly appreciated, which is the regular plight of the late draftee.

Several problems come with being a late pick or going undrafted. Often it has little to do with talent, and much to do with perception. Because the NBA has long regarded the second round as an afterthought it is easy for that negative stereotype to hold, even when we have seen dozens of successful pros picked from there in recent years.  The negative attitude lingers because many league personnel believe that there are only a certain amount of players in the world that are NBA-caliber, and most of those players must already be in the league. At best this belief is antiquated, and at worst it’s plain naive.

In the old days, before the international boom, perhaps there was a limited amount of basketball players in the world that were NBA-worthy.  It simply doesn’t hold true in 2010.  Now we have a tremendous excess of league-caliber players.  I can’t put an exact number on it, but there are many more players with NBA talent than the 450 the NBA can provide with roster spots.  Potentially another 450 players have NBA merit but for various reasons have never been able to fit into the league.  This doesn’t mean there are superstars hiding under rocks in Europe. The NBA still appears to have a monopoly on the world’s stars.  But role players are another story.  Annually there are scores of Americans that given proper conditions could have made millions in the NBA.  Instead they play across the pond or in the D-League.  Did they lack the skill needed to compete at the highest level in the world, or were they just unlucky in the situation they found themselves in?  Many times, the case is the latter.  The story is the same for a multitude of their European counterparts.

Granted, the NBA still has plenty of bad players.  And obviously many second round picks are drafted each year that really don’t belong in the league.  Yet these bad, unworthy-of-the-league players shouldn’t make us think that the NBA only has a finite amount of talent to draw from.  We shouldn’t be so easily fooled.  The biggest problem for players drafted late (or undrafted) is that they never get a legitimate chance to show how good they can be.   Coaches don’t expect late draft picks to actually become productive pros.  And if a head coach or general manager doesn’t have high hopes for you it doesn’t take much to be out of the league before you’re even in it.  Players need to be judged upon consistent floor time in NBA games.  Many late picks never get playing time – even during the exhibition season.

I’m not saying it’s always easy for head coaches to provide ample playing time to unproven rooks. What I’m saying is that it is smart if they do.   Dismissing prospects without ever giving them a fair shake has been standard league policy for as long as we can remember.  And it costs teams cheap assets.  Today it’s easier to draft a good player than ever before.  There is a bevy of accurate statistical analysis that can be done, and there is tons of on-the-ground scouting available.  And because there is an overabundance of talent in a draft, you just have to sift through and find what could likely work for your team.  Often what you find can help you almost immediately, especially when it is a deep draft like this year.  Mark my words: there will be potentially significant NBA players available after pick 60 on Thursday.  Unfortunately we might never get to see these players given meaningful NBA minutes (for the record some possible undrafted sleepers I like in this draft are Omar Samhan, Jeremy Lin, Sylven Landesberg, Dexter Pittman, Landry Fields, Luke Harangody, and Devan Downey.)

Finally I want to relay to you the really good part about late picks – as productive as they can be in their rookie season, they become exponentially more valuable as they mature as players.  Hedging our bets through statistics and scouting, why shouldn’t a savvy executive draft/sign four of these guys every year or two?  Sign each player to four or five year contracts with a team option (only costing probably a few million for each player) and then see how it plays out. If only one of your chosen four turns into a good NBA player it’s still a nice move; and if you’ve been doing your homework two or three of the four should turn out decent – all for the price of signing one adequate veteran player.  If one of the rooks you sign turns out to be a bust, simply cut or trade
him – it’s probably going to cost you less than a million dollars annually if your player doesn’t work out.  It makes much more sense to sign these rooks to long term deals, because then you have locked them in, and won’t have to give them the large raises they might command once other teams find out what you already know: that your under-the-radar rookies are actually good.  Utah right now is kicking themselves for only signing Wes Matthews to a one year deal.  San Antonio meanwhile has DeJuan Blair under contract for
three more seasons  – that’s smart decision making.

Make no mistake…what I’m suggesting here is a game-changer.  If all of a sudden a good portion of your roster is making a pittance you will have much more money to spend on the players who you should be paying –the very, very good ones.  I was recently joking with a friend that my ideal team would be three great players making $15 million plus a year and everybody else making less than a million.  It wasn’t much of a joke – I have every reason to believe a team like that would win a championship.
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The disparity in players' values

5/21/2012

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As a followup to my last post, take a look at Hollinger’s Estimated Wins Added Stat from this year.  Look at the disparity in those numbers.  According to this stat the best player in the NBA is worth double the value of the 12th best player, and more than three times the value of the 50th best player.  EWA is far from a perfect stat, but it is a great indication of the disparity between great players, superb players, and just very good players.

Now look at the 151st best player according to this stat versus the 301st best player.  A relatively minor three "wins" separates those 150 players.  The vast majority of the leagues' players have replaceable values - their output is largely predicated by how they are utilized (the system, coaching, chemistry, minutes alloted, etc.)  These "replaceable" players have a significant role in your team's success (just compare San Antonio right now with Miami) but on a deeper level are essentially just part of the trickle down effect brought from your top few players.  You don't become a fantastic team with a bevy of good but unspectacular players.  You become fantastic by having a couple of great ones.
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A relevant old article on understanding a player's value

5/17/2012

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I wrote the article below in the beginning of 2010 – before LeBron disappeared in the playoffs against the Celtics and later escaped to Miami with Bosh and Wade.  I wrote it when teams were hording cap room all in a failed attempt to land LeBron or one of the other big stars who were set to hit the open market in the Summer of 2010. Obviously this piece was also written before the lockout – a lockout which hypothetically could have changed the league, but in reality seems to have done very little to change anything.  

All this background aside, the important ideas in this piece remain exactly the same – that it is vital to assign a monetary value to every player in the league, particularly players that are paid high salaries.  This article underscores several of the key concepts that are essential to good roster management.
  
 

When I use the words “salary management” I mean to say this– in general, NBA teams don’t give specific values to their players.  Having large amounts of cap room – as the Heat, Nets, Knicks etc. are planning to have this summer – should always be a good thing.  But we know frequently it is not.  That is because executives are usually wishy-washy when it comes to the specific monetary value of a player. This is why teams with cap room blow it recklessly – they don’t correctly measure what one player’s worth is compared to another.  It is vital to assign each player a specific value before offering them a contract. If you don’t do this you are too likely to rationalize yourself into overpaying somebody.   The degrees of waste might differ, but the results are all negative.  With a potential hard cap looming (and abolition of max salaries?) that could hold even more truth.

In today’smarket, maybe more than in the past, a player should have to be very, very good to make big money.  You need to be at least a near All-Star to deservingly make more than $10 million a year. You need to do this for each year you get paid your high sum.  And if you don’t you will be grossly overpaid.  To generalize what I’m saying: you should have a PER over 18 to even be considered worthy of $10 million annually.  That is a preliminary cutoff; the only exceptions would perhaps be if you were an all-world defender (examples of this are very few, if any.)

Why do executives need to be so stingy with their money?  Because only the great players are worth paying.  And only the megastars are worth anything approaching max salaries.  For instance, let’s look at Kevin Pelton’s WARP statistic from last year.  LeBron James was worth 27 more wins than a replacement player.  Dirk Nowitzki, an indisputable All-Star, was worth 11 wins more.  And Joe Johnson, another All-Star, was worth 8 wins more.  Why is that relevant?  All those players will potentially be free agents this summer.  The reports are they will all get max or near max money.  There is a chance Johnson will actually make more than James next year, because he has been in the league longer. Who would you like to be giving your money to?

Some people will have trouble with Pelton’s statistic, just as some people will have trouble with John Hollinger’s PER or Estimated Wins Added(EWA) stats.  But I have trouble with most of these people – it is hard to find a simple single stat which nails a player’s worth as accurately as these three usually do.  No, it’s not perfect, but it is perfect in what it implies.

And what it implies is that the league’s salary structure is a mess.  No shock there.  But we need to look deeper – and here is where most people do not tread.  This is Hollinger’s Estimated Wins Added leaders as of February
3rd:

1. James     19.8

2. Wade       14.9

3. Durant     14.4

 4. Bosh          13.1

5. Bryant       12.3

6. Duncan     11.5

7. Paul           11.3

8. Howard     10.7

9. Nowitzki    10.4

10. Nash        10.3

----------------------

20. J. Smith   7.9

30. Landry    6.6

50. Ginobili    4.9

75. Dalembert  3.9

125. Gooden     2.1

175. Amundson   1.2

250. D. Jordan   0.1

This list shows us what most NBA fans intrinsically understand: that the brunt of a team’s wins, and how good they are, depends largely on its two or three best players.  All the other players are virtually interchangeable because their values are so similar.  There is only one LeBron James, but there are fifty Louis Amundsons.  It would make sense if the NBA’s salary structure followed this paradigm.  But, of course,it doesn’t.

65 players in the league are due to earn at least ten million dollars this year; every squad has at least one except for Oklahoma City and Portland.  Of these 65 perhaps half are worth what they are paid – and that might be generous. For laughs and quick insight here is a partial list of terrible contracts that are at least eight figures:

-Tyson Chandler       $11.9 million

 -Shaquille O’Neal    $20 million

 -Zydrunas Ilgauskas  $11.5 million

 -Kenyon Martin       $15.4 million

 -Tracy McGrady        $23.2 million

 -Jermaine O’Neal     $23 million

 -Michael Redd          $17 million

 -Bobby Simmons      $10.6 million

 -Peja Stojakovic         $14.2 million

-Larry Hughes          $13.7 million

 -Eddy Curry            $10.5 million
 
-Rashard Lewis        $18.9 million
 
-Samuel Dalembert   $11.4 million

 -Richard Jefferson    $14.2 million

 -Andrei Kirilenko     $16.5 million

Some of these contracts seemed (relatively) reasonable at the time they were signed(McGrady and Jermaine O’Neal), some were silly rationalizations (Shaq), and many were just plain stupid.  The aforementioned are obviously overpaid this season – but there are plenty of other big-moneyed players we could argue do not produce up to the high standards such a salary should require.

What is often misunderstood by even good GMs is that a very solid player is not that much more valuable than a simply mediocre one.  Take for example Joe Dumars.  Ben Gordon and Charlie Villanueva are both nice players.  They are useful and productive – Gordon can be an absolutely devastating scorer, and Villanueva is extremely skilled offensively for a big man. Dumars was “happy to add both these young guys,” giving them five year deals, Gordon’s totaling approximately $55 million and Villanueva’s $35 million.

Even to sharp minds these deals made sense logically.  Unable to pull in a star free agent, Dumars quickly went out and got the best of what was left at salaries that were similar to several players of that caliber.  But what Dumars didn’t consider is what else was out there for much less than $90 million.  Ramon Sessions is a different player from Gordon (and was a restricted free agent), but only ended up costing the Timberwolves $16 million dollars over
four years.  Another restricted free agent, Nate Robinson, signed a one year deal for $4 million.  Both Sessions andRobinson had a higher PER than Gordon last year.  Or if Dumars wantedto stay away from restricted free agents and was looking for a comparable player he could have easily turned to Earl Boykins.  Boykins might not be on Gordon’s level – but he is less than a tenth of his cost, and would be only on the hook for a year.
 
You may think Sessions, Robinson and Boykins are not as good as Gordon.   But Gentle Ben is much more similar to those players than Steve Nash, Chauncey Billups or Manu Ginobili.  And Gordon is paid like those All-Stars.  It could be overly simplistic to think this way – but I doubt it. The truth hurts – Gordon is a very good basketball player, but closer to a solid role player than an All-Star.  His contract resembles the latter.

Villanueva’s situation is more of the same.  Brandon Bass signed a four year, $18 million deal, Hakim Warrick a one year contract for $3 million, and Channing Frye a meager two year deal worth less than $4 million total. Can we honestly say Villanueva is all that much better than any of those three?  Dumars made a mistake that would be fatal if it weren’tall too common: he made a large long term commitment when nothing of the sort was necessary.

It’s pretty easy to see Dumars’ logic: if Detroit didn’t pay these guys someone else well might have, there was no big-shot star to throw all your cash at, and the Pistons got two of the better players on the open market. But rationalizations like these don’t make bad signings justifiable.  Dumars would have been much better served to make a trade to fill up his cap room (being so far under the cap he could potentially have poached a star or draft picks from a team wanting to cut salary) or he should have signed cheaper alternatives such as those just mentioned. In the NBA flexibility is a godsend, and the Pistons frittered it away.

They have plenty of company.   Dumars is widely considered one of the better executives in the league, and his silly big signings were just business as usual in NBA circles.  R.C. Buford, who is held in the highest esteem by many of his peers, traded for Richard Jefferson last summer and was widely hailed for making such a move.  No one is praising himfor it now.

When executives make such foolish moves regularly it is natural to come to the conclusion that something is seriously wrong with how talent is valued.  We are all so used to miserable contracts being coveted, with the standard explanation of adding a“valuable piece.”  Bullocks.  True valuable pieces are rare, so let’s stop making things up.  That ship has sailed, especially with a new salary order right on the horizon. The future is now, whether executives
acknowledge it or not. 
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The Pareto principle and disproportionate values

5/16/2012

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The 80-20 rule and other disproportionate percentage ideas like it are worth thinking about.  I mean this generally and in a non-rigid way.  The actual percentages aren't really important, more pertinent is the idea that to comprehend the NBA we need to understand that some things are vastly more important than other things. 

Here are some examples of what I am saying and believe in.  Again, don't get caught up in the exact numbers, but notice the disproportionate values in all these examples.  80-20 helps you see the entire forest as opposed to just certain trees. 

Traditional Pareto principle:

- 80% of a team's success comes from 20% of its players.

- 80% of a team's budget should be alloted to 20% of its players.

Some subjects I think about in terms of disproportionate value:

- 80% of a team's talent can be judged by statistics,  20% cannot.

- 80% of a win comes from effort and skill, 20% comes from luck.

- 80% of the players in the NBA are interchangeable, 20% are not.

- 80% of a team's success comes from pure talent, 20% from chemistry and coaching.

- 80% of teams in the league cannot seriously compete for the championship, 20% can.

- 80% of a player's production is not dependent on the situation, 20% depends on the timing and setting.

- 80% of the time stats accurately categorize a player, 20% of the time they do not.

These are just a few examples - there are countless others.  The lesson, in short: don't sweat the small stuff.  Some things are much more important than other things - prioritize.  80-20 thinking helps us do that.  Focus on the most important things; always be aware of the big picture and don't stress out over small things.  We can't be perfect, so don't try.
 
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The cream rises to the top

5/14/2012

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The best teams are almost always those with the most star power.  If you have two or three guys on your roster who are exceptional, you have a great chance of advancing far in the playoffs.  If you only have one player who is very good, things are much tougher - no matter how "deep" a roster you have. 

Interestingly Dallas won it all last year with only one fantastic player, completely defying the last paragraph.  It was a hell of a thing.  Just don't expect it to happen again anytime soon.

Last year's abberation mainly happened because Nowitzki was the best player in the world during the playoffs, LeBron choked terribly in the Finals, and Miami's chemistry floundered.  This is taking nothing away from Dallas - they deserved to win and it was incredibly fulfilling watching them do so - but last year's Finals was really more about Miami's stunning failures as opposed to Dallas' fantastic team play.

This year will not be like last year - unless the Celtics somehow conjure up some insane Ubuntu magic, which seems very unlikely.  This year will be back to normal.

We have an unusually large amount of top-loaded rosters this year.  Miami, OKC, San Antonio, the Lakers, and the Clippers are all very star-heavy.  Not coincidentally they are the favorites (probably in the order I just wrote.)

Here, according to
baskeball-reference.com, are the star players on each remaining playoff team with PERs above 20 during the regular season.  It's a very top-heavy year. 

Miami: James 30.7, Wade 26.3

OKC: Durant 26.2, Westbrook 22.9, Harden 21.1

SAS: Ginobili 24.1, Duncan 22.5 , Parker 22.0 (Splitter & Mills also have high PERs in limited minutes, but we can't consider them important enough to put in this select company.)

Lakers: Bynum 22.9, Bryant 21.9, Gasol 20.5

Clippers: Paul 27.0, Griffin 23.4

Boston: Garnett 20.4

Philly: Lou Williams 20.2

Indy: no players above 20 PER

There are some very high numbers there.  No offense to last year's Dallas team, but I doubt they would have made it through the West this year. 

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