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Stern's Misguided View of Competitive Balance

Competitive balance. I haven't quite decided if this is just a red herring in the league's fairly straightforward quest to wring money out of the union, or if David Stern and Adam Silver are sincere in their misguided belief that their salary cap wish list will result in a significantly more competitive league.

As many others have pointed out, the NBA is not the NFL. There are several factors that allow for more competitive balance in the NFL (or something that masquerades as competitive balance, at any rate) and I'm not convinced that the salary cap is in the top 10. For one thing, an NFL roster is 45 (53 including inactive players) while that number in the NBA is 12 (and 15). More importantly, there are 24 "starters" in the NFL (counting a punter and a placekicker) compared to 5 in the NBA - the point is, one player can have a much more significant impact in the NBA than in the NFL just by sheer numbers (Peyton Manning notwithstanding).

There's a second numbers game at work here as well - with only 16 games in the regular season and a single elimination playoff format, of course you're going to have more variance in your eventual champion than with an 82 game season and best of seven playoff series. Bernoulli tells us that if Team A is better than Team B and has a 60% chance of winning any meeting between the two, then Team B still has a 40% chance of winning a single playoff game. But Team B's chances of winning four games in a seven game series drop to less than 29%. And of course this difference is compounded through multiple playoff rounds - that 40/60 underdog is almost three times as likely to advance through three rounds of a single elimination playoff than to make it that far through multiple best of seven series. Simple randomness would dictate that there would be a wider variety of winners in the NFL playoffs based strictly on format. If the end game is to have a wider variety of teams winning NBA championships, Stern can shorten the season and play one and done playoffs. Heck, I seem to recall Philadelphia winning game one of the Finals against a far superior Lakers team back in 2001. Of course the Lakers came back to win the next four, because they were the better team, but a single game Finals that year would have given us a different NBA champ - yay competitive balance!

I'm not going to suggest that money has nothing to do with winning in the NBA - there is clearly some correlation. The last four NBA champions have been at least $7 Million over the luxury tax threshold, after all. But we always have to remember that correlation does not equal causation. And it seems fairly obvious that there are confounding variables here, at least one of which is far more important than spending money.

From Howard Beck's recent article on the subject in the New York Times:

Over the last six years, the life of the previous labor deal, the 10 highest-spending teams averaged 48 wins a season. The 10 lowest spenders averaged 34 wins. The gap was more stark last season, with the top 10 spenders averaging 50 wins and the bottom 10 averaging 32.

But back to that correlation-causation conundrum, are teams winning because they spend, or are they spending because they win?

The NBA is a superstar-driven league.  And while the last four NBA champs all had a luxury tax bill, they also had something more important - an MVP on their roster. In fact, for 20 of the last 21 seasons in the NBA, the champion has had an in their prime MVP on the team - only the 2004 Pistons managed to win a ring without one.

Moreover, three-fourths of those title teams had superstar players they actually drafted - only the Celtics (Kevin Garnett), the Heat (Shaquille O'Neal) and the Lakers (O'Neal again) acquired their MVP level talent via trade or free agency; of course those guys were matched with some pretty solid home grown talent in Paul Pierce, Dwyane Wade and Kobe Bryant.

NBA General Managers are not all as dumb as they are sometimes portrayed. They know what wins in the NBA. You can make the playoffs, maybe even win a series or two, with a team of solid players. But if you hope to win it all, you have to have that next level guy, that super-maga-star, first team all NBA, legit MVP candidate in his prime. And if you don't have that, you might as well still be rebuilding.

But if you do have that guy, then you do what you can to put the team around him that will allow you to make a title run. So yes, the Lakers have won titles and have spent money to do so - but they also had Kobe Bryant on their roster, so they knew they had a chance to win.

And here's where Stern is really missing the boat - in a star driven league, where the indispensable element to a championship team is the individual player as opposed to the collective or the system, you actually want a salary system in place that allows teams the flexibility to spend more when they are in a position to win. The San Antonio Spurs play in one of the smallest markets in the NBA, but they were blessed with two can't miss first overall picks ten years apart. Knowing that they had a team that could compete for a championship, the Spurs have chosen to pay the luxury tax three times in the seven seasons it's been in place in order to keep the core of their team together as long as they have a chance to win. Stern and others like to point to the Lakers and the Mavericks as what is wrong with the current system - without acknowledging that a hard cap system would have long ago broken up Duncan, Ginobili and Parker. Is that really what the NBA needs?

And what of the current darlings of the NBA, the Oklahoma City Thunder? Another small market team, they are often presented as a franchise that rebuilt the right way. There's much uncertainty as to whether the Thunder will be able to afford to keep their core together - they've already got $21M tied up in Kevin Durant and Kendrick Perkins, with Russell Westbrook poised for free agency in a year, and James Harden and Serge Ibaka the year after that. A hard cap would eliminate that uncertainty - it would be a given that they could not possibly keep all five of those players. Is that what Clay Bennett wants? Is that what David Stern wants? Under the current system, Bennett would have the option of exceeding the cap, at least for a time, to chase a ring.

This is why Stern's go to competitive imbalance example, "the Lakers spend twice as much as the Kings" is so disingenuous. As Tom Ziller has repeatedly pointed out, the Kings' salary was $45M last season because there was absolutely no reason for it to be any higher. The Kings are rebuilding, and with 2010 Rookie of the Year Tyreke Evans along with the most talented center to enter the NBA in some time DeMarcus Cousins, who's to say that the Kings aren't the next Thunder? If Evans and Cousins turn out to be great, let's wait and see what the Kings' team salary looks like when they re-sign them both before we decree that the current system is hopelessly broken.

Of course what would help all of this, no matter how you approach it, is more and better revenue sharing. If the Lakers shared more of their embarrassment of LA market riches with the Thunder, then we probably wouldn't have to wonder whether Westbrook and Harden and Ibaka were going to be in Oklahoma in 2013 - of course they would, because who in their right mind would break up that team if it were economically viable to keep it together?

Some things are broken, that much is true. The Mavericks have been above the salary cap every season of it's existence. Mark Cuban finally got his ring last season, but clearly the intent was not to create a system where some owners simply exist at a different salary level on an ongoing basis. Meanwhile, in an irony so stunning that it single-handedly calls into question the entire premise of money buying wins, the Knicks had nine consecutive losing seasons while spending more than any other team, before posting a winning record last season when they dropped below the luxury tax threshold for the first time ever - a perfectly inverse relationship between money and wins in New York for an entire decade. As I've argued before, I would be all for an aggressive luxury tax that increases based on seasons spent above the threshold - but I feel it remains in the interest of the league to allow teams to exceed the threshold as easily as they do today for a season or two at a time.

You may be interested to know that in the seven seasons in which a luxury tax has been applicable, 21 out of 30 NBA teams - more than two-thirds - have taken advantage of it's existence at least once. Only four teams - the Mavericks, Knicks, Lakers and Celtics - could really be said to be abusing it, exceeding the threshold five or more times each. That leaves 17 teams that have exceeded the luxury tax between one and three times since it was instituted - including cap hawks Dan Gilbert (three times) and Robert Sarver (three times). (Apparently the opportunity to spend a little more was a good thing when it meant trying to keep LeBron James happy or searching for that final championship piece to the puzzle.)

And what of the nine teams that have never been above the tax threshold? Well, with the exception of the Hornets and Chris Paul (and let's face it, New Orleans is a special case not least because they are now owned by the league), none of them have had a first team All-NBA player beyond his rookie deal. In other words, there has not been a reason to spend, because there hasn't been a superstar to build around. Market size does not seem to be a major factor in willingness to spend - big market teams like the Bulls, Hawks, Wizards, Warriors and Clippers have never paid the luxury tax, while Utah, San Antonio and Orlando all have.

We might assume that if the system remains more or less as is, the Derrick Rose Bulls and Kevin Durant Thunder would start paying the tax in the near future - maybe even the Blake Griffin Clippers. Because money alone doesn't buy championships, but it does help once you have a superstar to build around.