Imagine that you made a mistake at your job that cost your employer $11.6 million. Would you expect to be fired? For most of us (okay, maybe not tenured professors, but that’s not my point today) the answer would be yes. For Isiah Thomas, though, this is business as usual.
Well, it’s a bit more than business as usual. Thomas did not “mistakenly” harass Anucha Browne Sanders. This was clearly not a case of Thomas spilling a cup of coffee. No, Thomas took deliberate actions that he has now learned are considered quite wrong by the society he lives in. Whether or not he learned a lesson, though, is still debatable.
Both Tim Kawakami of the San Jose Mercury News and Tom Ziller of AOL Fanhouse have made the same observation I wish to build upon today (hat tip to Henry Abbott at TrueHoop). In his role with the Knicks, Isiah has made a number of very large financial “mistakes”. Many of these eclipse the $11.6 million his employer will be paying Ms. Sanders (assuming the appeal process does not alter this decision). I wish to go beyond Kawakami and Ziller, who each listed the blunders, by trying to quantify the amount of money Isiah has already cost his employer.
Let me start with the collection of talent that took the floor in 2006-07. The Knicks website at NBA.com noted that “every player on the Knicks’ roster has been acquired during Thomas’ regime.” So the team we saw last year was chosen by Isiah the general manager, and coached by Isiah as well.
For each of these players we wish to look at two issues. First, what did Isiah and the Knicks pay the player? And second, what was the value of the player’s production?
Salary we can get from a variety of sources, and I am using the numbers reported by the USA Today. For the value of a player’s production we need to know how many wins the player produced (or his Wins Produced) and how much each win was worth.
Wins Produced I have already calculated. For the value of a win I am going to return to the same approach I took in early September when I looked at which players in the NBA were overpaid last year. In this discussion I noted the following:
According to the USA Today, players were paid $1.818 billion in 2006-07. And these players must have produced 1,230 wins (41 wins multiplied by 30 teams). So each win must be worth about $1.478 million (I would note that this is just a crude estimate, and if I were writing an academic article – which I am not – I would try harder to measure the value of a win).
Yes, $1.478 is not precise, but let’s go with it.
Okay, with numbers in hand, let’s turn to the Knicks in 2006-07.
Table One: Wins Produced and Salaries for the Knicks in 2006-07
Table One reports the salary paid to each Knick player, his Wins Produced, the value of this production, and how much the player was overpaid or underpaid.
There were fifteen players who played for the Knicks last season. Of these, eleven were paid a salary that eclipsed the value of the player’s wins production. Topping the list of overpaid are many of the players identified by Kawakami and Ziller.
For example, Stephon Marbury’s Wins Produced was 4.0 last season. If each win is worth $1.478 million, he created nearly $6 million in value. He was paid, though, $17.18 million. This means that Marbury alone – a player Isiah chose to put on this team and coached – cost the Knicks nearly as much as they will pay Ms. Sanders.
Moving down the list we see six names: Steve Francis, Malik Rose, Eddy Curry, Jerome James, Channing Frye, and Jamal Crawford. These six players were paid $45.7 million last season but combined to produce -0.6 wins. In other words, that was $45.7 million for nothing, nada, zilch.
And this is just what the Knicks did last year. If we look at 2005-06 we see a similar story. Marbury was paid $16.45 million that season, but his 4.2 wins was only worth about $5.6 million (a win was slightly less valuable in 2005-06). So again, he cost the Knicks nearly $11 million. Looking over the rest of the 2005-06 roster we see that James cost the Knicks $7.4 million ($5 million in salary for a -1.8 wins) and Curry cost the Knicks $4.8 million ($7.4 million for 1.9 wins). And then we have Maurice Taylor, who was paid $9.1 million to produce -3.2 wins. So Taylor cost the Knicks $13.4 million in 2005-06.
The decisions of Isiah have not all been blunders. He did draft David Lee and Renaldo Balkman. These players were paid only $2.1 million in 2006-07 and combined to produce 19.4 wins. So these two generated $26.6 million beyond what they were paid.
But despite an ability to find productive talent in the draft, most of the decisions Isiah has made have proven quite costly to the Knicks. Just going with the salary numbers from USA Today (which understate the true roster cost because players not on the active roster at the end of the season are not counted) the Knicks have paid $268 million in salaries the past three seasons. Across these three seasons the team has won 89 games. Given the value of a win in each season, these 89 wins are worth $124 million. So the combined roster across the last three seasons has cost the Knicks $144 million.
And that is the bill as it stands today. As Kawakami and Ziller note, many of the overpaid players are scheduled to be collecting paychecks from the Knicks into the future. And that includes Zach Randolph – Isiah’s latest acquisition — who is unlikely to produce enough to generate the $51 million he is currently guaranteed.
All of this brings us to the point of the story. Is the Sanders case likely to teach Isiah a lesson? Isiah did something wrong and as a consequence, someone else is going to pay $11.6 million. In his tenure as general manager of the Knicks, though, he has done many things that are wrong and someone else has paid much more than $11.6 million.
To answer the question, we turn to economics (surprise). Economics teaches that people respond to incentives. If a person does something good and receive a reward, we can expect the good behavior to happen in the future. If the person does something bad, though, and nothing happens; well, then we shouldn’t expect any lesson has been learned. At least, that‘s what economics tells us.
– DJ
Our research on the NBA was summarized HERE.
The equation connecting wins to offensive/defensive efficiency is given HERE
Wins Produced and Win Score are discussed in the following posts
Simple Models of Player Performance
What Wins Produced Says and What It Does Not Say
Wages of Wins Journal 
Tball
October 4, 2007
A few of these player value posts have brought to light the fact that if a drafted player does not produce a negative value, that player will be a good investment (although not all David Lees). That fact is a direct result of the rookie cap.
But is it really useful in analyzing the performance of a GM? Wouldn’t Isiah have dropped $10m/yr on Renaldo if the NBA collective bargaining agreement didn’t save him? Should wins from a rookie be given a different value than wins from a veteran (or someone on at least their second contract)? Most, if not all the players selected in the first round of the 2007 draft would be making more money if they were allowed to compete with the 2007 free agent class. The league imposed imbalance deflates rookie contracts and inflates free agent contracts. Should that change how we view Renaldo’s deal against Jeffries’ deal? Or are we rewarding Isiah for using these picks as opposed to trading them away to acquire veterans?
dberri
October 4, 2007
Tball,
Are you saying that Isiah looks even worse than the picture I paint?
You are correct that the collective bargaining agreement partially bails him out. But since scoring dominates pay in the NBA, and Lee and Balkman don’t score, it is likely both would be generating surplus value even on an open market. In fact, I think that is what we will see as each player progresses in his career.
TK
October 4, 2007
You should really include the Larry Brown fiasco as well. Isiah hired him in 2005, on a 5-year contract worth ~$50M. Then after one disastrous year ($10M paid out), he fired Brown. I think the eventual settlement for the 4 remaining years on Brown’s contract was $18.5M. So there’s another $28.5M down the drain. Pretty soon we’ll be talking about real money!
William
October 4, 2007
Tball,
Doesn’t Isiah deserve credit for ignoring the usual player evaluation metric (i.e., points/game) and drafting players who rebound, keep the ball safe, and shoot efficiently?
Jeff
October 4, 2007
Hi Dave,
I have another request for a team review. The Atlanta Hawks were picked by Mr. Hollinger to make the playoffs (7th). Could you do a review and perhaps an outlook for the upcoming season? It does look as though they will be better with the addition of Horford. Thanks
Andrew
October 4, 2007
Great blog. First, let me preface this by saying I agree that Isiah is a horrible GM. However, is this really the best way to prove it? Did the team make money last year? For instance, the Yankees “waste” more money than any other team, I am sure, but they also make more money than any other team.
One more thing. You consider only the money paid to the players. You should probably also look at the luxury tax hit they take for going over the cap, thereby forcing them to pay “double” for a lot of those overvalued players.
Thanks.
Paulo
October 4, 2007
Hi Dave,
Great post. I see a lot of requests here, and unfortunately, I do have a few of my own. Is there a way in wordpress blogs to tag keywords for your entries? Or in a related matter, a search within your blog would be great. I don’t know if wordpress allows those features, which I feel would help the other users browse through old posts.
The reason I’m asking those is I remember you posting something about the “Bad Boys” Pistons. I’d like to see the numbers again, and if possible, I think it would be great if you could put up a chart on how player-turned-executives have fared such as MJ, Paxon, Dumars, Mullin, Bird etc. It doesn’t have to be a per-year thing, but rather the current teams where they have pretty much have selected almost all of the players (I can’t think of a relatively newly hired player-turned executive right now, so I can’t cite who not to include).
dberri
October 4, 2007
Paulo,
There is a search feature. I use it all the time to find what I said before. It is way on the bottom on the right. If you search for Pistons (or Laimbeer might be a better term if you are looking for Bad Boys) you should find what you want.
Paulo
October 5, 2007
Sorry. I was probably expecting it to be somewhere on the upper parts of the page. My bad.
dberri
October 5, 2007
Paulo,
Your right, makes more sense at the top.
Charles Follymacher
October 5, 2007
Not to excuse Isaiah’s behavior, but he’s not the only one to blame in all this– he and that silver spooned Knicks owner are quite the tag team. One, while it’s possible to somewhat weasel around the sexual harrassment charges, what really got them in trouble was the firing. It was verry difficult for the defence to make the case that Browne actually sucked at her job, so that’s chiefly why she won (wrongful dismissal).
So who actually did the impulsive firing? Ownerguy, not Thomas. Who refused to break off a reasonable go-away settlement before it got to trial? Ownerdude.
Two, every GM has a budget that’s determined by the ownership. No way Thomas could spend well into the luxury-tax without being handed a blank cheque first. For all his drafting savvy, Thomas obviously has a huge blindspot for evaluating vet talent. ZBo may represent the beginnings of lessons learned in that department, but we’ll see. We’re assuming he wasn’t under some crazy pressure to win asap and so put himself behind the eight-ball with these desperate signings. We can only hope he’ll start appreciating WoW-style stat analysis now.
Too bad we didn’t get to see how Thomas would do if he was forced to be a lot more fiscally responsible.
p.s. any chance you can do the same kind of analysis to evaluate Larry Bird’s GM skills?