One of my favorite websites is Cleaning the Glass, run by former Sixers VP of Basketball Strategy Ben Falk. That site produces a tremendous amount of quality content, from team previews to film breakdowns, front office insights, and new ways of viewing player stats. I highly recommend checking it out. I find myself agreeing with most of the analysis there, but there’s one article from a few months ago that’s been bugging me.
That article, titled “The NBA’s Balancing Act,” is described as follows:
Curing what ails the modern NBA – from tanking to superteams – requires changing the rules of the CBA. A proposal for what that would look like.
Since the CBA and league governance issues are a primary focus of this site, I thought it might make sense to review that article here—particularly explaining why I believe the authors’ proposal would harm rather than help the league’s competitive landscape—while also offering a counterproposal to foster a more competitive league.
Today’s post, Part 1, contains my review of the Cleaning the Glass article. My counterproposal appears in Part 2.
A Summary of ‘Balancing Act’
To begin, let’s identify how authors Ben Falk and Jordan Brenner framed their competitive balance concerns and what they proposed in response.
Mainly, I’d say that their concerns are the following: (1) the same teams are consistently at the top of the league while most are left choosing between tanking and the “treadmill of mediocrity;” and (2) there are too few paths available to turn a “have-not” (non-contender) into a “have” (contender), most of which require lucking into drafting a star player.
Their plan to alleviate these problems is separated into a “dream” scenario and a “realistic” scenario, though the differences are relatively minor. They essentially offer a strong and somewhat weaker version of the same essential blueprint, which is to (1) eliminate the individual player max salary, and (2) eliminate the draft.
In the less radical form of the proposal, teams are limited to only one player who can be paid above the conventional (perhaps slightly lowered) max salary, with existing salary cap rules otherwise remaining in effect. Accordingly, star players would be confronted with more significant tradeoffs between contract value (money) and teammate quality (winning). The authors explain how such a change could break up a superteam like the Warriors:
If this system had been in place over the previous few years, the Warriors would have been able to go above the max salary for either Steph Curry or Kevin Durant, but not for both. One or the other would have needed to take an enormous pay-cut to play together. Meanwhile, Klay Thompson and Draymond Green may have been offered contracts by other teams that were much larger than the Warriors could pay them. Again, they could have stayed together, but they would have had to leave a lot of money on the table. The above-max exception would give other teams real advantages in luring stars away.
Concerning the draft, the strong version of the proposal eliminates it entirely, whereas the weaker version maintains the existence of a draft but greatly diminishes its viability as a team-building strategy. Draftees would become unrestricted free agents after three years. According to the authors, “these changes would reduce the value of draft picks in general, which could help curtail tanking. Teams might still view the draft as the easiest way to acquire a star player, but if the franchise isn’t good enough (either on or off the court) he is unlikely to stay.”
The authors also propose allowing larger incentive clauses in contracts, though I don’t see this change having any significant effect on competition so I will not address it further.
Why Their Proposal would Harm Competition
In simplest terms, the proposal set forth above would cripple franchises in less desirable markets, leaving them effectively unable to compete with teams located in more glamorous destinations like Los Angeles, Miami, and New York. The authors propose a system that would make free agency the dominant method of roster construction and render the draft comparatively inconsequential with respect to building a contender. In doing so, they argue that such a shift would “give as many teams [as possible] a chance to compete as often as possible.” Yet the idea that such a system would create more equal footing to field a contender is substantially at odds with past experience.
(1) The Proposal Results in Fewer Paths to Success, Not More
Currently there are three general methods by which teams can reach contender status: (i) the draft, (ii) trades, and (iii) free agency. Contender-quality teams in recent years have relied on all three.
It’s true that lucking into top picks in the draft lottery has been the most common way to build a contender, but it’s far from the only way. San Antonio, Oklahoma City, Cleveland, Chicago, and Orlando all benefitted from favorable bounces of the ping pong balls to get stars at the top of the draft. The Warriors, however, won their first title and built a 70-win team by drafting phenomenally well without any top-5 picks. Houston, Toronto, and Boston acquired superstars through trade. Miami, of course, built a superteam via free agency, while the Lakers utilized all 3 methods to acquire their star players.
For each of the teams that built contenders by trade, the considerable value of draft picks and young players on rookie contracts enabled such trades. Houston, for example, was able to obtain James Harden because the Thunder valued the draft assets Houston had accumulated—a recent lottery pick (Jeremy Lamb), two future 1st rounders (one of which became Steven Adams), and a high 2nd rounder.
This is a familiar scenario. Toronto previously traded that Steven Adams pick to Houston for Kyle Lowry and then gave up a high-performing recent top-10 draftee (Jakob Poeltl) and a future 1st in the Kawhi deal. The Celtics got Kevin Garnett for a promising young starter on a rookie deal (Al Jefferson), a future high 1st rounder and another 1st. They traded the 5th pick in the draft to acquire Ray Allen. More recently, the Celtics got Kyrie Irving largely based on the value of an unprotected Nets pick.
The trade method is really the asset accumulation method, which is extremely dependent on the current high value of draft picks and players on rookie deals. No one trades a superstar principally for veteran role players on market contracts. So by fundamentally depressing the value of draft picks and players on rookie deals, the authors’ proposal also substantially limits teams’ ability to acquire stars via trade.
From 3 methods to build a contender, we would be left principally with a single method: free agency. The authors assert that expanded free agency would actually give franchises more paths to success, but I struggle to see how this is true. Every path they identify (stars and scrubs, a balanced starting five, youth movement, aging vets taking a discount to play together) already exists.
So the argument is not really that franchises will have more paths to success, because they plainly will have fewer. Rather, in essence, the authors are arguing that teams will be better positioned to leverage certain existing paths and resources to build a contender, or in other words, have greater upward mobility and control over their own competitive destiny. On this point, I vehemently disagree.
(2) Elevating Free Agency Over the Draft Deepens Competitive Imbalance
One of the best aspects of the NBA is that its draft serves as an equalizer. Looking at the past decade, every team has been represented in the All-Star game by a player it drafted (or traded for the draft rights to). Also, with the draft being so instrumental to team-building, there’s been no apparent relationship between the desirability of a franchise’s market and its on-court success. San Antonio, Oklahoma City, and Golden State became perennial contenders by drafting future stars and, for the most part, retaining them for 7+ years via advantageous CBA provisions. The draft, coupled with the 4-year rookie scale and restricted free agency, generally allows a team in any market to obtain and keep a coveted player for roughly the first half of his career. Under this framework, teams that make the best decisions with their draft selections tend to be the most successful.
Though the authors assert that there is a clear division between haves and have-nots, that really isn’t true over any length of time longer than a few years. Sure, the Spurs have been consistently good for a long time while the Kings haven’t made the playoffs in the past decade, but there’s no structural reason why certain teams are successful and others not. Many franchises have cycled between contender and non-contender in the past decade. The Warriors were arguably the least successful franchise in the league over a 15-year span, until they became the most successful one over the past 5 years. A majority of franchises—17 out of 30—have made the Conference Finals in the past 10 years.
And while it’s true that top picks in the draft are much more likely to become stars—roughly half of All-NBA selections are former top-5 picks—there are still lots of stars taken later on. The Bucks, Jazz, and Nuggets all recently turned their fortunes around by drafting stars with picks outside the top 10.
Free agency, on the other hand, is not a remotely equal playing field. Teams in small markets often find it difficult to sign starter-level players even when offering a substantial premium. Players’ extreme preference for certain markets, and reluctance to play in others, creates an environment where star free agents refuse to even talk to teams in less desirable markets.
All-NBA players don’t switch teams very often, but when they choose a new destination via free agency or trade demand, they almost always choose from a small subset of markets. Kareem, Shaq, and LeBron (most recently) opted to play in LA; Chris Bosh and LeBron (previously) teamed up in Miami; and Carmelo and Amare made their way to NY. Chris Paul demanded a trade to either LA or NY, and right now Jimmy Butler is seeking a trade to LA, Miami, or NY. Kevin Durant bucked the trend a bit by going to Golden State, though that’s (a) a desirable market in its own right since the rise of Silicon Valley and (b) his obvious best option to win titles when he made that choice.
Historically, free agency is not a path to success for the vast majority of franchises, nor is it a remotely fair competition. Even if you want to attribute drafting and developing stars mostly to luck, at least it’s equal-opportunity luck. A focus on free agency would entrench the haves and have-nots much more predictably by market desirability.
(3) Eliminating the Individual Max will further Disadvantage Small Market Teams
The authors argue that eliminating the individual player max while maintaining the cap would give any team hoarding cap space a leg up, facilitating superstar movement to all markets and preventing or breaking up superteams, but I find this argument much more theoretical than reality-based. In theory, we might expect all players to be similarly motivated to earn the highest possible salary. In reality, the very best players are much less motivated by salary, for a couple reasons: (1) the better you are, the more your individual legacy and brand matter; and (2) the better you are, the more outside sources of revenue you typically have.
There is no better case study for this phenomenon than Tom Brady and the Patriots. The NFL already has a system with a team cap and no individual player max, as advocated in the authors’ proposal, yet the NFL’s best player over the past decade often has earned a middling salary at his position. Moreover, despite the NFL being less conducive to superteams than the NBA, the Patriots have been the most dominant franchise in American pro sports over that time. The Patriots have led the NFL in point differential 7 of the past 14 years, and most other years they’ve finished in the top 4. They’ve also played in 8 Super Bowls and 12 AFC Championship games during the Brady era.
Tom Brady certainly could demand a higher salary, but he’d rather keep maximizing his chances of winning, building his legacy and personal brand. Between Brady’s endorsement money, business interests, and wife Gisele’s earnings, he’s probably not too concerned about his NFL paycheck.
The highest paid players in the NFL include a bunch of unexceptional quarterbacks like Kirk Cousins, Matthew Stafford, Derek Carr, Alex Smith, Joe Flacco, and Jimmy Garoppolo. Given their lack of outside earnings and lesser concern for personal legacy, these players naturally prioritize maximizing salary more than a player like Brady, and they’re able to leverage the scarcity of talent at their position to do so.
Compared to theoretical profit-maximizing behavior, I think the NFL example and observed NBA free agency history provide a better gauge of what would happen if the NBA eliminated the individual player max. Fringe All-Stars and underperforming young players with strong draft pedigrees could leverage the paucity of free agent options for small market teams into above-max salaries, while MVP contenders would continue to prioritize winning and market desirability to build their brand.
LeBron and Durant in particular have previously chosen to take less money in free agency, and I see no reason to believe that the prospect of leaving more money on the table would meaningfully alter their decision-making processes. NBA superstars like them make tens of millions of dollars annually in endorsement income, rendering just about any conceivable difference between the standard max and an above-max deal relatively unimportant.
Even given an extreme salary difference, competitive factors strongly disfavor signing a massively above-max deal. If Durant decided to sign for a majority of the cap somewhere, he’d do so knowing that his team will be at a major disadvantage trying to build around him. This is an existing concern for small-market teams like the Bucks, as agents and reporters speculate that a Supermax offer won’t keep Giannis in Milwaukee if market factors seem to prevent them from becoming a contender. An even greater individual salary against the cap would exacerbate such concerns.
Meanwhile, in a league where free agency is the dominant avenue of roster construction, teams in glamour markets can be more selective about the players they pursue in free agency and how much they offer, knowing that market conditions will be favorable for them. If anything, I think that a shift to more stars becoming unrestricted free agents sooner will lead to more superteams, not less, irrespective of eliminating the individual player max. And those superteams will inevitably form in the most desirable markets, while teams in lesser markets will be left behind.
(4) The Proposal Should Reduce Tanking But Broaden the “Treadmill of Mediocrity”
I agree with the authors that tanking is a major concern, and it’s something I’ve discussed here previously. In my view, tanking is much more of a problem for the league than the presence of one or more superteams. Great teams are fun to watch. Teams that are bad and have no short-term organizational interest in winning are depressing to watch. Being a fan of a franchise that would rather lose than win is painful.
In terms of reducing the incentive to tank, I find that the authors’ proposal is successful. Draft picks will be less valuable, so teams should be less inclined to purposefully lose in an effort to gain better picks. That’s a worthwhile objective accomplished.
Yet losing would still be at least somewhat preferable to winning from a draft standpoint, and there are other unintended effects of the proposed system that may keep the level of play down among lesser teams. For one, a heightened focus on free agency should cause more teams to gut their rosters in order to maximize cap space. They won’t be actively trying to lose, but the effect may be similar.
Second, I think that the authors’ proposal would expand NBA purgatory, or what the authors term the “treadmill of mediocrity,” to cover a wide swath of the league. In the NBA context, the term ‘purgatory’ essentially refers to teams that want to win but have no plausible hope of contention in the foreseeable future. It’s typically used to describe teams that project to win 30-50 games with their existing core and that reside in a lesser market or have a bad cap situation. They’re unlikely to be bad enough to get a top draft pick, and they can’t expect to land a star in free agency. If the draft ceases to be an effective method of team-building, quite a few franchises can expect to be stuck in purgatory.
Particular non-playoff teams may try harder to win in order to convince free agents they’re not hopeless, but many franchises persistently will be at a disadvantage in free agency based on their market alone. They’ll always struggle to land good players regardless of their cap situation. These teams may compete for a playoff spot, unlike teams that tank, but they’re not exactly in a promising situation either. If the goal is to move away from a system that divides teams into haves and have-nots, I don’t see how the proposed system is an improvement.
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