Tuesday, November 19, 2013

Plenty of Space Under the Thinking Cap

Plenty of good seats available in Phoenix

You can always tell what a prospective class of rookies and free agents is going to be like in the NBA by the number of teams which are deliberately tanking the season before. Judging by this year, it must be a bumper crop. I would point the finger at three teams – the Philadelphia 76ers, Boston Celtics, and Phoenix Suns – who flat-out wrote off this season before it even began, and have chosen to engage the time-honoured NBA tradition of getting rid of every asset on the roster in the hopes of striking it rich in the 2014 offseason. I could also point the finger at the Utah Jazz as well, a once proud and savvy club who’ve disintegrated over time and now have the worst record in the NBA. I’m not sure what to make of Sacramento, Milwaukee, or the Washington Buzzards. The LOSE suspects they stink simply due to incompetence, which is another time-honoured NBA tradition.

There are more truly bad franchises in the NBA than in any other sport. The NHL has quite a few bad ideas for franchises, primary among them being the comical Phoenix Coyotes, but even some of the bad idea clubs are at least well-run given their seemingly hopeless positions. NBA clubs, meanwhile, are simply run in some of the stupidest ways imaginable. The main reason teams are terrible is due to their own incompetence. With a small number of players comes small room for error. Talent assessment is everything in the NBA, both in terms of drafting players and managing that talent when it comes time for reupping it, or not, to new contracts. And the latter issue seems to dominate the bulk of the business in the NBA. Our favourite players may be wearing numbers like 6 and 23 and 35 on their jerseys, but to the GM of an NBA franchise, those numbers may as well be $5 million and $10 million and $15 million, as the bulk of the league brass seems entirely fixated on the voodoo economics which surround the salary cap.

The NBA salary cap is the greatest example in sports of wanting to have your cake and eat it, too. It was put in place in the 1980s, at a time that the league was awash in red ink, in the efforts of controlling costs, since limiting the expenditure on player salaries to a certain percentage of gross revenues would, theoretically, prevent franchises from going broke. The players went along with it at the time, and continue to do so, and there is a very good reason for that – since the salary cap is tied to the players receiving a certain percentage of the gross, any growth is the league is fundamentally growth in their bi-weekly paycheques. Indeed, the average salary in the league has grown from $330,000 in 1984 to $5.2 million in 2008, as the league soared in popularity. This has been the base model for similar systems put in place in the NHL and NFL as well, which have ultimately seen similar growths in player salaries over time.

But the spinmeisters in the league offices have also tried to sell the salary cap as a way to foster competitive balance, which is complete rubbish and always has been. The argument goes that, were a cap not in place, the larger clubs with more access to revenues would just spend endlessly to acquire the top talent at the expense of smaller clubs, to which I say “so what?” The LOSE is a curious hybrid of economic philosophies when it comes to sports, in that I’m both simultaneously a Marxist in my belief that the players should get pretty much all the money – I don’t go to a game to watch an owner – and a free market capitalist in favour of letting the marketplace sort itself out. And with a salary cap comes minimal amounts which have to be spent and which apply to every team – but not every team generates the same revenue. It works out to a certain percentage across the board, but that still leaves some franchises with inherent economic advantages – the percentage cost of the salary cap for the Lakers is far less of a burden a small-market club like the Sacramento Kings. This is what leads to the predatory, extortive practices of clubs to demand municipalities pony up taxpayer money to finance new arenas, which has nothing to do with the ability to compete and everything to do with the ability to maximize profit margins.

It also leads to some ridiculous revenue sharing ideas with the league, like the so-called “luxury tax” which penalizes teams for going far over the salary cap in their spending. The absurdity of such rules is best illustrated by this year’s Brooklyn Nets, who have a wage bill totaling $100 million. The threshold for taxation is $71.75 million, and the tax is steep – in the Nets case, it’s $3.25 for every dollar they go over the threshold – which means they are on the hook for an additional $86 million in taxes. But again, so what? The Brooklyn Nets are owned by a bazillionaire and play in a hip new building smack in the middle of the nouveau riche capital of the free world. They can afford it. It’s a hypercompetitive, ego-driven business. If you want to win a championship, and you are making bank, what’s a few million extra on the top? (Of course, the former New Jersey Swamp Dragons are in last place at the moment. Having a larger chequebook hasn’t apparently made them any more competent when it comes to assembling a team.)

But in an effort to do more than just pay lip service to the idea that the salary cap fosters competitive balance, the NBA has created all sorts of exemptions over the years, beginning with the so-called Larry Bird exemption of the 1980s, which states that a team can go over the salary cap as much as necessary to resign their own free agents. And every time you create an exemption, of course, you also create a loophole which then has to be addressed down the line with another clause or another exemption, because the skillful NBA GM will invariably look to find all sorts of ways to game the system. The endless tweaking and rerigging of the salary cap system over 30 years has resulted in something more gerrymandered than a Texas congressional district. You need advance degrees in economics and accounting, and preferrably some work experience at Arthur Andersen, to figure out how the whole thing works. And having such a system in place also creates one of the most ideal of ready-made excuses to address your franchise’s own foibles. You can blame poor performance as being due to “salary cap constraints,” which prevent you from acquiring new talent – never mind that such constraints come from the fact that you’ve signed so many players to bad contracts in the first place.

Conversely, the argument is often made that a midseason trade is done to “free up cap space.” Acquiring top talent in the NBA is an expensive business, after all, with the top players making in excess of $20 million a year. And since basketball is such a small game, with only five players on the court at one time, the acquisition of one great player can make a huge difference. Since acquiring that top talent will eat up huge portions of your available wage bill under the salary cap, the best way to prepare for it is to clear out large amounts of space ahead of time. This has led to the lure of the expiring contract. The most sought-after players at the trade deadline every year are not guys who could actually help your team win a championship. No, in fact, usually they’re old guys with bad knees who can’t play anymore and are in the last year of whatever bad contract they signed years ago. If my team sucks, and I have three guys making $5 million, and you have a guy making $15 million in the last year of his deal, I’ll trade my three guys worth $15 million for your one worth $15 million and let the old guy with bad knees sit on the bench for the rest of the year. Then he’s gone and I’ve got $15 million a year to spend on a superstar come time for free agency, and then I’ll just sign a couple of rookies at the league minimum to sit on the bench and make up for the three players I had to trade. Sounds perfect! Everyone wins, right?

But why wait until the middle of the season, when it’s apparent that your team sucks, to throw in the towel? Why not just admit your team sucks from the very beginning? Throw in the towel, throw up your hands, suck for a year and hope it will get better next year. And if you’re a fringe team, on the cusp of making the playoffs perhaps but really not very good, is it worth it to qualify as the #8 seed and get blown out by the Miami Heat in the 1st round of the playoffs, or are you better off if you trade a bunch of dead weight you don’t want for some other dead weight you don’t want, and get rid of it at the end of the season so that you can sign someone better? And if you don’t make the playoffs, you’re in the lottery – the ‘random’ draw which establishing the order for the draft – where you might get lucky and get the #1 pick. Then your team will get a whole lot better in a hurry, right? And do so somewhat cheaply, at first, since rookies make far less than stiff vets with bad knees who sit on the bench and take up salary cap space.

Welcome to the idiocy of the NBA, where seemingly every decision most of the teams seem to make involve next year. Or the year beyond, for that matter – teams like the Knicks were making moves designed to clear out cap space two years in advance in the hope that the free agent ferries would come and sprinkle magic LeBron James dust on them somehow. And it’s all a gamble, of course, one which often doesn’t come true – seen any LeBron Knicks jerseys lately?

The draft is always somewhat of a crapshoot to begin with – for every Tim Duncan or LeBron or transcendent talent available with the top pick in the draft, there are far more Joe Smiths and Kwame Browns and Michael Olowokandis out there. And even seemingly sure things turn into draft busts sometimes. It doesn’t keep a bunch of teams from giving up entirely and hoping to hit the lottery every year – which, of course, runs antithetical to the original intent of the lottery in the first place, as it was designed in the 1980s to keep perennially woful and incompetent franchises like the Clippers and Cleveland Cavaliers from deliberately trying to get the worst record in the league so as to get the #1 pick. By including every non-playoff team in the lottery, all the league did was give more franchises incentive to try and suck.

Notice how I’ve said nothing about the actual game of basketball in this post? That’s because it doesn’t matter very much. It seems like the only thing many NBA GMs do is trade a bunch of guys they don’t want for other guys they don’t want. Making the argument that you’re trying to “clear cap space” is laughable to begin with – just because you have money to spend doesn’t mean anyone wants to buy. I’ve mentioned this phenomenon of Edmonton Disease in a previous post: if everyone clears out massive amounts of cap space so as to offer players big contracts, the actual amount clubs can offer in such a controlled system is basically about equal, which means that other factors will come into play, such as quality of life, or if the team is perceived to be a viable championship contender. The LOSE couldn’t help but giggle at a few naïve op-eds in the Sacramento Bee during the whole Kings mess which spoke of how new ownership and a new arena would have the finances to bring in some high-priced free agents to the Kings. Sorry, Sac, no player of any worth is EVER signing with that sorry organization. Ever. Why would you play in Sacramento when you could play in Chicago or L.A. or New York? Why would you sign with a perpetual vagabond fanchise that hasn't won a championship since three or four cities ago?

The 76ers this year have set themselves up for failure. They’re not only below the salary cap, having rid themselves of every big contract they had in the offseason, they’re actually under the salary floor. They’ve not even spent the minimum required by the league. Their roster of flawed and inexperienced players got off to an inspired 3-0 start – these guys are playing hard, of course, since a lot of them might not have jobs in a year – but are slowly sinking back to earth. They’re hoping to land one of the top picks in the draft, and also be able to spend big in free agency in the offseason, which is a nice idea, but here’s the thing: most teams get to be that bad in the first place because they are run badly. You may give up and decide to be terrible, but usually only after it's all gotten bad to begin with. Another prime tanker this year, the Phoenix Suns, are owned by Robert Sarver, regarded by many to be the worst owner in the league. (And anytime you can trump Donald Sterling on that front, it’s saying something.) Sarver has run the franchise into the ground since he bought it, so why would anyone expect Sarver to suddenly know what he’s doing come June?

And in the meantime, who wants to watch that crap? Does anyone, like, care about, you know, basketball or anything? If you’re a fan in PHX or Philly, why would you go to a game when it’s abundantly clear from the moves your team is making that they have ZERO interest in winning in the here and now. They have SUBZERO interest in fact – they’re actually trying to be terrible! At least in Boston, there’s a track record of not screwing up to give you some hope, but what’s gone well for the Buzzards or the Bucks anytime in recent memory, or for the Charlotte Bobcats, like, ever?

The LOSE inherently frowns upon tanking in principle. It’s easy enough to lose already without trying to do so. And being a former Sonics season ticket holder, I have a very good reason to hate the NBA. That being said, the LOSE loves the game and has been coaxed back to the league thanks to the Golden State Warriors, a group of terrific young talent which combines some of the game’s greatest shooters (Stephen Curry, Klay Thompson) and a collection of good passers at every position to create the league’s most interesting and most watchable team. They’re fun to watch and they possess enormous potential as they build off a solid season a year ago. But prior to last season, this was the Warriors. 30+ years of buffoonery. Whole seasons that were bad ideas to began with, others which were abandoned.

(And by the way, I have to credit that Bill Simmons piece on the Warriors as inspiration for this whole blog, because it’s the greatest single LOSE blog ever written by someone other than me.)

Once losing starts, it can be really hard to turn it around. You cannot simply flip a switch and write a big cheque. It usually doesn’t work that way. It could be argued that the NBA isn’t that dissimilar from the EPL, for example, in that there are teams at the start of the year which go in admitting straight up that they have no chance whatsoever. But unlike the EPL, where stinking gets you a ticket to Division Two, the NBA is a closed system. There are probably about 10 NBA franchises which deserve to be relegated to the D-League. If there was ever a league in need of a second tier, it’s this one. Perpetual awfulness doesn’t happen in the EPL. But in a league like the NBA, there are always ready-made excuses and justifications as to why your team is terrible – and why it just might continue to be terrible for a very long time. But hey, keep clearing out that cap space. Maybe it will come in handy. And try to fill some of that space under your thinking cap, while you’re at it.