William Rhoden penned a column last Friday in The New York Times entitled “Poor Decisions? Knicks Deserve a Mulligan.” Rhoden argues in this column that the Knicks penchant for making bad decisions have left the team with a roster in salary cap hell. Too many bad contracts have resulted in a team unable to make any significant roster changes for at least two years. This means two more years of losing for the richest franchise in the NBA. Given the prominence of this team to The Association, Rhoden argues that David Stern should allow the Knicks to dump contracts and move itself under the salary cap. Then the Knicks would be able to make the moves necessary to bring a contender to The Big Apple.
Okay, if you’re not a Knicks fan, this argument may strike you as silly. Why should Stern suspend the rules so that one team can get better? After all, sports are a zero-sum game. If one team gets better, others must get worse. So another way of looking at this is to ask why Stern should suspend the rules to reduce the fortunes of teams outside New York?
If we approach this problem from the perspective of a profit-maximizing league, Rhoden’s argument might make some sense. On average a win increases a team’s regular season gate revenue by less than $300,000. But in New York, this same win increases the gate by more than $500,000. Wins are thus worth more in New York, and if the league was looking to maximize the value of wins it would make sure that the Knicks won more and teams located in Minnesota or Atlanta won less.
Of course teams do not split regular season gate revenue, so increasing wins in New York only benefits the Knicks, not the other members of the Association. One could argue that the Knicks generate a larger national TV audience than a team like the Spurs (although I would need to see some data to confirm this hypothesis) and therefore it would benefit the league to put a winner in New York (since TV money is shared by the league).
Although one can question whether the league truly benefits from having a winner in New York, it’s not clear that Rhoden’s plan would actually lead to more victories for the Knicks. The Knicks, as Rhoden noted, already have the league’s largest payroll. And they have been among the league leaders in payroll and revenue for some time. Despite this advantage, the Knicks are losers.
In the Winter, 2007 issue of the Yale Economic Review I authored an article (noted prominently on the cover) examining why the Knicks are such losers. My argument should be familiar to readers of The Wages of Wins. It should also be familiar to those who read The Wages of Wins Journal, where as the following list of posts illustrate, the Knicks are a frequent focus.
Pinning Your Hopes on Eddy Curry?
Isiah Thomas Discovers Role Players
Time to Play Balkman and the Genius of Isiah
In the Yale Economic Review I noted that scoring is over-valued in the NBA. Whether we look at free agents salaries or the coaches voting for the All-Rookie team, we see that scoring is the one factor that dominates player evaluation. Consequently scorers are expensive and teams have to limit their employment of such players.
Isiah Thomas – the Knicks general manager and coach – is blessed with a very large payroll. Consequently he did not have to limit his employment of scorers. For the 2005-06 season the Knicks had an abundance of expensive scorers – Stephon Marbury, Eddy Curry, Maurice Taylor, Jalen Rose, Jamal Crawford, and Quentin Richardson – and a Hall of Fame coach in Larry Brown. But these scorers were not able to produce very many wins, and the coaching of Brown could not change that fact. In the end, this team of scorers failed miserably.
In the past two drafts the Knicks have added David Lee and Renaldo Balkman, two non-scorers who can produce wins. So it’s possible that Isiah has learned a lesson, although his talk of “team chemistry” suggests otherwise.
If Isiah has learned nothing from past experience, taking away his salary cap woes will solve nothing. Isiah will simply take his new money and purchase another collection of scorers. On the other hand, if some learning has taken place, Isiah could quickly build a winner in the Big Apple.
Of course, we again come back to the point made earlier. It’s not clear that non-Knicks fans should care to see the Knicks win. And given that Stern represents all 30 franchises, he may have a tough time explaining why the rules should be suspended for Isiah Thomas and the Knicks.
– DJ
Wages of Wins Journal 
Okapi
May 28, 2007
The William Rhoden suggestion seems like it would cultivate moral hazard concerns by exonerating teams after their early bad decisions. Perhaps at the margin it encourages teams to spend somewhat more recklessly.
JLewis
May 28, 2007
Dave,
I apologize in advance if you answered this question in the book but can you tell us what makes a “quality scorer” vs. an overpaid scorer?
It strikes me in watching the DET/CLE series that Cleveland is definitely suffering due to its inability to score. Looking across the court at Rip Hamilton, a pure scorer in the sense that he can’t do a damn thing except score, you see the perfect example of this paradox.
If a guy like Hamilton were available, it’s likely that a team like Cleveland would willingly overpay for him since the 11 guys not named LBJ on their roster have proven that regularly putting the ball in the hole is a tougher task than it appears on the surface.
At the end of the day, would you recommend only paying scorers with proven abilities to contribute in other ways (DWade/Kobe/Duncan) or is there another criteria that you would recommend for GM’s?
dberri
May 28, 2007
JLewis,
This is blasphemy for a Pistons fan, but I am not sure the data tells us that Rip Hamilton is a “quality” scorer. Per field goal attempt he get 0.97 points, which is just about average for an NBA player. In the playoffs he is at 0.89, which is below average. I definitely like watching him play, but I am not sure he is an exceptional scorer.
And in the regular season, the Cavs were a bit worse than the Pistons at getting points from their field goal attempts (0.96 to 0.98). And in the playoffs this difference is a bit greater (0.92 to 0.96). But I am not convinced Rip Hamilton would solve the Cavs problem. At least, not given how he has played in the playoffs.
I think your argument about over-paying suggests that quality scorers are scarcer than quality rebounders (or other quality players). I am also not convinced this is true either.
There is a sense that you need scorers because they can get their own shot. But as we saw with the 76ers when Iverson left, other players will shoot when the team’s so-called scorer is not available.
blazed
May 28, 2007
No.
Steve Walters
May 30, 2007
Regarding this Q: “So another way of looking at this is to ask why Stern should suspend the rules to reduce the fortunes of teams outside New York?”
How ’bout this A: Thanks to the “uncertainty of outcome hypothesis,” or the idea that fans like competitive balance, maybe having the Knicks become viable competitors rather than imitate the Washington Generals for a couple years would enhance make non-NY fans somewhat happier, and mitigate the “zero-sum” problem a bit? (And, speaking of the Generals, what was Red Klotz’s career Wins Produced?)
Steve Walters
May 30, 2007
…And another thing:
If the rules are suspended, the worry would be that it would blow up the league’s salary cap system and harm competitive balance in the long run. (Because big-market teams would think they have an “out” when they overspend on talent.)
But the league’s overall interest is rarely served when one team’s circumstances are hopeless. The key is to make sure that incentives are appropriately structured–i.e., that stupid behavior is EXPENSIVE.
True, hopelessness on the court is expensive to ownership, but also punishes fans. Might there be a way to allow the Knicks’ owners to dig out of this hole, preserve appropriate incentives, and give NY fans some hope?
I’d propose the following: (a) Allow NY to trade some bad contracts with sufficient cash to induce other teams to take them on; (b) only count the NET cost of the player toward the acquiring team’s cap figure; (c) impose a “luxury tax” on such deals, so that NY’s penalty for bad deals escalates.
E.g., suppose NY has a player worth $5M who they’re paying $7.5M. Another team would be reluctant to acquire this player unless paid $2.5M to do so–and only then if they have cap room. But if they spend their cap room on such a mediocre player, they’d pay a competitive price, as well. So we can “make a market” for bad contracts by only counting $5M of this player’s contract toward his new team’s cap (i.e., his $7.5M salary minus the $2.5M cash they got from NY). Then tax NY, say, 40% on the amount they send to acquiring teams in such deals, and divvy those payments up among all teams (like MLB’s revenue-sharing system).
In this way, NY might be able to clear cap room and improve more quickly than under the present system, but they wouldn’t realize “windfall profits” from a rules suspension. Of course, they’d improve IF AND ONLY IF Mr. Thomas starts making better personnel decisions.
JLewis
June 1, 2007
Dave,
Since this thread is now about a week old I don’t know if you’ll come back to it but just in case, let me follow up.
I will start by saying that I think you are right on with your analysis of player values relative to actual contribution and maybe my question actually shows why there are so many people that don’t buy in to “stat geeks” and their “calculations.” I agree with you but when I watch a team that plays smart, defends well, and regularly comes up short because they just can’t score my eyes tell me “that’s why guys that can score get overpaid.”
Do you think the overvaluation is due to the fact that scoring, or more accurately, lack of scoring is more obvious to the viewer than a lack of rebounding, passing or defensive skill?
Stated another way, if you could start a team from scratch and draft any players in the league except the top 40 scorers, would that team be able to compete? Would the excellence in the other areas limit the other teams offensive efficiency and create enough opportunities for these subpar scorers to score enough to win?
I’m sure your model says yes, but my eyes have a hard time with it and I’m a WoW believer(which again is why I think we see so much resistance to WP48 as a measure of true value).
dberri
June 2, 2007
JLewis,
I think you are correct. Scoring is over-valued because it is the most dramatic event in the game. A 30 point scorer stands out in a game. Missed shots, turnovers, and even rebounds are less obvious.
About the top 40 scorers… you could construct a team without a top 40 scorer from the past, but eventually, someone on your team would become a top 40 scorer. Someone has to shoot, which is what we saw when the 76ers traded Iverson. There was no top 40 scorer on that team when the trade happened. But Iguodala became a scorer after the trade because he had to take the shots.
I would also add that the Pistons from 2004 also support my position. As we detail in WoW, the leading scorer on that team was Hamilton, and he only averaged 17 points per game. He clearly was not a top scorer in the league. Yet that team won the title.
ToddB
June 6, 2007
I’ve been mulling your “mulligan” piece and your Laimbeer post has prompted me to respond. The league did give the Cleveland Cavaliers a mulligan in 1986, giving the Cavs the first pick in the draft that resulted in drafting Brad Daughtery. The Cavs were horribly mismanaged—trading away Bill Laimbeer and James Edwards who went on to win titles with the Pistons. Not to mention trading away Kevin Johnson, Ron Harper, and Charles Oakley. And drafting Danny Ferry with the first pick in a subsequent draft. Sigh, I feel for the Knicks fans. I’ve been a long suffering Cavs fan, if you haven’t guessed.