Building a winner in the NBA isn’t easy, but it can be done.
In my Utah Jazz article a few weeks ago, I was critical of the team’s decision to give large extensions to Gordon Hayward and Derrick Favors, arguing that Utah was running the risk of paying top dollar for marginal talent. At the same time, I understand why the Jazz have gone to those lengths to keep their young guys. Utah scouted them, they acquired them, and, most importantly, they have invested heavily in their development. Utah didn’t want that investment to go to waste, especially if they weren’t getting anything in return, so they decided to keep them around even if it meant risking future financial flexibility.
But some questions still remain: Are those contracts really in the best interests of the franchise? And what would be the best way to rebuild the Utah Jazz, or any franchise for that matter? In examining Utah’s dilemma and the NBA as a whole, I realized that there has to be an answer somewhere.
Before going any further, it is important to acknowledge that all franchises start on a somewhat level playing field because every team has to abide by the CBA and the salary cap. For a team to be considered great, it must make the most of its resources, or at least get more out of their resources than other teams. In other words, a team needs to generate as much on-the-court value as possible while, at the same time, not overspending for that value.
It’s also worth noting that there are many other factors that play into building a competitive team that I have glossed over or omitted altogether,but many of those factors are hard to quantify. It’s hard to put a number on the value of the Indiana Pacers’ scouting department when they nailed the 2010 draft or Gregg Popovich’s coaching mastery and innovation in San Antonio or Phoenix’s legendary training staff, but rest assured, they have had an incalculable impact on their respective franchises.
Anyway, the most obvious way to find additional on-the-court worth is to acquire a superstar because they bring so much value to the table.This is easier said than done, of course, but there is a reason that the NBA is often referred to as a “superstar league”. According to Nate Silver, elite players can generate up to $40 million of on-the-court value, way below the NBA’s max contract scale, and that’s not even taking into account the off-the-court value that a superstar can bring to a franchise (jersey sales, marketing opportunities, etc.).
The king (no pun intended) of the superstars right now is obviously LeBron James, and he will be making around $21.5 million next year in Cleveland. Doing simple math using Silver’s figure, LeBron will be generating $18.5 million in excess value for the Cavs next year, and that estimate might still be a little on the low side. Going further, Bill Simmons mentioned in a column last year that LeBron would be worth $75 million dollars ($53.5 million of total additional value) on the open market if the NBA operated without a salary cap or luxury tax system. That’s scary.
Unfortunately, acquiring a star via free agency isn’t realistic for a lot of teams, because for the most part stars choose to play for bigger markets, which gives these teams even more of a leg up on the rest of the competition. Even if a team like the Jazz had the cap space to replace Favors and Hayward with elite players, they would be hard-pressed to sign them because not many would want to play in Salt Lake City when New York and Los Angeles come calling with competing offers (Nothing against SLC, by the way. I’ve heard it’s nice.). Of course, LeBron going back to Cleveland was a big exception to this rule, but there were obviously a lot of outside factors that played in that decision.
Additionally, big markets tend to have the advantage of being able to dip into the luxury tax to keep existing players if necessary,which is a “luxury” that small-market teams can’t afford. This kind of conflicts with the “level playing field” rule above, but the tax money does get divided up among non-tax paying teams, so there shouldn’t really be much complaining. There is also an advantage for teams with cap space who have existing stars already on their roster that can recruit other stars. The Big Three in Miami probably doesn’t come together if Dwyane Wade doesn’t build strong relationships with Lebron and Chris Bosh, and the same could be said about Paul Pierce and his role in bringing Ray Allen and Kevin Garnett to Boston (although Pat Riley and Danny Ainge did most of the heavy lifting in those scenarios).
But Utah doesn’t have the financial means to go into the tax, and they don’t have a big star on their roster, so they have to look elsewhere to find valuable players: the draft. The draft is great for small-market teams on the rebuild. They can pick the players they want, they don’t have to fight other teams to sign those players and they can ink those players to affordable rookie-scale contracts. In fact, assuming that the front office and scouting department is doing their jobs, drafted players should almost always generate a generous amount of basketball value. There is also the added benefit of being able to spend four years developing your players and finding out just how high their ceilings are.
The problem with the draft is that it is essentially a crapshoot. There is no guarantee that the player you draft will become a key contributor, and there is certainly no guarantee that the player will become a superstar. At the end of the day, you could end up with a couple of fine basketball players who justify their roster spots but don’t really bring you any closer to a title.
This describes where the Jazz are at right now as a franchise. The Jazz have drafted solid young players over the past couple of years (Hayward, Trey Burke, Enes Kanter, Alec Burks) who have generated some, albeit minimal, extra value, but they haven’t yet found their superstar to generate maximum worth. Maybe Hayward or Favors becomes that guy or maybe it’s Dante Exum, but right now, they need someone who brings some more value to the table at a reasonable price.
As we already know, building a contender isn’t easy, which is why a lot of franchises struggle to find consistent success year in and year out. To build a winner, sometimes you have to make decisions that challenge conventional wisdom. The status quo of the NBA is to keep your young player when he hits restricted free agency, even if it means paying him too much. It’s what the Jazz did with Favors and Hayward. It’s what the Pacers did with Roy Hibbert. It’s what the Warriors will probably do with Klay Thompson. In doing this, teams are basically holding themselves back — shackling themselves to bloated, long-term contracts and players who may struggle to meet those lofty expectations.
For right now, it looks like the Jazz are stuck in basketball purgatory until this contract situation is resolved. They do have a lot of young talent, and they could possibly swing a deal to bring in someone to help push for a playoff spot (wishful thinking, perhaps), although they will most likely wait to see how next season develops before exploring that possibility. The Jazz, however, do appear to have pigeonholed themselves going forward with Hayward’s and Favors’s contracts, paying top-dollar for two players who don’t bring much surplus value to the table.
Long story short - don’t overpay or give out long-term deals to players unless you can be sure that they will bring additional value to your squad greater than their proposed contracts. Try to acquire a superstar at all costs, even if it means trading young, cost-controlled players and assets or letting them leave in restricted free agency. Big markets have an advantage at getting a star player, but rebuilding teams in all markets should use the draft and focus on acquiring young assets and creating cap space in the hopes of one day signing or trading for a franchise player. Small markets are at a fundamental disadvantage, but smart teams should be able to invest in other areas (innovative coaching, effective management, etc.) and use the draft to collect assets. If they get a little lucky, they might draft a superstar for themselves, effectively creating maximum value at a minimum price.
Edited by Michael Tony.
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