Thursday, August 16, 2012

Henry Abbott, the Lakers, and the Limits of the New Labor Agreement

I have a conflicted relationship with Henry Abbott, of Truehoop and Laker hater fame. The incredible writing of FreeDarko that drew me into the blogging world initially, but I used to read every line TrueHoop published. Nowadays I don’t find myself reading it on a regular basis. Abbott’s refusal to own his palpable bias irritates me, but it's more that he can be purposefully narrow to create controversy and has become unbelievably predictable. In May, Kobe hit a clutch shot and I wrote: “I’d bet the farm that my Kobe-Nemesis Henry Abbott is already planning a huge post to talk about the merits of hero ball.” TrueHoop put up that exact post several hours later.

I try not to pay much attention, but Abbot’s latest Laker bashing is too much. Lamenting the Dwight trade, Abbott lashes out without fury or purpose. If I may summarize:
1) Like flies in your house (??), this is just how the world works and who are we to fight nature?
2) The NBA is STILL broken guys, and we can kind of blame the system. Damn stars!
3) But the Lakers are spending too much money!
4) Alright, fine, the Lakers have played their hand pretty well...
5) But the Lakers are overrated anyway and don’t believe the hype.

If there were a cogent point to all this, maybe it’s his last sentence about the Lake Show: “If it works, it’ll be despite, and not because of, the NBA’s ‘system.’” As you can imagine, Henry and I do not agree.

ESPN colleague-bot Hollinger
likes the Lakers off-season
Before the other arguments, let’s talk basketball. Yes, the Lakers lost to an outstanding Thunder team and Dallas during an epic hot streak the last two years, but don’t underestimate this team. Mitch got Nash AND Howard for picks, Bynum, and cap space, far less than the Knicks gave up for Carmelo. Nihilistic basketball robot John Hollinger has long advocated sacrificing star power for multiple pieces because the Laker depth was that horrible. Well, the Lakers got the greatest shooter ever (perennial 50/40/90 threat Steve Nash), a huge defensive upgrade in D-12, 3-ball machine Jodie Meeks, and Antawn Jamison to lead the bench. All while retaining core assets. There are question marks, but if anyone can keep everyone happy, it’s the best passer of his generation. The Lakers now have the ultimate good cop (Nash) teaming up with the best bad cop this side of KG (Kobe). This team is no lock, but it seems absurd to dismiss a team this talented offhand like that.

What Did This CBA Change?

I’d like to discuss exactly what changed under the new Collective Bargaining Agreement. Let’s be clear – this was about money, not competitive balance, and Stern was pushed here because the new class of owners wanted higher operating profits to justify their inflated purchase price. The league was probably disingenuous about how much teams were losing at the time, but managed to get what mattered most: financial concessions. The players’ share of Basketball Related Income dropped from 57-50%, along with lower raises, shorter contracts, and limits on extensions. Team revenue sharing more than quadrupled to $180M per year.

Henry, it's all about the Benjamins
Competitively, some changes hurt luxury tax payers, like reduced (but not eliminated) access to mid-level exceptions, the second look at players being cut through the amnesty program (See: Billups, Chauncey), and a steeper luxury tax. Early returns have been mixed, with Houston’s backloaded offer sheets netting them Jeremy Lin and Omer Asik, but the superstars are still teaming up. This is where the union won, allowing these loopholes to shrink instead of disappear. For all the talk of a hard cap on spending, the NBA didn’t get it and teams with money can spend freely as long as they get under before triggering a severe repeater penalty (by paying the luxury tax 3 out of 4 years). Continued exceptions are also invaluable, allowing capped out teams to sign non-minimum players.

Where this really becomes about money is the max contract. Theoretically, the home team can resign max players like Dwight and LeBron for millions more and additional years. Practically, however, this has just meant stars take their franchise hostage a year earlier and force a trade before free agency. Additionally, the smaller contract size means players like LeBron will continue being underpaid, allowing several of them to fit financially and congregate on one roster. The NBA’s preferred model, one max surrounded by sensibly paid complements, has been replaced by teams pinning everything on strategic cap space and plans to surround maxes with exceptions, minimum salaries, and whatever young talent they can retain.

The Importance of Management

Abbott’s post sounds suspiciously like the words of a man with a mouth full of sour grapes. The Lakers are obvious villains because they’ve had so much success while being a high profile spender. Other spenders like the Knicks are terrible and the media loves Cuban so they ignore that he, too, bought his championship. With 5 titles and 17 series wins, the Lakers are the most successful team of the modern era; however, the Lakers are only 4th (beyond Abbott’s own Trailblazers, Mavericks, and Knicks) in luxury tax spending. Looking at these in concert, it’s clear that spending doesn’t guarantee success (and Abbott’s Blazers are barely edged out by the Knicks for the worst return for their money). As Simmons put it, “Just because you're a big-market team that can outspend everyone doesn't mean things can't get horribly screwed up. The Lakers nailed six franchise-altering moves over the past eight years, and that's not including last month's Nash trade.”

In Mitch we trust
While Abbott contends that this is all about success despite the system, I’d argue it’s because the Lakers have been the smartest within it. Going back to Vlade for Kobe, the Lakers have consistently made great moves. Abbott looks at next year’s $100M roster, which costs $130M this year and $185M in 2013-2014 ($100M salary +$85M tax) outside of $50M in yearly revenue sharing, and basically dismisses the Lakers as the Yankees of the NBA. He’s wrong though. Yes, the $3B TV contract and deep pockets help short term, but every contract but Nash and Dwight’s potential extension is gone in 2014. They get hit for one year, then Kobe can retire with a KG-like deal (3 years/$33M) and the Lakers avoid the repeater penalty while rebuilding on the fly with major cap room. You heard it here first: the Lakers will not be $30M over the cap in 2014-2015. The NBA allowed loopholes and Kupchak drove a potential championship parade right through.

With more difficult rules, the importance of management rises. We talk about how Sam Presti rebuilt the Thunder, but most teams are not as smart, forward-looking or opportunistic. For every franchise that manages its assets intelligibly, there are many others without a plan, hopelessly drafting redundant players and spending like drunken sailors when they get cap room. Similarly, a team with a strong culture and pedigree can afford to draft injury and character risks, but every lottery sees GM’s reach to take wildly speculative gambles on potential over NBA readiness (I.e. the Grizzlies taking Thabeet over Harden). Losing can also stem from a dysfunctional organization. The Blazers, for instance, haven’t won a playoff series in nearly 15 years partially because Roy/Oden got hurt, but its ownership also fired an incredibly talented GM and created a toxic culture that is still stinking up the Northwest. Pritchard? He’s now succeeding Executive of the Year Larry Bird in Indiana.

There Is No Model for Rebuilding

Where I do agree with Abbott, is that this trade makes me sad about the Magic and the avant-garde rebuilding philosophy. The Magic refused All-Stars Bynum and Igoudala, instead accepting a bunch of loose change and mediocre picks because they hoped razing the team to the ground would make them bad enough to get the next Anthony Davis. I’d have gambled on appealing to Bynum’s ego with a long-term plan centered on him, but they’ll wait to see if they can manage to draft someone equally talented down the line.

Reading “Moneyball” ten years later is fascinating because the undervalued assets in baseball have really changed. Successful MLB teams have seen their strategy evolve with the game, market, and rules. To that end, this Freakonomics post changed how I thought about the modern standard for rebuilding. Of the 150 teams winning 55 games from 1975-2011, only 2 had won less than 20 games at any point in the previous four years. Does that scream tank to you? In the lottery, there are only so many sure things and teams get stuck in a perpetual down cycle. Sometimes Derrick Rose is swept up by borderline lottery teams like the Bulls instead of the lower class.

You can't idiot-proof
an NBA franchise 
My point is that there is no one-size-fits-all philosophy for rebuilding. The Lakers are built differently than Superteam Miami, Draft Darlings OKC, and the Robber Baron Celtics, who just stockpiled trade assets. Teams need to recognize their strengths, opportunities, and stick to the plan. Big markets will attract free agents and can stomach some tax, that’s inevitable. Other teams need to be shrewd and build with purpose. Was OKC a destination before Presti and Co turned it around? The Bobcats being terrible today screams of mismanagement, not bad luck or lacking lottery picks.

Prophecies of the end of the NBA’s middle class are overblown. Long-term, the repeater penalty, luxury tax, and minimum salary will be successful at condensing the range of salaries. It seems safe to say no team will ever have a team this far over the cap again, so let’s enjoy it Hollywood. Success today is more expensive and teams won’t be able to afford their cores after the stars graduate from rookie deals. Future Thunders will only stay together for a few years before making tough choices, reloading with inexpensive talent, or taking risks that might not have been necessary before. While this may shrink championship windows and incrementally improve competitive balance, the NBA can never create a CBA that replaces intelligent decisions.

1 comment:

  1. the only thing i would mention is that the last time a team won the nba title without paying the luxury tax was the miami heat in the 05-06 season. and even then there are only 2 teams in the past 12 years that have done that. although the high paying teams don't always win the title it trends that they are more likely.