Josh Childress – the most productive player on the Atlanta Hawks in 2007-08 – is leaving the country. When I first heard this story I thought (and so did JC Bradbury): “What a great story for The Wages of Wins Journal.”
But as someone noted (and I forget who), I have a job and a blog, not a job to blog. So I was not able to drop everything today and get my take on this story 0n-line.
In the meantime, two people at ESPN whose job it is to cover these events – John Hollinger and Henry Abbott – did comment on this story. And their analysis was excellent.
Hollinger’s Focus on the Hawks
Hollinger’s post — Childress’ move to Greece hurts Hawks on many levels – reviewed how this move impacts the Hawks.
First and foremost, obviously, it deprives the Hawks of one of the best sixth men in the game, a guy who could make a huge impact without needing any plays run for him because of his ability to attack the glass, score in transition and play off the ball.
It also leaves them scrambling to fill out the roster, with most of the offseason’s top free agents already claimed by other teams. Atlanta has only eight players under contract at the moment, and two of them (oft-injured Speedy Claxton and oft-inactivated Solomon Jones) barely count. Even if the team can re-sign Josh Smith, the Hawks are still paper thin.
But the real damage here isn’t immediately visible. Nothing could do more to perpetuate the Hawks’ standing as one of the league’s worst-run organizations than to have a player they desperately wanted to keep bolt for another continent. The stink from that will linger long into the future — affecting other free agents’ decisions to join the Hawks and/or remain with them — until there comes a time when the organization can prove it has its act together.
Abbott Focuses on the NBA
The Hollinger column was less than 1,000 words. Henry Abbott (of TrueHoop) wrote nearly twice that amount in a wonderful post — Say Goodbye to Josh Childress, Say Hello to Some NBA Soul-Searching – detailing the impact of this move on the NBA.
Abbott begins by noting – contrary to what many might think – that this move is ultimately good for the NBA. Childress has demonstrated that a European team can offer a competitive contract to a legitimate NBA player. This means the NBA now has competition. And as Abbott observes (something economists have noted for a few centuries), competition is good. Specifically competition forces a firm to be efficient.
Of course this means that the NBA – which has not faced competition since the days of the ABA – is currently inefficient. And how is it inefficient? Abbott offers three examples:
1. The NBA is not necessarily open to new ideas:
There is a vast “boys club” that manages many NBA teams. You know the names. Once you are in the club of people who make big NBA basketball decisions, you’re in whether you’re particularly good at your job or not. Meanwhile, there are all kinds of people who were born to do the work, but are locked out because they lack the basketball pedigree. (Sometimes a Jeff or Stan Van Gundy, Lawrence Frank, Ed Stefanski, etc. will buck the trend.) If, as an NBA owner, you’re competing strictly against other teams that select their leaders from the same small pool of candidates, then you’re probably not going to suffer too much from recycling the same coaches and GMs again and again. But if some teams are really casting a wide net and finding better coaches, better front office people, better trainers, better player development people, and better players from all over the world then that brings around a level of basketball that is just higher, and that is good for us fans. This Childress move is a step in that direction, as in some small way, a real deal NBA player signing in Greece tells us that NBA teams are, in fact, competing with Euroleague teams in ways we had not thought they ever would. (One of Childress’s agents, Lon Babby, said today that when the negotiations were unfolding, the Hawks organization “obviously never contemplated that we’d go outside the NBA.”) There have been lots of reasons for smart NBA people to learn from Europe, and vice-versa.
2. The NBA overemphasizes scoring:
The NBA has a deeply entrenched superstar system, built around those who score the most points. Despite what the League might tell you, the stars get the calls, the stars get the ball, and the stars get the marketing dollars. The stars can even get coaches fired. There are reasons for all of that. But the truth remains that, if it’s just about winning basketball games, that star system, and an obsession with points, can be a burden. (A lot of “stat geek” work is really the quest to isolate what, beyond obvious stuff like points, really matters to winning.) Childress made clear that in his conversations with Olympiakos, and with other people knowledgeable about European basketball, he learned that the system was different in Europe. “I assumed that I’d have to go average 20, 22 points a game here,” he explains. “But the Euroleague MVP most years averages like 12 points, five rebounds, and five assists. It’s an award that the guy who actually helps his team win the most wins. … My coaches here just want me to be versatile, and to play four positions, and to help the team win as many ways as I can.” Some of that mentality wouldn’t hurt the NBA any.
3. The NBA’s collective bargaining agreement restricts the free market
The NBA’s collective bargaining agreement includes a ton of complicated clauses. Each serves a purpose, and you can make a case that, all told, it’s a good and fairly fair system. But regulation is always burdensome, and this league, famously run by lawyers, is knee-deep in legalese. In this instance, those rules created a really weird deal. According to Josh Childress, there were championship-contending NBA teams that were willing to pay him more than the Hawks would. A sign-and-trade couldn’t be worked out, so Childress was stuck. But that makes a situation where here’s an employee, a place that wanted to employ him, and an agreed upon price. In normal human life, that’s all you need to make a deal. You can only tinker with the free market so much before it starts depressing normal economic activity. This is one of those cases. A rule (essentially, the salary cap) designed solely to keep NBA teams competitive with each other now ends up helping a whole different league. Will the NBA change the salary cap in some profound way to address that? (Lon) Babby (the agent for Childress), for his part, says that he would “never underestimate the capacity of the NBA to respond to market trends.”
Before I offer a few comments on what Abbott (and Hollinger) have said, let me repeat Abbott’s conclusion:
But now Josh Childress — an open-minded and intelligent Stanford guy — is sending out a piece of news that he has done his homework, he has checked out the scene in Europe, and he finds the situation to be … extremely nice. Nice enough that it’s worth comparing the apples of an NBA contract with the oranges of a Euroleague contract.
That’s a new way of thinking to Josh Childress’s contemporaries, who are some of the best players in the world. If he ends up reporting that life continues to be nice in Athens, well then that has to change how almost everyone in power in the NBA thinks about things. They have to think globally, and be the best at what they do not just out of thirty teams, but anywhere in the world.
The NBA has a HUGE head start in that effort. NBA teams are, currently, the best (although who would be shocked if teams like CSKA Moscow steal a game or two against NBA competition this coming preseason). NBA teams have deep pockets, a business model that drives profits to most teams, and a brand that continues to have tremendous value in the minds of nearly everyone.
But what the NBA does not have, anymore, is a free pass to supremacy. And if you’re a fan of good basketball, that’s a good thing.
Some of My Thoughts: Ending Monopsonistic Power?
Okay, that’s quite a bit to chew on. After reading Hollinger and Abbott I realized that each had made most of the points I was going to originally offer when I first heard about this story. Although what each said is quite insightful, I would build upon one observation Abbott made.
The NBA’s collective bargaining agreement has rules that confer monopsonistic power to teams. What does this mean? A monopoly is a single seller of a good. A monopsony is a single buyer. When the population of buyers or sellers in a market is restricted, market power tends to get transferred to the smaller population.
In the case of the NBA, Childress had trouble finding another buyer for his services in the NBA. This is probably because other NBA teams figured the Hawks would match an offer for Childress, and hence it was not be worth the effort to open negotiations. When offers are restricted, monopsonistic power develops and the buyer can make the purchase with less money.
And it’s important to note, that is the purpose of these rules. The NBA limits the free market for a player’s services to transfer money from players to teams. It’s not about competitive balance.
Of course all this will only work if you can maintain monopsonistic power. What Childress has demonstrated is that European basketball teams – who are not part of the NBA’s collective bargaining agreement – are potential buyers of top basketball talent.
With European teams entering the market, the NBA’s ability to exploit (i.e. pay workers less than the revenue the worker generates) professional basketball players is mitigated. And this means the NBA is going to have to either
a. live with players like Childress emigrating to the Europe.
b. devise new rules so that NBA teams can pay wages that are closer to what the player is worth.
More Thoughts: The Value of Childress
Now if the NBA changed its rules, would Childress get what he’s worth? Before I answer this question, let me post links to three columns I have written that describe the value of Childress:
So How Much did Atlanta Improve?
As these articles note, Childress does produce wins. But he doesn’t produce points. And as Abbott noted, the NBA does over-emphasize scoring in the evaluation of players. Consequently, Childress is probably going to produce more revenue (from his wins) than he is paid by an NBA team. And although he claims it’s different in Europe, I suspect (although I don’t know for sure) that European teams also over-value scorers. In sum, as long as decision-makers in basketball – wherever they might be – overvalue scoring, players like Childress will not get paid what they are worth.
At least, that would be my guess about European decision-makers. Let me close by noting that Childress is not the only NBA player moving to Europe. Both Hollinger and Abbott observe that the following five players from the 2007-08 NBA season will not be in the Association in 2008-09.
Josh Childress: 2,274 minutes played, 9.8 Wins Produced, 0.206 WP48
Carlos Delfino: 1,928 minutes played, 6.6 Wins Produced, 0.165 WP48
Juan Carlos Navarro: 2,117 minutes played, 0.6 Wins Produced, 0.013 WP48
Bostjan Nachbar: 1,660 minutes played, -2.8 Wins Produced, -0.082 WP48
Primoz Brezec: 475 minutes played, 1.9 Wins Produced, -0.189 WP48
An average player post a WP48 [Wins Produced per 48 minutes] of 0.100. Obviously Navarro, Nachbar, and Brezec were below average last year and hence are not really a loss to the NBA. Childress and Delfino, though, were productive players. It’s interesting to note that Delfino – like Childress – is a productive non-scorer. So perhaps Europeans can teach the NBA something about evaluating professional basketball players.
– DJ
The WoW Journal Comments Policy
Our research on the NBA was summarized HERE.
The Technical Notes at wagesofwins.com provides substantially more information on the published research behind Wins Produced and Win Score
Wins Produced, Win Score, and PAWSmin are also discussed in the following posts:
Simple Models of Player Performance
What Wins Produced Says and What It Does Not Say
Introducing PAWSmin — and a Defense of Box Score Statistics
Finally, A Guide to Evaluating Models contains useful hints on how to interpret and evaluate statistical models.
Wages of Wins Journal 
Owen
July 23, 2008
Monopsonistic….
Going to swish that around in my mouth, draw some air over it. What a word!
Excellent post. The Childress move is a really fascinating development, incentives working as well as ever. .
Sam Cohen
July 24, 2008
I’m not clear how the Childress signing shows anything other than that the NBA needs to be the best at offering money. If Olympiacos’s offer was less than the offer of the Hawks, we wouldn’t be having this conversation. Is it noteworthy that mid-tier players have decided that the prestige of playing in the NBA isn’t worth the lesser salary? Sure, but I hardly think this counts as a stunning development. (I label Childress a mid-tier player because that seems to be his general perception around the league; I recognize that WP indicates he’s much closer to being an elite player.)
I am concerned that if European teams make similar offers to other players like Childress (i.e. offers that NBA teams won’t match for mid-tier players), then the end result will be an NBA consisting of top-tier NBA talent and bottom-tier NBA talent (as we currently view these things), while European basketball will consist of sizable portions of mid-tier NBA talent. That won’t be enough to bring European basketball all the way up to the NBA talent level (at the top), but I think it would make the NBA game much more inconsistent because there’d be a sharper talent gap between the best and worst player on the floor at any given time. As a fan of the NBA, I certainly don’t think that’s a great result. At the same time, I have a hard time seeing how this result will lead to an increase in the quality of basketball play at the elite level (as Henry seems to suggest).
Tony Cohen
July 24, 2008
what we can hope for, long term, is a sharp drop in wins and effectiveness by teams overvaluing scoring while dismissing the ‘lesser’ talent. Dismissing as in not paying them.
Given time, maybe players will be recognized as great even if they have the temerity not to shoot 30 shots a night on 42% efficiency…..cough…Iverson……cough
I am for anything which might cause this to happen
Paulo
July 24, 2008
I think another good article worth reading would be Chris Sheridan’s take on the matter, and it deals more on the economic side of the issue.
Sam, I see your point, but I don’t think that the talent distribution wouldn’t be affected as much. Don’t worry, it’s still the NBA. It’s still *the* premiere basketball league. There is some talent over in the D-League, and there is talent over on the end of the bench, just waiting to get the opportunity. So far, it’s just Josh Childress, who’s skill set isn’t particularly special (for lack of a better word right now). I wouldn’t worry about the drop in the quality of play if I were you. Although you have to be mighty worried if you’re a Hawks fan.
Tball
July 24, 2008
Worth noting Brian Shaw started this revolution twenty years ago when he chose to sign in Europe instead of signing a rookie deal with the Celtics (bucking that monopsony). I don’t think its a move very many American players want to make. What I suspect does happen is Childress opts out of that contract after one year to come back over and sign with an NBA team as an unrestricted free agent.
With respect to European owners teaching NBA owners something, Bostjan Nachbar (1,660 minutes played, -2.8 Wins Produced, -0.082 WP48) signed for more than the mid-level exception. That isn’t a lesson NBA owners need.
Right now I think this story is about the restricted free agent clause and Hawks mismanagement. It could grow into a rookie cap issue, as many late first round picks could probably sign better deals in Europe. It could also be a story next season as many teams try to make cap space for 2010 by limiting their 2009 spending. I wonder if Olympiacos is clearing salary for 2010.
I think competition for the NBA could be good toward erecting CBA changes, but if Europe saps a chunk of NBA talent, the league will become watered down, just as it becomes through expansion. I don’t think that is good for the fans. And if they have to pay more to compete for talent, the money will come from the NBA fans. Knocking down monopsonies is good for labor, not for the consumer.
Erich
July 24, 2008
Entertaining long thought of the day:
The summer of LeBron becomes the transition of basketball from an American game to a European game, as the league’s top talent is lured over the Atlantic by high paying basketball teams unregulated by a salary cap.
This kind of competition certainly has a huge impact on the Collective Bargaining Agreement. Will regulation increase to keep RFA’s on their NBA team until they play through a qualifying year? Will the salary cap disappear in order to compete against European clubs? Will the current player allocation and trading regime be replaced by a transfers system much like soccer?
Certainly, the business side of the NBA just got a lot more interesting. Watch to see if Mark Cuban either puts his team up for sale or starts buying European clubs.
GoldShammGold
July 24, 2008
Tball has the beginnings of a key point.
What % of American-born NBA players prefer to live abroad for a few years?
How many Stanford-educated Josh Childress types are in the NBA, intrigued by new places, new foods, new cultures, etc?
Ironically, players who’d most benefit are least likely to make that choice: Telfair types with posse problems. Play in Greece for a few years, lose the albatross of hangers-on, develop a consistent trey, then return to USA.
GoldShammGold
July 24, 2008
Also see Steve Goldstein’s blurb about this deal at MarketWatch.com
Harold Almonte
July 24, 2008
NBA and NCAA have the monopoly of top proffesional and ( jump rules from amateur to pro ) basketball business in USA, and I think this blog has been long time saying that both leagues are using all kind of arguments and laws to darkly violate, or manipulate, the free market. Of course when a monopoly is not worldwide, but so it is the competition market, there will be ways in the end which will challenge it. The B. Jennings, and Childress revolutions will hurt in the end all those rules, because this mean that Europe can fight now for players that can be not only from 6th to 10th man, but probably starters, and differentlly to F. Vasquez or Splitter, grown in the system american boys.
JC
July 24, 2008
I wonder if the European experience with soccer makes European teams less prone to overvalue scoring than American teams. Just a thought.
Joe
July 24, 2008
Easy fix for the NBA in the next CBA – require that restricted free agents desirous of joining a team abroad give their NBA team 1 week to match the contract they received from an overseas basketball club. If they don’t do this, they can never play in the NBA. $LAM!
Harold Almonte
July 24, 2008
They don’t “overvalue” or “undervalue” anything, as a product of a statistical metric, as you infer (although they are more stricts with irresponsible assists boxscoring). If they are less prone to something on scoring, that is relying too much on one on one dribbling scoring plays, but that will change, since more athletical type players are arriving, and the 3p line (and other rules) be NBA standardized.
Joe
July 24, 2008
A critique of Wins Produced for all you WP fans out there:
There are almost too many counterarguments to the WP methodology to list here. In fact, since it has already been done so well, I will refer you to this topic at the APBRmetrics forum, where a lot of smart, analytically capable people tear into Berri’s work.
To this, I would only add a few specific criticisms: First, Berri’s model weighs rebounding extremely strongly–many would say he overweights the value of a rebound–and this leads to findings such as Dennis Rodman being more valuable (per-minute) than Michael Jordan. Findings such as these have been roundly criticized by essentially everyone, but I am willing to concede at least the theoretical possibility that they are true. My main problem is that the author’s typical response to such criticism has been to refer to the econometric work performed in his book and various articles, claiming objectivity–in other words, Berri is just the messenger, the numbers themselves reveal the actual truth, and the actual truth indicates Rodman > Jordan.
This, to me, appears to be a cop-out. (Be advised that I have not read Berri’s book or articles, seen his regression output, or attempted to replicate his results–as such, my critique should be taken with a large grain of salt.) Others have suggested that Berri’s work fails the “smell test,” as in, its results are so illegitimate as to seem suspicious. The term I would use is that Berri’s model lacks “face validity;” it does not appear to measure what it purports to measure.
Further, Berri’s deflection of responsibility to the regression seems somewhat delusory. It is well-known to almost anyone who has performed such analysis that regression models can be fit to support almost any conclusion. I could show you, for example, an example in which the mere inclusion or exclusion of an intercept term in a model changes the coefficients of the other predictors from insignificant to significant. It is not my intention to “pick a fight” with Berri’s analysis, because his work appears very thorough and reasonably well thought-out, and I have not read it. However, passing the buck of responsibility for his results to the regression itself seems somewhat disingenuous.
http://hardwoodparoxysm.blogspot.com/2008/07/statistical-primer.html
ilikeflowers
July 24, 2008
That’s the great thing about judging models based upon how well they predict the future (especially when the predictions go against the conventional wisdom), olfactory bulbs, flapping tongues, and other such foolishness are not required.
mrparker
July 24, 2008
Does this make Josh Childress the Curt Flood of the NBA? Will he be a guy that the NBA boy’s club hates for showing others the true variety of options out there. I believe that Childress is getting 20million tax and living expense free. Don’t greedy players dismiss the dream of winning NBA games all the time for the sake of a few extra million?
Secondly,
Why do the ABPRmetrics guys keep coming over here to post. Not only has Berri provided the numbers but he has provided the predictions to go along with them. This is not to say that all the questions are answered, but that I can’t find somewhere that answers them more throroughly at this time.
adeherre
July 24, 2008
So I didn’t realize that doing a ping back would to an excerpt from my post being posted in these comments. I’m going to disable that, sorry.
P. Ami
July 24, 2008
“exploit (i.e. pay workers less than the revenue the worker generates)”
I would like either an explanation of this idea or perhaps a rewording seeing that the concept, as written, seems pretty revolutionary. What team wants to or could pay a player what he is worth as defined by this sentence? If you paid players the revenue they generated then there would be no profit in it for the business owner. The argument made by many is that Micheal Jordan would have been worthless as a basketball player and as a pitchman if the NBA hadn’t marketed itself to the point where a Micheal Jordan could generate the sort of revenue he did.
One interesting point, a lockout today may very well do to the NBA much more damage then even the last strike did for MLB. With the sort of cable access one has today, with all the very good leagues in place, one can see NBA players doing something like what NHL players did during their lockout. I’m guessing we’ll see some interesting developments in the next CBA.
My respect for this sight is such that I assume the sentence was either badly worded or I am not understanding something of the concept. So, please respond.
ilikeflowers
July 24, 2008
P. Ami, type ‘exploited’ in the search box and then scroll down, there are a couple of older posts that deal with this concept more explicitly.
Evan
July 24, 2008
P Ami —
If you’d read Dave’s book, you’d know that strikes and lockouts have had little long term effect on revenue.
Jeremy
July 24, 2008
I gotta say, “Joe,” that is pretty weak, cutting and pasting from a blog and posting it on here. Berri knows exactly what he is doing, and has soooooo much to prove this. There is nothing but garbage on that hardwood paroxysm site, give me some charts, some data, some predictions. Until you show me that, you are a nobody, the complete opposite of DJ Berri.