A Focus on Dollars Could Help Memphis on the Court

Posted on November 5, 2009 by

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Last August the Memphis Grizzlies cut their scouting staff from five to zero.  Such a move was consistent with the notion that the folks in Memphis – specifically their owner Michael Heisley – “value dollars over wins.”

This view may have been bolstered this past week by the fact Rudy Gay and the Memphis Grizzlies failed to reach a deal, making Gay a restricted free agent in 2010.  Here are the latest numbers (from ESPN.com):

An NBA source said the Grizzlies’ final offer was a five-year deal worth about $50 million, according to the report, while Gay was seeking a deal similar to the five-year, $65 million extension the Portland Trail Blazers agreed to with LaMarcus Aldridge.

So Gay would like $13 million per season while the Grizzlies would like Gay to play for about $10 million.  If we think about the logic of the NBA’s free agent market [something we discussed in The Wages of Wins and in a published article in 2008], Gay’s demand is closer to his predicted market value.  So from that perspective, the offer from Memphis was below market value (i.e. too focused on dollars or “cheap”).

Of course, the market value–as often noted – is driven by scoring.  If we think about everything Gay does on the court, it looks like the offer made by Memphis was actually fairly extravagant.

Consider Gay’s statistics from 2008-09 (reported in Table One):

Table One: Rudy Gay in 2008-09

Last season Gay was about average with respect to shooting efficiency (from the field and line), blocked shots, and steals.  He was below average with respect to rebounds and turnovers.  About all he does well is take shots and avoid personal fouls.  Because he’s willing to take shots, though, Gay is above average as a scorer.  But his efficiency numbers suggest he’s not exceptional with respect to this aspect of the game.  And since he isn’t exceptional at anything else, we shouldn’t be surprised to learn Gay really doesn’t produce many wins. 

Here is what he has done across his first three seasons:

2006-07: 0.1 Wins Produced, 0.003 WP48 [Wins Produced per 48 minutes]

2007-08:  4.2 Wins Produced, 0.068 WP48

2008-09: 2.3 Wins Produced, 0.037 WP48

For his first three seasons, Gay has only produced 6.7 wins.  Let’s give Gay the benefit of the doubt and argue that going forward, his 2007-08 numbers – the best numbers he has posted thus far – will be his normal output.  If he had signed the offer made by Memphis, this means the Grizzlies would be paying $10 million per season for about 4 wins; or about $2.5 million per win.  Even if Gay played in a very large market, each win would not be worth $2.5 million.  In a small market like Memphis, such a price is far too high.  Yet this was the offer Memphis was willing to make.

And it looks like Memphis might be willing to pay even more.  From the same ESPN.com article we see the following:

“There’s no question we have a high appreciation for Rudy and his talent,” Heisley said, according to the report. “Now the question is how do you get to the right deal? If you’re asking me, am I willing to pay as much as I can possibly pay? No. That’s not appropriate in today’s financial climate.

“We’re going to make a very attractive offer to Rudy,” he added, according to the report. “We think he’s a great player. They think he’s a great player. We have a very high opinion of Rudy.”

Such a statement sounds like Memphis will make an effort to keep Gay next summer.  That will probably mean matching any offer Gay gets.  Once again, such an offer will probably be for much more than $10 million per season. 

So in the short-run, it looks like Memphis is making a good decision by not meeting Gay’s demands.  In the long-run, though, it looks like Memphis is very tempted to keep Gay around at a price that – relative to his productivity – is quite high. 

Of course it’s quite possible that Memphis really doesn’t want to pay Gay more than $10 million per season.  Although the reason for this is that Memphis is really cheap, in this instance, the focus on dollars over wins is going to result in a very good decision.  And not just for the team’s bottom line; but also for the team’s ability to compete on the court.

– DJ

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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

Wins Produced vs. Win Score

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.