Dan Rosenbaum's NBA Blog

It has been awhile since I have posted

2005-10-31T17:00:00.000-05:00

I very much regret not having posted anything on this blog for more than two months and have started to get some questions of whether or not I have fallen off the face of the earth. Mostly my lack of activity has been due to a heavy teaching load this Fall (teaching fabulous MA/Ph.D students), along with a baby boy. But that is only part of the story. I also have been talking with a team - a team that will remain nameless for now - and it looks like I might be doing some consulting.

I am very excited about this potential opportunity; it is something just a couple years ago (when I was arguing on message boards) that I never would have dreamed would be possible. I will not go into detail (publicly or privately) about precisely what my responsibilities might be for this team, but I really like the team this organization is putting together both on and off the floor. The general manager has a refreshing combination of sincerity, vision, and humility that makes it hard not to pull for the guy. And from what I can tell, the coaching and front office staff are open enough to new ideas that I am confident that they would be able to make good use of any skills that I may have. (Although probably not my point guard non-skills.)

So I likely will be scaling back (almost entirely) my involvement on message boards, web sites, and my blog. Those of you who remember me posting a http://www.basketballboards.net or http://www.realgm.com may remember my strong stance against those who posted "inside" information. Thus, if this works out, you will not see much of me out on the web, except for perhaps at http://sonicscentral.com/apbrmetrics/.

And, for the most part, I likely will try to limit my involvment with the press. There is a tendency to want to retell the Moneyball story and I don't want press clippings about me to take credit away from more deserving decision-makers. I have a lot to learn about the NBA and basketball in general. I am not looking to be Paul DePodesta or Theo Epstein. I just want to play a role and help the team. So if this team plays well this season or in future seasons, please do not overestimate my role. The vast majority of the reasons for this team's success predate my involvement.

Last updated: 5:00 PM, October 31, 2005

An Offer to House Katrina Evacuees

2005-09-01T15:00:00.000-04:00

By Dan T. Rosenbaum

This is isn't about the NBA, but I was hoping that maybe one of the folks who read my blog might be able to help with this.

With the devastation due to Katrina and the tens (if not hundreds) of thousands of evacuees, my wife and I would like to offer our home to house a family. We are not rich, but we a large guest bedroom that would comfortably fit a family of three (maybe four). We have a five month-old so we would be pretty well set-up to house an infant, if need be.

It is looking like it might be months before people are able to go back to New Orleans and some of the other affected areas, and we would hope that living in a home (rather than a shelter) might give folks some sense of normalcy. Also, we can offer some assistance if the refugee family needs to be flown here to Greensboro.

Please e-mail me (available here) if you can provide any assistance on this. And if anyone else sees this post and realizes that they may be able to make a similar offer, that would be great.

Here are some sites where you can do just that.

Please help in posting these links.

August 31, 2005

Using statistics in basketball: the bar is higher

2005-08-29T04:00:00.000-04:00

By Dan T. Rosenbaum

David Leonhardt in his Sunday New York Times "Keeping Score" column has been a pioneer in describing the ways in which statistical analysis has affected sports. (He writes about economics during the week, so, of course, everything he writes is gospel.) This week David writes that baseball "has found itself in the equivalent of a theological dispute about whether [it] is a game of mystery or of data, of statistics and analysis or of intuition and human instinct."

David points out while teams using statistical analysis, such as Oakland and Boston, have achieved a great deal, there is no denying the success of "traditionalist" teams, such as Atlanta and St. Louis. The article is fairly even-handed, but this passage appears to betray the author's feelings.

"Academic research, however, is pretty much on the side of statistics. Whether diagnosing patients or evaluating job candidates, human beings vastly overestimate their ability to make judgments, research shows. Numbers and analysis almost always make people better.
'There have been hundreds of papers on subjects from picking students for a school to predicting the survival of cancer patients,' said Richard Thaler, a University of Chicago economist who uses sports examples in his class on decision-making. When a computer model is given the same information as an expert, the model almost always comes out on top, Thaler said."

This last sentence begs the question, however, because traditionalists would argue that the "computer model" never has the "same information" as the scout or coach. And they would be right. The real question is whether the benefits of more data (often collected and analyzed in a more objective manner) outweighs the costs of a simplified model that necessarily ignores some aspects of reality. Thaler argues above that in most circumstances the answer appears to be yes. And in baseball, I believe the argument in most cases is yes.

But in basketball, I am not so sure. Recently, I received an e-mail from a friend who argues that "basketball stats are a really interesting challenge."

"There's a sense in which [basketball stats are] much more related to economics than baseball stats are, which I always found a bit boring although incredibly accurate and powerful as a game predictor. Baseball is mostly about a small number of repetitive hand/eye coordination tasks, while basketball involves constant maximizing interaction between optimizing actors on the court."

Tabulating statistics may very well be the best way to form predictions about the "repetitive hand/eye coordinating tasks" of baseball, but applying those same techniques to the game of basketball which "involves constant maximizing interaction between optimizing actors" may not prove to be as useful. The costs of a simplified model may be too high.

But do not interpret me to be saying that statistical analysis has no place in basketball. Instead the point I am trying to make is that basketball people are right to be skeptical of statistical analysis, because analyses based upon an overly simple model of the game of basketball often can be more misleading than useful.

A good example of this is the "possession usage vs. offensive efficiency" debate over at APBRmetrics. Dean Oliver, author of Basketball on Paper and consultant for the Seattle Supersonics, makes the following argument.

"Implying that all these high percentage, low usage shooters can ramp up their usage without penalty implies that the people running the NBA are not just a little wrong. It implies also that the fundamental nature of basketball is poorly understood. It implies that any sort of linear weights rating is wrong. . . .
It implies that pretty much every rating method is wrong, because the context in which players are being used is incorrect. [Dan Rosenbaum's] method, which is totally different from others here, has to be wrong because it is flawed by the decision to not let Fred Hoiberg shoot 25 [times] per game. This is not just a matter of a tiny little assumption that has to be proven. This is a principle that really underlies the game of basketball. It very much distinguishes it from baseball, where players take turns being on offense."

This argument by Dean highlights how important a solid understanding of the game of basketball is to good statistical analysis in basketball. But a solid understanding of statistics - perhaps moreso than what is necessary in baseball - is also critical in making the right judgments when using basketball statistics.

I have heard reports of a Western Conference general manager that is heavily using basic unadjusted plus/minus data in his evaluation of free agent acquisitions. I probably understand the nuances of working with plus/minus data about as well as anyone, and I am one of the biggest advocates for plus/minus data. But I shudder when I hear about this general manager.

It is easy to misinterpret what can be learned from plus/minus data, and I see mistaken analyses using these data more often than not. Teams do not play their players randomly. Match-ups matter. Roles matter. And trying to isolate the contribution of a player or two when ten players are on the floor at a time is a tough statistical feat. Hearing a general manager without extensive experience with statistical analysis is making heavy use of these data sounds to me like a recipe for disaster. Without a strong understanding of statistics, as well as a strong understanding of basketball, it is just too easy for statistics to be more misleading than useful.

Another example is Dallas who has for several years made use of adjusted plus/minus ratings in their coaching/front office decisions. And the consultants who do this work for the Mavericks - Wayne Winston and Jeff Sagarin - are unquestionably skilled data analysts. But they have never interacted much with the wider basketball statistics community, and I think this has made it more difficult for them to place their work in the proper perspective. (I cannot begin to describe how the APBRmetrics community has been influential in my thinking.)

In addition, my understanding is that these adjusted plus/minus ratings are largely treated as "raw data" and the coaches/front office are pretty much left to their own devices in interpreting/analyzing the data. This, in my opinion, is a huge mistake, which very well could result in very useful data produced by skilled analysts being more misleading than helpful for the Dallas coaches/front office.

Given all of this, I think it is very much an open question how useful statistical analysis can be in basketball decision-making. Done poorly, I think it can hurt teams. Done well, I think it can be a valuable asset. My sentiments are summed up pretty well in this passage by NickS at APBRmetrics.

"The reason to use stats in any field is because humans are poor at evaluating probability. We tend to see patterns where there aren't, overestimate the probability of low frequency events and, most importantly, have a tendency towards comfirmation bias -- looking for evidence that confirm our preexisting beliefs.
One of the things that's said in defense of stats in baseball is that you can't tell the difference between a .260 hitter and a .280 hitter by watching one game or one series. The difference amounts to one extra hit every 2 weeks. Similarly is there any way to tell just by watching whether Eddy Curry is more or less prone to turnovers than Yao Ming?
Similarly I think that one of the best uses of stats is to provoke questions and try to map out ways in which questions can be answered. How can we tell if a team is shooting 'too many' or 'too few' three-pointers? Do shot-blockers have an 'intimidation' effect? How valuable are 'scoring' point guards compared to 'traditional' point guards? Are specialists more or less valuable than generalists? How valuable is it to have guards who can rebound or big men who can pass? What separates a good shooter from a great shooter? Stats can't answer all of those questions but they can rule out some wrong answers that have intuitive appeal and focus attention on possibilities that are more likely to be correct."

Statistical analysis can play a critical role in basketball decision-making, but it can also be misleading if the complexities of the game of basketball (and the statistical issues generated by those complexities) are not well understood. In other words, the bar is higher for statistical analysis in basketball than it is in baseball. Ultimately this will greatly benefit the teams that incorporate skilled statistical analysts in the right way, because the greater complexities in basketball will mean that it will be harder for other teams to ever catch up with the first teams that get this right. It will be fascinating seeing how this all plays out over the next few years.

Last updated: 4:00 AM, August 29, 2005

A Mea Culpa by Mark Cuban

2005-08-17T13:37:00.000-04:00

By Dan T. Rosenbaum

Mark Cuban in his blog presents a fascinating discussion of how the financial realities of the NBA, along with his misunderstandings of these realities, eventually resulted in him waiving one of his best friends - Michael Finley. This blog entry should be required reading for every NBA front office executive. It is a textbook example of why teams need more than a "capologist" who understands the ins and outs of the collective bargaining agreement. Teams need to understand how the details of collective bargaining agreement, trends in revenue across the league, and the structure of team salaries and player contracts will come together to form a market for trades and free agency. Seeing how that market will develop and how it can be exploited is worth millions (if not tens of millions) to teams.

I have had the good fortune of having dozens (and maybe hundreds) of e-mail exchanges with Mark over the years, as well as meeting him for lunch last Spring. He is a very impressive person - friendly, smart, insatiably curious, and always thinking.

(As an aside, my wife who is better at judging this than me was impressed by how down-to-earth he was. As an example, he remembered details about my wife that I had briefly mentioned to him in an e-mail several weeks before. This despite the fact that he handles hundreds of e-mails a day. Also, he generously offered to assist on a personal matter that we never in a million years would have thought about asking his assistance with.)

Mark also has as good or better an understanding of the collective bargaining agreement as anyone that I have run across in the league or the player's association, for that matter. This is especially true when thinking about the implications of the rules as Mark is a damn good economist. (He is also a very good stats person.)

That said, Mark has so many irons in the fire that sometimes he just does not have the time to think carefully through the implications of every last detail. Combined with his aggressive decision-making justified by his remarkable life story, this can lead to mistakes - especially as new realities start to unfold. He alludes to this in his blog.

"The model for success in the NBA has changed over the past 6 years I have been in the league. When I first got to the Mavs, there was no luxury tax, revenues from TV and the league went up every year, as did the salary cap. That changed dramatically with the leagues new TV deal and it changed even further with this years new collective bargaining agreement. Rather than an environment where salaries could go up because the cap and revenues were going up, we entered an environment where trades were made almost exclusively for financial reasons and rarely for basketball skill reasons.
The Mavs tried to take advantage of the situation. When the annual league revenue increases stopped and a luxury tax loomed, teams adjusted their financial profiles. To get under the tax threshold, they offered good players packaged with horrible contracts. We took them. We hoped the talent would get us a championship before the number of bad contracts we took on in trades caught up with us.
It didn't happen."

In the end trying to buy a championship is too expensive in the NBA. It may occasionally work for the Yankees in baseball, but in the NBA the salary cap and luxury tax make it prohibitively expensive to go that route. Trying to buy a championship also tends to lead to teams with too many scorers and too few role players, another point Mark now realizes.

"More importantly we have gone from just trying to acquire talent to have assets that in turn might be traded for better talent, to making sure we have players that fill a role for Coach Johnson’s vision of the team. Today, and for the future with young players that we can develop to fill those roles on future Mavs teams."

The problem with the idea of "acquiring talent to have assets" is that too often these "assets" have large contracts. But if a player produces less than his contract is worth, he is not an asset to the Mavs or any other team that he might be traded to. This reality becomes more important in a league with a luxury tax that doubles (or more than doubles) the costs of adding a player. In essence, we get back to the principle that a player is an "asset" only if his marginal productivity exceeds the marginal cost he adds to the team.

And players who don't fit into a role on a team, i.e. don't have high match quality, to use an economics term, run the risk of seeing their asset value fall over time. Players who are poor matches often are not going to be happy in their roles. This leads to reduced productivity for the team and the perceived value of that "asset" starts to fall. Putting players into roles where they can succeed probably is THE most important task of coaches and front offices. It leads to more wins and increased asset values for player contracts.

To that end, I have one final suggestion for Mark Cuban. Last year Seattle exceeded all expectations not because they got better players (very little change from the previous year) or got a new coach (the coaching staff stayed about the same), but because they did a better job putting players into roles where they would succeed. Part (but not all) of the reason for that is because they added Dean Oliver. Dean is a great stats expert and good basketball person and his specialty is helping coaches and front offices put teams together that best utilize their players' talents.

I know that Mark is not a big fan of Dean's book, but that is somewhat beside the point. Look at the evidence. Seattle improved by 15 games without significant changes in personnel or in the coaching staff. Historically, spending more on players has on average cost about $3 or $4 million for every extra win. Even if Dean had only a one tenth probability of being responsible for a third of those extra 15 wins, he would be worth $1.5 million a year. Wouldn't it make sense to take a tiny chance and spend one tenth of that and have Dean helping you?

Last updated: 3:00 PM, August 17, 2005

Update: how will the new NBA collective bargaining agreement and new luxury tax rules affect the free agent market?

2005-08-08T15:00:00.000-04:00

By Dan T. Rosenbaum

Shortly after the new deal was announced between the players and owners, I declared it a big victory for the players. But with a caveat. We shouldn't pretend that the fat lady was singing until the fat lady was indeed singing.

And not a peep was heard from the fat lady until more than a month later when the final details were hammered out. Based upon what I am hearing, the owners did quite well. This deal is pretty even for both sides and the ultimate outcome will depend largely on what happens to revenue growth over the life of the deal.

The initial details suggested that the teeth were taken out of the luxury tax, but that does not appear to be true. The luxury tax is guaranteed in every season of the deal at a lower threshold than used in 2004-05. Perhaps most importantly, teams not paying luxury taxes will likely continue to get larger luxury/escrow tax distributions than teams paying the tax. The new luxury/escrow tax system will be different, but it may deter spending just as much as the old system.

The increases in the salary cap were not extended to maximum salaries, which for owners takes a bit of the sting out of that change. Also, changes in the formula for the salary cap and for salary cap holds will, in effect, make the increase in the salary cap smaller than it appears. In addition, changes in the formula for the Mid-Level Exception (MLE) will result in it growing more slowly than it otherwise would.

Another important detail not known last month was that basketball related income (BRI) increased to $3.037 billion in 2004-05 - a 10.2% increase over 2003-04. That is a marked change from the 1.7% average growth over the previous two seasons. Part of the increase is due to the expansion Charlotte franchise and some accounting quirks, but some of it appears to reflect real growth. If so, the players may regret allowing maximum raises to decrease. It could be the case that revenue growth comes close to outstripping these maximum raises.

Before continuing, let me lay out the major provisions of this new deal. The provisions in green should significantly increase the overall compensation of the players, while those in red should decrease them. There is a lot in here that I believe is not reported anywhere else at this time, so I hope that this can serve as a resource for what this new deal looks like (at least until Larry Coon is able to update his FAQ). I think I have pretty good information on most of these provisions, but as new information becomes available, I will update this material.

The luxury tax will be dollar-for-dollar on spending above the 61.0% of BRI luxury tax threshold (just below that used prior to 2004-05), except that the new deal guarantees that the luxury tax will be triggered in every season of the deal. [Note that in 2004-05 the threshold was at 63.3% of BRI.]
All teams (including those who pay tax) under the new deal will receive a full share of the escrow tax collections. The most likely distribution of the luxury tax appears to be a full share to teams below the luxury tax threshold with the remainder being split evenly among all teams. This is likely to result in teams losing about $3 million in distributions in 2005-06 (more in later seasons) if they end up being taxpayers.
Luxury Tax Amnestry Provision (Allan Houston Rule): Up through August 15, teams will be given a one-time opportunity to waive one player and eliminate the luxury tax on any future contractual payments to that player. The salary will still count towards the salary cap, and payment will still have to be paid to the player according to the contract, but the team will not be subject to tax on that player’s contract. This provision will also apply to previously waived players, but not players traded for after June 21st.
For all minimum salary players, teams above the luxury tax threshold will pay luxury tax equal to the amount for a minimum salary player with two years of experience. This is also true of minimum salary players with zero or one year experience, whose salary for luxury tax purposes will be bumped up to that for players with two years of experience. Edit: This is how it reads in the CBA, but according to league sources this rule will be changed to only apply to free agents with zero or one year of experience who earn up to the minimum for a second year player.
The salary cap and luxury tax exceptions for players who are deemed ‘permanently injured’ will begin after one year rather than two, but can only be applied by the team on which the player played at the time of injury. [Teams will not be able to trade Terrell Brandon to a team looking to create salary cap space and/or avoid the luxury tax.]
The escrow tax on player salaries will be reduced from 10% in year one, to 9% in years two through five, and to 8% in year six of the agreement.
The players will be guaranteed a total of 57% of BRI each year. My understanding is that, contrary to earlier reports, this percentage will not increase during the life of this agreement.
The escrow tax will only be retained by the owners to offset salary costs when total salaries exceed 57%, just like in the last season of the prior deal, but in the new deal that threshold will be raised to 57.5% if BRI is 30% higher than in 2004-05 and to 58% if BRI is 60% higher than in 2004-05.
The salary cap will be set at 49.5% iof BRI in 2005-06 and 51% thereafter, up from 48.04%. Maximum salaries will continue to be tied to the old 48.04% of BRI percentage.
Gilbert Arenas Provision: Restricted free agents in their first two seasons can be offered contracts above the MLE by teams with salary cap room, but in the first two seasons of such deals players will be paid the MLE and 108% of the MLE. After the second year of the contract, the contract can increase to the maximum allowable salary for that player. For example, with no restrictions a player in their first two seasons could be offered a maximum deal of $69.6 million over five years ($12M, $12.96M, $13.92M, $14.88M, and $15.84M.) But this provision will limit that to $55 million over five years ($5M, $5.4M, $13.92M, $14.88M, and $15.84M). For the team offering this contract, the salary cap hold will be equal to the average value of this contract over each of the five years of the contract - in this case $11 million. Thus, the offering team would need to have $11 million in space under the salary cap in order to offer this contract. The original team can match if it has its MLE or early Bird exception available and for the original team the salary cap hold will be equal to the value of the contract in each year ($5 million in the first year, $15.84 in the last year).
A team will have 7 days to match an offer for a restricted free agent (down from 14).
The maximum length of a new contract will now be 6 years for a player who signs with his current team (down from 7), and 5 years for a player who signs with another team (down from 6).
The maximum annual raises on a new contract will now be 10.5% of the first-year salary (not compounded) for a player who signs with his current team (down from 12.5%), and 8% for a player who signs with another team (down from 10%).
First-round picks will be given standard contracts with two years guaranteed (down from 3), followed by two years of team options (up from 1). The contract amounts will remain standardized. [The option for year 3 will have to be picked up prior to year 2. This is very early to give up on a rookie, so it is likely that teams will rarely decline this option.]
In general, there are no changes being made to the general salary cap exception mechanisms which allow teams to exceed the salary cap to add players, such as the Bird Exception, Million Dollar Exception (renamed the Bi-annual Exception), Mid-Level Exception (MLE), etc. However, the average NBA salary will be computed assuming 13.2 players per team (up from 12.5), which will result in the MLE being about five percent smaller than it would otherwise be.
For teams over the salary cap, trades will be allowed as long as they trade away as much first-year salary as they receive within 25% (up from 15%) + $100,000.
Gary Payton Rule: Players will have to wait 30 days in the regular season (20 days in the offseason) before being allowed to sign with the team that traded them away.
Alonzo Mourning Rule: The league will have more discretion to fine players who refuse to play for a team they are traded to.
Base-year compensation (BYC) rules (for trades involving players who just received a sizable raise) will expire on the later of (a) June 30 of the following year or (b) six months following the commencement of base year compensation player status.
Minimum salary levels will be increased by 3.5%.
Teams will be required to have 13 players (up from 11) under contract with the maximum staying at 15. Related to this, teams will have a salary cap hold for every roster spot under 12 (up from 11). The league has guaranteed that teams will have an average of 14 players and will be fined if that average is not met.
The active roster will still be limited to 12 players, but the designation for the others will now be ‘inactive’ rather than ‘injured.’
The NBA age limit will be 19, and one year past high school for Americans, based on calendar year. [There is likely to be a related league rule implemented that prohibits NBA scouts and personnel from scouting any high school games.]
The NBA Developmental League (NBDL) age limit will be 18, down from 20.
Teams will be able to send players with less than two years experience to the NBDL for needed development during the year, while still retaining full rights, with the ability to recall any such player at any time as desired. Such players will receive their full NBA pay.
Teams will be able to send an assistant coach to their associated NBDL team to work with and monitor the development of their players.
Players will be subject to as many as 4 random drug tests per year (up from 1), with penalties increasing for failing a test on a 4-strike system (5-10 games, 25 games, 1 year, lifetime).
Suspensions for on-court misbehavior will be subject to arbitration if the penalty exceeds 12 games (formerly there was no arbitration regardless of length).
More money will be added to pension payments for the older retired players, pending approval under IRS regulations. [I am not sure what happened with this. I certainly hope this made it into the final deal.]

From the beginning, I have argued that the big enchilada in this deal is the change in how luxury and escrow taxes are distributed back to the teams. In the old deal the bulk of the $300 million or so a year (in luxury and escrow taxes) went to teams below the luxury tax threshold. This resulted in the first $3 to $4 million spent above the luxury tax threshold costing teams $3 to $4 million in luxury taxes and $8 to $10 million in lost distributions. That, in effect, was a 300 to 400 percent effective tax rate for spending just above the luxury tax threshold. That got teams attention and for some teams made the luxury tax threshold a "hard cap."

The new deal results in the escrow taxes being distributed evenly to all of the teams. Non-luxury tax payers also get 1/30th of the luxury taxes and mostly likely all teams will get about 1/30th of what is left over. That would mean that the first dollar of luxury tax would cost teams $3 to $4 million in lost luxury tax distributions. It is not the $8 to $10 million in the last deal, but if teams might lose all of that money with their first dollar of luxury tax it might result in many teams treating the luxury tax threshold as a "hard cap."

This is bolstered by the the luxury tax being guaranteed to be triggered in every season and the luxury tax threshold being known prior to the season (at a level below that of 2004-05). I suspect this might result in more teams treating the luxury tax threshold as a "hard cap."

On the other hand, as soon as teams take the $3 to $4 million hit, the effective tax rate will be just 100 percent, which is lower than it was in the old deal. Also, the luxury tax teams will be richer because they will be getting a higher share of the distributions. This could result in more spending. The luxury tax amnesty provision, in essence, redistributes income from low-spending to high-spending teams, which likely will result in more spending, especially since it puts more players into the free agent market.

So the luxury/escrow tax system will be different, although it is possible that it may deter spending as much as the old deal. (Note also that the players will be paying less in escrow tax at the end of this deal. That is a clear benefit for the players.)

As mentioned above, the salary cap increase is a benefit to the players. But it is phased in (starting at 49.5% in 2005-06 and rising to 51% thereafter) and the salary cap hold for the 12th roster spot will in effect make the increase a bit smaller. Also, the welcome changes in how projected BRI is calculated will likely result in the salary cap being a bit smaller than it otherwise would have been. Finally, not allowing maximum salaries to rise with the increase in the salary cap is a big deal, because maximum salary players account for a significant share of total player compensation. All told, the increase in the salary cap is good for the players, but not as much as it appeared a month ago.

And finally, if the over 10 percent increase in BRI is the start of a new trend, the legislated reduction in maximum raises could result in players not being able to keep pace with BRI growth. Potentially that more than anything could result in this being a great deal for the owners.

This author initially claimed that the players may have taken the owners to the cleaners with this new deal. Well, about the only thing that needs to be taken to the cleaners is perhaps my mouth for suggesting that the league may have negotiated a bad deal. (I expressed a lot of caveats, but should have been more skeptical of those initial details.) So if the league would like to send a bar of soap down here to Greensboro, I promise to oblige them by sticking it in my mouth.

Last updated: 11:59 PM, August 26, 2005

Defense: what do the adjusted plus/minus ratings say?

2005-08-05T09:09:00.000-04:00

By Dan T. Rosenbaum

I have updated my defensive ratings and provided more detail in an article posted at 82games.com.

We can debate about what plus/minus statistics tell us about future defensive effectiveness (especially if a player changes roles), but there can be no debate about what they tell us about past defensive effectiveness. Like a free throw percentage statistic that records who was the most effective free throw shooter, plus/minus statistics can be used to record who was the most effective defender. The calculation is more complicated, especially when we account for the other players on the floor, but the concept is the same.
Nobody, including this author, believes that these lists are the be all and end all.

Last updated: 9:30 AM, August 5, 2005

Defense on the perimeter: what do the adjusted plus/minus ratings say?

2005-08-02T01:59:00.000-04:00

By Dan T. Rosenbaum

It has been interesting seeing the reaction to my list of best and worst big men defenders. This writer never claimed for a minute that these were THE definitive lists (in the exact right order) of defensive big men. That is not the nature of statistical evidence. (If we are honest with ourselves, we would realize that this is the nature of most non-statistical evidence as well.)

With statistical evidence we generally are painting with broad strokes because the results are rarely precise enough to distinguish a player rated #3 from one rated #7. That said, these results with a handful of exceptions, do tell us that the players in the "best" lists are better than average defenders and the players in the "worst" lists are not. Context does matter, but watching players who change teams it appears that context does not typically change a defender from an elite defender to an average one.

And remember that these lists are based upon plus/minus statistics that measure how a team defends when a player is in the game versus when he is not. Since how a team defends when a given player is in the game IS what we care most about, when we see odd results we have to ask ourselves why the team defends so well (or so poorly) when that player is in the game.

And remember I am accounting for who a player is playing with and against and for garbage/clutch time play. So for these adjusted plus/minus ratings it does not matter who a player's substitute is, like it does with unadjusted plus/minus ratings.

Now these results are a combination of adjusted plus/minus ratings (based upon three seasons with most of the weight on last season) and statistical plus/minus ratings (based upon just last season) that average in the adjusted plus/minus ratings of players similar to a given player. I get a lot of objections to including this statistical plus/minus rating because supposedly players without gaudy defensive stats will be hurt by this statistical plus/minus ratings.

But players like Bruce Bowen and Tayshaun Prince turn out to be more highly rated by the statistical plus/minus rating than the adjusted plus/minus rating. (On average, players selected to the All-Defensive teams were more highly rated by the statistical plus minus/rating.)

Now again in "Measuring How NBA Players Help their Teams Win" I describe the gory details of how I compute these adjusted plus/minus ratings. (I have made a few changes since then, along with adding another year of data.) So combining ratings of defense from a players' own adjusted plus/minus rating and that of players similar to him, which players are the best defenders? I list the best and worst by position among players playing 1,000 or more minutes in 2004-05. These ratings are predictions for the 2005-06 season assuming that younger players will improve their defense and older players may see a decline in their defense.

And remember if you don't like the ratings (and the player is not a rookie who with only one year of data is more prone to error), ask yourself two questions.

Why does the player's team defend a lot better (or worse) when that player is in the game? Why do the teams of players similar to that player defend a lot better (or worse) when they are in the game?

And now that I have bored you to tears, here are the lists.

Top Six Small Forwards (best to worst):

Shane Battier
Darius Miles
Trevor Ariza
Shandon Anderson
Paul Pierce
Bruce Bowen

Bottom Six Small Forwards (worst to best):

Peja Stojakovic
Matt Harpring
Lee Nailon
Wally Szczerbiak
Tim Thomas
Carmelo Anthony

Remember that Ron Artest did not make this list because he did not play 1,000 minutes last season. The big surprises here probably are Ariza, Harpring, and the absence of Tayshaun Prince.

Ariza is a rookie who did not play a lot of minutes so take his rating with a grain of salt. Harpring has not been an effective defender in each of the last three seasons, but I think last season he was a bit worse because of nagging injuries.

Prince seems to benefit a great deal from playing with the two Wallaces. His raw plus/minus is very good, but once I account for the fact that he plays with the two Wallaces, it falls apart. When he plays without them, Detroit struggles on defense, whereas the Wallaces just do not seem to miss him much when he is out of the game. That said, Prince plays so many of his minutes with the two Wallaces that it is a bit difficult to separate out their relative contributions.

Top Eight Shooting Guards (best to worst):

Tony Allen
Andre Iguodala
Josh Smith
Ben Gordon
Aaron McKie
Gerald Wallace
Manu Ginobili
Eddie Jones

Bottom Eight Shooting Guards (worst to best):

Michael Redd
DeShawn Stevenson
Jalen Rose
Keith Bogans
Latrell Sprewell
Raja Bell
Ricky Davis
J.R. Smith

For this best list to be dominated by rookies is very different from last season when the rookies as a group were terrible on defense. This season they were quite good and look even better in this list because this is a projection for next year and I would expect their defense to get better with experience. But remember to take these rookie ratings with a grain of salt. We really need another season to get an accurate assessment of their defense using plus/minus ratings.

In particular, Gordon is a puzzle since he has a reputation of being a terrible defender. He played the bulk of his minutes with Tyson Chandler and it appears to me he is getting credit for a lot of Chandler's handiwork because the few times Gordon was in but Chandler was not, the Bulls played great defense. On the other hand, in the few times when Chandler was in but Gordon was not, the Bulls played pretty poor defense.

Statistically, this implies that it was Gordon and not Chandler that was the reason for the Bulls' good defense. And thus he gets more credit for the good defense during the times when they were both in the game. Gordon may be a better defender than he has gotten credit for, but I suspect that part of this is just good fortune. Once we have another season to try to separate Chandler and Gordon, it should be easier to assess Gordon's defensive effectiveness.

And yes, it is Redd who is the max player who is rated the worst defender at his position. The Bucks over the past three seasons have consistently been better when Redd has been out of the game. (In fact, it is striking how consistent the results have been.) And the reason is because he has been a horrible defender - just plain horrible. There has been no player who has played anywhere near the minutes he has over the past three seasons that has rated as consistently horrible on defense as Redd has. But I think what we learn from all of this is that defense may win championships, but it does not pay the bills.

Interestingly, Bell who is being signed by the Suns in order to shore up their defense rates as a bad defender. What is remarkable about Bell's results is that he has played for several teams over the past three seasons and yet his defensive ratings have been consistently bad. That strongly suggests that putting him in a new context with the Suns is not going to markedly improve his defense.

Top Five Point Guards (best to worst):

Chris Duhon
Marcus Banks
Earl Watson
Jason Kidd
Eric Snow

Bottom Seven Point Guards (worst to best):

Troy Hudson
Tyronn Lue
Tierre Brown
Damon Stoudamire
Carlos Arroyo
Nick Van Exel
Leandro Barbosa

Interestingly, two of the best defending point guards (Duhon and Watson) are still available in the free agent market. Now again we only have one season with Duhon (but a lot of minutes in that season and results that are consistent across the adjusted and statistical plus/minus ratings), so we should be a big skeptical of his results. But Watson has consistently over the last three seasons been an elite defender at the point guard position. He seems to be another example of the adage that defense may win championships, but it does not pay the bills.

Lue has a reputation of being a good defender, but like Bell he has played in a number of places and consistently been an ineffective defender. His reputation must rest pretty heavily on his play in the Finals when he was somewhat effective against Allen Iverson. That performance has stuck in people's minds in face of conflicting evidence.

For more comments about this methodology and these results from some of the top basketball statistics experts, as well as lots of other interesting discussions about basketball statistics, see the APBRmetrics message board.

Last updated: 5:00 AM, August 2, 2005

CBA is signed, salary cap set

2005-07-30T08:09:00.000-04:00

By Dan T. Rosenbaum

Apparently, in the wee hours this morning the league and union hammered out the final details of the new collective bargaining agreement. While I am still eager to find out what those details are, we have gotten word on what the salary cap, luxury tax threshold, and MLE will be.

2005-06

Salary cap: $49.5 million
Luxury tax threshold: $61.7 million
MLE: 5.0 million

2006-07 Estimates

Salary cap: $49.2 million
Luxury tax threshold: $59.7 million
MLE: $5.4 million

Except for the fact that 49.5% apparently was used to compute the salary cap (rather than 51% like will reportedly be used next season), the salary cap and luxury tax threshold are almost dead on what I predicted. This suggests that the formula for projected BRI was not changed substantially, which would mean that we should expect the salary cap to stay about the same in 2006-07 and for the luxury tax threshold to fall.

Now the MLE is a bit lower than I expected, so it appears that perhaps some changes were made to that formula. I am eager to see what they are.

Last updated: 8:00 AM, July 30, 2005

The Hornets franchise is a danger to the league

2005-07-29T00:29:00.000-04:00

By Dan T. Rosenbaum

ESPN.com is reporting this AP story.

NEW ORLEANS -- A new lawsuit filed against the New Orleans Hornets claims the team deprived sales personnel of commissions by falsely recording sales of private suites as if they were group ticket sales in less expensive sections -- a practice that also could have resulted in inflated attendance figures.
The lawsuit is one of several new actions filed this week against the Hornets, who already were accused of failing to pay overtime in a federal lawsuit filed earlier this year. There are 12 plaintiffs in that first case, one of whom still works for the team.
The new legal actions include a request for a protective order, filed in response to allegations in sworn affidavits, that Hornets executives have sought to intimidate other employees who might qualify to join the federal overtime lawsuit by threatening firings and bad references, which would be illegal. The request also alleges that certain executives have made false statements about the lawsuit in an effort to discourage employees from participating.

I hope the league takes these allegations very seriously. I love the NBA and hate to see a franchise do so much damage to the NBA. The Hornets franchise has already poisoned the well in Charlotte, which has made it all the more difficult for the new Bobcats franchise to get traction there. Now it appears to be doing the same thing in New Orleans.

The league is very concerned with its image and thus has in the past dealt very harshly with criticism of referees by Mark Cuban and Jeff Van Gundy and transgressions by players, such as Ron Artest. The Hornets are damaging the NBA image much more than Cuban, Van Gundy, or Artest ever did, and so I would think it would be in the league's best interest to deal with them as swiftly and sternly as is possible under its rules.

David Stern has a tremendous amount of political capital in the league. I think it would be another testament to him if he could creatively come up with a way to help the league do something about this Hornets' franchise.

Update: I intend this to in no way be a criticism of the basketball people for the Hornets. They have, in general, tried to do a good job under very trying circumstances.

Last updated: 1:00 AM, July 29, 2005

Defense for the big men: what do the adjusted plus/minus ratings say?

2005-07-28T03:30:00.000-04:00

By Dan T. Rosenbaum

If I had a dime for every time I heard that you can't measure defense with stats, I would be a rich man. (Well maybe not rich, but I might have enough money for a nice dinner.)

Steals, blocks, and defensive rebounds - they give us only a snapshot of what a player does on defense. We would like to have more and better data to measure defense. One direction is to collect better defensive statistics, an effort that is being spearheaded by Roland Beech at 82games.com.

Another approach is to use plus/minus statistics to measure how a team defends when a player is in the game versus when he is not. It would seem odd to say that a player was a good defender when his team defended better when he was on the bench than when he was in the game.

Now, of course, it is important to account for who a player is playing with and against. Playing beside Ben Wallace might even make me appear to be a good defender. For that reason I compute adjusted plus/minus ratings that account for who a player is playing with and against. These adjusted plus/minus ratings can then be broken down into their offensive and defensive components.

In "Measuring How NBA Players Help their Teams Win" I describe the gory details of how I compute these adjusted plus/minus ratings. (I have made a few changes since then, along with adding another year of data.) It takes a lot of data for adjusted plus/minus ratings to tell us anything useful and for that reason it is useful to ask another question. What is the average adjusted plus/minus rating of players similar to a given player? Answering this question can give me a second estimate of a players' defensive productivity and help combat errors from adjusted plus/minus ratings due to lack of data.

So combining ratings of defense from a players' own adjusted plus/minus rating and that of players similar to him, which players are the best defenders? I list the best and worst by position among players playing 1,000 or more minutes in 2004-05. These ratings are predictions for the 2005-06 season assuming that younger players will improve their defense and older players may see a decline in their defense.

Top Five Centers:

Ben Wallace
Dikembe Mutumbo
Theo Ratliff
Jason Collins
Joel Pryzbilla

Bottom Five Centers:

Primoz Brezec
Marc Jackson
Predrag Drobnjak
Mark Blount
Eddy Curry

Ben Wallace by all accounts is a game changer as a defender, so it is comforting to see him at the top of this list. Wallace is joined by three of the top shot blockers in the league in Dikembe Mutumbo, Theo Ratliff, and Joel Pryzbilla. Jason Collins has consistently over the past three seasons had an above average adjusted plus/minus rating and the reason is because he is a very solid defender.

Primoz Brezec was a solid offensive player for Charlotte last season, but his poor defense resulted in the Bobcats playing worse when he was out on the court. Eddy Curry also has consistently had a below average adjusted plus/minus rating over the past three seasons, and the biggest reason is his poor defensive play.

Interestingly, Kurt Thomas who was recently acquired by the Phoenix Suns rates in the bottom third among centers in defense. It is rather surprising to hear analysts argue that a players who made the 5th worst defense (the Knicks) worse is going to help the 17th best defense (the Suns) get better.

Top Seven Power Forwards:

Tim Duncan
Kevin Garnett
Nick Collison
Tyson Chandler
Nenê
Andrei Kirilenko
Rasheed Wallace

Bottom Seven Power Forwards:

Matt Bonner
Cliff Robinson
Antawn Jamison
Juwan Howard
Austin Croshere
Antoine Walker
Shareef Abdur-Rahim

I am sure no one will be surprised to see Tim Duncan and Kevin Garnett at the top of the list on defense for power forwards. Nick Collison is a bit of a surprise to anyone who did not watch the Sonics play a lot. (Please note that with just one year of data, ratings for rookies like Collison are more prone to error.)

I am sure many will be surprised to see Cliff Robinson in the list of worst defensive power forwards, but last season he had a dreadful adjusted plus/minus rating. Both Golden State and New Jersey played better defense when he was on the bench.

It is time for bed now, so I will leave the other positions for the next installment. But as a sneak preview, there will be a player who is about to receive a maximum salary offer who will rate as the worst defensive player at his position. Can you guess who that might be?

Last updated: 5:45 PM, July 28, 2005

Kudos to Chad Ford at ESPN.com

2005-07-27T14:31:00.000-04:00

By Dan T. Rosenbaum

Update: I am pushing this up, because it has been reported that Chad Ford is leaving ESPN. The abuse that I am seeing him get today is extremely immature, largely a combination of jealousy and ignorance.

Around this time of year with all of the rumors flying about, sportswriters like Chad Ford take a lot of abuse. But in my humble opinion, Chad Ford is one of the best sportswriters out there. I don't think anyone works harder than he does. He travels all over the country - all over the world - for his stories. I have seen him working and he is constantly talking to people, either in person or on the phone. He understands the collective bargaining agreement as well as any sportswriter (and a lot of front office personnel), and he has started to include advanced statistics from 82games.com and John Hollinger in his articles. And he has a law degree, to boot.

I think we all underappeciate how difficult it would be to be in his shoes - to let the public know what he knows without overstepping. I think he does a very good job at that. In my humble opinion, I think we should thank our lucky stars that it is Chad Ford (and not someone else) that is in the "insider" position at ESPN.com.

P.S. I like Marc Stein a lot too, but it is Chad Ford who gets most of the abuse on message boards at this time of the year.

Last updated: 1:30 PM, July 27, 2005

Part II: Some ideas about the use of capologists and stats experts in NBA front offices

2005-07-22T21:00:00.000-04:00

By Dan T. Rosenbaum

A key issue not addressed in Part I of this series is why teams don't invest more in capologists and stats experts.

For the most part, I think teams have come to peace with the importance of capologists and over the years understanding of the salary cap and luxury tax has increased significantly league-wide. I think teams would be better off with more intergration of the salary cap and basketball expertise, but teams are not doing too badly in this area. That bodes well for stats experts eventually finding a place in NBA front offices.

But for now it is another story. There are teams that have integrated statistical expertise in a serious, meaningful way, but for the majority of teams serious statistical analysis is treated like an ugly stepchild. It is hidden deep in the bowels of the organization and let out occasionally to do some chores.

I think the biggest roadblock to stats experts is the idea that stats experts are a substitute for basketball people rather than a complement. That mindset is probably an artifact of the Moneyball revolution in baseball where arrogance, condescension, and mistrust have often characterized the relationship between baseball and stats people. On the basketball side, we certainly have had some of the same problems, but I think many of the key ambassadors from the stats side have a lot of respect for what basketball people know about the game and how critical that is in understanding the stats. Likewise, there are a great number of basketball people who respect what stats experts do.

However, because of the interactions between players and importance of roles, statistical evidence is unlikely to be as clear-cut in basketball as it is baseball. With arguments that are more subtle and evidence that is more tenuous, it is difficult for stats experts to be convincing to a skeptical audience of basketball people with a limited understanding of the nature of statistical evidence.

Complicating this delicate interplay, some stats experts have made grandiose claims about their methodologies. These may be good marketing strategies, but when these grandiose claims (often made without any acknowledgment of the uncertainty in all statistical evidence) turn out to be false, it damages the credibility of the entire stats community. It is not the mistakes that rub basketball people the wrong way (everyone makes mistakes), it the air of superiority with which these claims are made. Basketball people have paid their dues and learned the game through countless hours playing and watching basketball, and so it has to be grating to hear someone tell them that their computer program makes them obsolete. Especially when that computer program starts spitting out absurd results that are obviously wrong.

This makes it hard for basketball people to see the value of serious stats work, especially when they repeatedly get free offers from academics or retired millionaires from Microsoft to do work for them for free. In such an environment all stats people look the same, so it seems ludicrous to invest time and money into any one expert. But as I argued in Part I, it is that kind of investment that will result in stats experts helping teams.

But this should not all be put on the teams. We in the basketball stats community need to do a better job communicating. We need to come up with convincing arguments for why we are relevant, why we are not a threat to basketball people, and how we can help basketball people be better at what they do. It will take time, but eventually I think we can do this.

Last updated: 9:00 PM, July 22, 2005

Salary cap percentage will only rise to 49.5% in 2005-06

2005-07-22T12:42:00.000-04:00

By Dan T. Rosenbaum

In an e-mail Chad Ford of ESPN.com told me that the salary cap percentage will not be 51% in 2005-06. It will be 49.5% in 2005-06 and 51% starting in 2006-07. This means that if the formula for the salary cap does not otherwise change, the salary cap is likely to be between $49 and $50 million. If the formulas do change (and they should), the salary cap could be quite a bit less than $49 million.

The teams most affected by this phasing in of the salary cap percentage probably are Cleveland and Milwaukee. Both teams are bumping up against the salary cap, so it may be tough for Cleveland to be competitive for Marko Jaric or possibly for Milwaukee to be able to re-sign Za Za Pachulia.

Also, since maximum salaries are a function of the salary cap, maximum salary players, such as Michael Redd and Joe Johnson, are likely to be paid a little less than they would have if the salary cap percentage had not been phased in.

Last updated: 1:30 PM, July 22, 2005

The Moratorium Continues

2005-07-20T19:39:00.000-04:00

By Dan T. Rosenbaum

ESPN.com is reporting that the moratorium will not end on July 22nd because negotiations for the new collective bargaining agreement are ongoing. A tentative agreement was passed on June 21, so this will push the post-agreement negotiations past a month. During the negotiations for the 1999 CBA a tentative agreement was in place on January 6 and the moratorium ended on January 21 - a span of 15 days.

Now, of course, there was a lot more pressure to resolve issues last time when games were being lost, but this suggests that these negotiations are more than a mere formality. It will be interesting to see the outcome.

Last updated: 8:00 PM, July 20, 2005

A suggestion for changes in how the salary cap and MLE are computed

2005-07-16T01:00:00.000-04:00

By Dan T. Rosenbaum

In "What will the salary cap, luxury tax threshold, and mid-level exception be in 05-06 and 06-07?", I said that significant changes to the collective bargaining agreement would result in big changes in my estimates of the salary cap, luxury tax threshold, and mid-level exception. (Folks posting my estimates generally have ignored that admonition.) But in this piece I would like to lay out how I think the formulas should be changed and how that might affect these estimates.

First of all, let's review the technical details about salary cap formula.

Salary Cap:

Salary cap = [Projected BRI * 0.51 - (29/30) * Projected Benefits]/29, where

29 is the number of non-expansion teams in their first two seasons (equals 30 in 2006-07).
51 percent is the salary cap percentage that was increased from 48.04 percent in the previous CBA.
I am using $114 million and $120 million for Projected Benefits in 2005-06 and 2006-07, respectively.
Projected BRI = Estimated National TV BRI + 1.08 * Previous Season Non-National TV BRI - Previous Season BRI Shortfall.
Previous Season BRI Shortfall = Previous Season BRI - Previous Season Projected BRI. (This shortfall is never less than zero.)

Because of a $37 million lump sum payment from Fox Sports to the Los Angeles Lakers that will result in a bump up of BRI of about $64 to $74 million, BRI will almost surely exceed Projected BRI in 2004-05. Thus, the Previous Season BRI Shortfall is likely to be zero in the 2005-06 salary cap calculations. However, because that lump sum payment will not reoccur in 2005-06, the Previous Season BRI Shortfall is likely to be substantial in the 2006-07 salary cap calculations. And that is likely to result in the salary cap falling in 2006-07. (It will also fall because the number of non-expansion teams will increase to 30.)

This adjustment for previous shortfalls is what causes the lumpiness in the year-to-year salary cap calculations. Every other year there is a shortfall and this results in small increases (or decreases) in the salary cap followed by huge jumps in the next year. My suggestion to fix this jumpiness is the following.

Instead of the 1.08 multiplier on Previous Season Non-National TV BRI, the league should use the average growth rate of Non-National TV BRI over the previous three seasons.
The league should do away with any adjustment for previous shortfalls. If an adjustment is absolutely necessary, I would suggest that it be averaged over three years and only be based upon National TV BRI.
The league should go back and spread the $37 million lump sum payment (from Fox Sports to the Lakers) over the life of that contract. If I had my way, I would even allow this change to affect the calculation of 2004-05 BRI, except for in calculations for whether or not the luxury tax is triggered. (Teams had planned on no luxury tax partially because of this lump sum payment.)

The first two suggested changes are not that important in and of themselves. Alone they project the salary cap to $50.8 million in 2005-06 and $49.90 million in 2006-07. (This is relative to $51.0 and $49.4 million.)

But the third suggestion is very important. This projects the salary cap to $49.2 million in 2005-06 and $49.9 million in 2006-07.

Luxury Tax Threshold:

The luxury tax threshold formula, if it is now based upon projected BRI, is the same as the salary cap formula, except that 0.51 is replaced with 0.6111. Under the three suggestions for changes above, the luxury tax threshold would be $59.8 million in 2005-06 and $60.6 million in 2006-07 (versus $61.9 million in 2005-06 and $59.9 million in 2006-07).

Mid-Level Exception:

Mid-Level Exception = 1.08 * [Previous Season's League-Wide Salaries/(12.5 * 29)]

League-Wide Salaries do not include expansion teams in their first two seasons.
29 is the number of non-expansion teams during their first two seasons.
Only injured players whose salaries do not count for salary cap or luxury tax purposes are not counted in Previous Season's League-Wide Salaries.

My suggestion is the following.

Instead of the 1.08 multiplier, my suggestion is to use the average growth rate of BRI over the past three seasons (use only first two seasons in 2005-06 so as not to use BRI numbers from previous TV contract).
Instead of assume 12.5 players per team, I suggest assuming 14.
I suggest including all salaries, including those of injured players removed from team salary.

These changes would result in a smaller MLE of about $4.6 million in 2005-06 and $4.9 million in 2006-07.

I do not know if these formulas are up for debate in the drafting of the new collective bargaining agreement, but these are the result of my suggestions for potential changes.

Salary cap, luxury tax threshold, and mid-level expection using my suggestions for potential changes (earlier projections in parentheses)

2005-06

Salary Cap - $49.2 million ($51.0 million)
Luxury Tax Threshold - $59.8 million ($61.9 million)
Mid-Level Exception - $4.6 million ($5.2 million)

2006-07

Salary Cap - $49.9 million ($49.4 million)
Luxury Tax Threshold - $60.6 million ($59.9 million)
Mid-Level Exception - $4.9 million ($5.6 million)

Last updated: 1:00 AM, July 16, 2005

Updated thoughts on the CBA

2005-07-14T19:47:00.000-04:00

By Dan T. Rosenbaum

More and more of the details of the CBA are dribbling out daily. In "How will the new NBA collective bargaining agreement and new luxury tax rules affect the free agent market?", I have included various updates. The Gilbert Arenas provision is updated, and due to conflicting reports about the distribution of the luxury taxes, I have significantly changed my assessment of this deal. I think that until we know how the luxury taxes are distributed, it is an open question how the free agent market will be affected over the life of this deal.

It fascinates me that there is uncertainty at this point about how the luxury taxes might be distributed. This issue is more important to the decision-making of teams than all but a handful of other changes to the CBA, yet it appears possible that many (if not all) teams do not know how these taxes will be distributed. What this means is that teams may not know how much free agents will cost them and for some reason are not banging down the doors of the league to find out. I talk more about this issue in "How will the new NBA collective bargaining agreement and new luxury tax rules affect the free agent market?".

Last updated: 10:30 PM, July 14, 2005

Some ideas about the use of capologists and stats experts in NBA front offices

2005-07-09T16:00:00.000-04:00

By Dan T. Rosenbaum

I would like to start out with a big disclaimer. I have never worked for an NBA team in any way whatsoever, so you should take what I say with a big grain of salt. But I have talked to a lot of people in a lot of NBA front offices, and I think I might have some useful ideas (and surely some bad ideas) about how to best utilize capologists and stats experts. With teams paying skyrocketing costs for coaches, I figured that some brainstorming about other front office personnel might be interesting.

How teams use capologists

Most teams have a capologist and a stats expert (usually separate people). The capologist often is a lawyer or accountant outside of the basketball operations department - sometimes even outside the organization. Their capologist duties often are only a small part of their overall responsibilities, so they concentrate on learning the complex rules governing trades, free agency, and the luxury tax. This leaves precious little time to think strategically about how to use these complex rules to benefit their team through trades, structuring free agent deals, etc. Also, putting together forecasts of future salary caps, luxury taxes, and league-wide free agent activity is not generally done in any systematic manner. And perhaps most importantly, by not being a "basketball person," a capologist often is seen as a resource for asking questions and not as an integral decision-maker.

But there is a tremendous amount of heterogeneity across teams, so it is a big mistake to overgeneralize. The lawyer/accountant model of a capologist described above is not the only model. Other teams invest salary cap expertise into their basketball operations people. The Chicago Bulls and San Antonio Spurs are two of the most successful models for these two different models of capologists.

Take, for example, a trade made in October 2002 that was way under the radar screen. San Antonio traded Erick Barkley to Chicago for cash considerations and Chicago immediately waived Barkley. What was the purpose of this trade?

San Antonio probably forecast that their team salary would be above the luxury tax threshold (and below the cliff threshold). So Barkley's salary would have cost the Spurs $765,600 in salary, $765,600 in luxury taxes, and about $2.4 million in lost luxury and escrow tax distributions. Even if they paid Barkley's full salary and included a small bribe in their deal with the Bulls, they could have saved more than $3 million in a move that did not affect their basketball team one iota. Three million dollars likely would pay the salary and overhead for a capologist for more than a decade.

And it is no coincidence that San Antonio and Chicago pulled off this deal. Chicago has lawyer Irwin Mandel who is reported to be one of the best salary cap experts in the league. Mandel is not a basketball person but he has been with the Bulls forever, and almost plays the role a President would play on other teams. When general manager John Paxson meets with agents, it is not uncommon for Mandel to be with him during negotiations.

San Antonio has Sam Presti, whom general manager R.C. Buford has called "one of the talented young minds in the game." Presti is a rarity in the business being a capologist and stats expert. Also, general manager R.C. Buford reportedly is one of the best salary cap experts in his own right.

While Chicago represents perhaps the best application of the non-basketball person model of capologist, San Antonio employs what I believe is a better model. They have invested salary cap expertise into their key basketball people, in essence creating a culture that is probing for arbitrage opportunities based upon the salary cap. And that, I believe, is one of the reasons why San Antonio is one of the best-run franchises in the NBA. Because their key basketball people have a solid understanding of the nuances of the salary cap, they see opportunities that are missed by teams that departmentalize basketball and salary cap expertise.

Another example is the trade that brough them Hedo Turkoglu and Ron Mercer two years ago. They served as broker for a trade between Indiana and Sacramento, and in return got a couple serviceable players that did not cost them any salary cap space in the next summer when they were looking to sign Brent Barry and re-sign Manu Ginobili. Such a move may not seem like much, but little moves like than can be what separates the championship teams from everyone else.

How teams use stats experts (and my philosophy on basketball stats experts)

The stats expert often is a young person who may have worked his way up in the organization, often starting out working in the video department. Typically he has very little formal statistical training, but learns about basketball stats through reading and talking with other experts.

Another common approach is to hire a statistician (or two) with some advanced training, either in-house or as an outside consultant. Often these statisticians may technically be quite proficient; they may produce advanced statistics with dizzying levels of math. But do they have the basketball knowledge needed to ground their analyses? Sometimes, but not always.

And therein lies the problem. We all use statistics. Even the oldest of the "old school" basketball people look at box scores and per game statistics. Stats experts have value not because they are the only ones looking at stats. Their value comes from having good judgment about stats - good judgment that comes from a solid understanding of both basketball and statistical analysis more generally.

But the bar for this good judgment is set very high. Basketball is not like baseball, where the repeated one-on-one contests between batters and pitchers and relative lack of interaction between teammates generates loads of data that can be usefully analyzed with the statistical tools taught in a good undergraduate statistics class.

In basketball, the centrality of teammwork and interactions between players requires that we need to account for a player's roles, as well as the players he plays with and against. Doing so requires a lot more creativity and more sophisticated tools than what are used by baseball analysts. An Ivy League graduate who is handy with Excel is not going to be as useful in basketball as they have been in the Moneyball world of baseball. It is not enough to be smart with numbers.

That is why I think the folks who end up doing stats in a serious way for basketball teams are going to have more formal training (or at least more extensive experience working with basketball stats) than the folks in baseball. The problem is harder in basketball, so the analysts are going to need a bigger toolbox they can work with.

(As I see with the graduate students I teach, the demand for skills working with complex data are growing exponentially in the job market.)

But a good practical understanding of statistical analysis is not enough. The centrality of teamwork and role players significantly increases the basketball knowledge a stats expert must have in order to make good judgments. This again makes basketball very different from baseball, where a lot can be learned sitting in an office and churning out numbers. Not so in basketball, where context matters.

So the teams that get this right are going to need two things - a person with solid training in (or extensive practical experience with) statistics/econometrics and a solid understanding of basketball.

The gold standard of stats experts - Dean Oliver - is no accident. Oliver who worked for the Sonics this past season is a rarity among stats experts. He is Ph.D. (in environmental engineering, I think) who has worked as a scout. He combines formal training, a solid understanding of basketball, and lots of experience (he has been at this for more than a decade).

Oliver, I believe, played a subtle but significant role in the Sonics' remarkable turnaround this season. Conventional wisdom gives McMillan almost all of the credit, but Mike Kahn of FoxSports.com in a piece that is highly supportive of McMillan writes that McMillan "contemplated resigning," after management said "they expected to be in the 2005 playoffs." Kahn goes through a litany of reasons why McMillan supposedly was unhappy with this team, so one has wonder how in this atmosphere McMillan transformed from a mediocre coach to a great one.

Oliver certainly was not responsible for the distinct style the Sonics played with this season - a style that did a masterful job of exploiting the talents of its very good role players. But I think his numbers helped the whole staff have more confidence in this unorthodox approach. Oliver, like a lot of the players on the Sonics, was by no means a superstar with all of the answers; this was no Moneyball repeat. But he played a role and played it well. And if a stats expert can do that, he is earning his way.

That ideally is how a team uses a stats expert. Not to run a team as in the Moneyball world of baseball. But as a role player who works hard to become a good basketball person and makes all of the basketball people around him better at what they do. As a role player who can help make sense of advanced methodologies and concepts in basketball statistics. More importantly, as a role player who can help put data in the right perspective and understand when to pay attention to the data and when to ignore it.

This final point is greatly underappreciated. If there is anything my experience teaching and working with stats has taught me is that non-stats experts spend ungodly amounts of time looking at stats that are more misleading than useful. (Although highly trained "experts" can be worse if they don't understand basketball very well. Or if they just do not have good intuition for data.) I just cringe when I hear of teams using plus/minus data in ways that are almost surely more distracting than helpful.

At the end of the day, using stats wisely is about making good judgments. And it seems quite a risk when teams rely so heavily on stats "experts" with very little statistical training (or experience) and/or limited basketball knowledge.

[I will add more to this later in Part II.]

Last updated: 11:00 PM, July 14, 2005

How will the new NBA collective bargaining agreement and new luxury tax rules affect the free agent market?

2005-07-06T13:00:00.000-04:00

By Dan T. Rosenbaum

The league and the union are still hammering out details on their new collective bargaining agreement (CBA), but heading into crunch time, it appears that the league is making a game of it. The league got concessions on a handful of non-economic issues, but the economic issues tended to fall in the players' favor. This new deal removes some of the teeth from the luxury tax (how much is still an open question), but guarantees a luxury tax in every season and at a lower threshold than in this past season. The salary cap increase likely will more than offset the changes in maximum contract lengths and raises.

Overall, I am now uncertain how to assess this deal. If the luxury taxes are evenly distributed to all 30 teams, then this was a big win for the players who will likely receive more than 60 percent of basketball-related income (BRI) over the life of this agreement - an outcome that will put a lot of pressure on owners during the next round of negotiations.

If the luxury taxes are distributed in some other way, then I think this it is very possible that this deal was pretty fair for both owners and players.

First, let me lay out the major provisions of this new deal. (I borrow heavily from David Lord at DallasBasketball.com here.) The provisions in green should significantly increase the overall compensation of the players, while those in red should decrease them.

The luxury tax will stay as is - dollar-for-dollar on teams above the 61.1% of BRI threshold used prior to 2004-05, except that the new deal guarantees that the luxury tax will be triggered in every season of the deal. [Note that this season the threshold was at 63.3% of BRI.]
All teams (including those who pay tax) under the new deal will receive a full share of the escrow tax collections. I have seen conflicting reports of what will happen with luxury tax collections. [In the old deal, they received amounts that were reduced or eliminated entirely, according to their spending level.]
Luxury Tax Amnestry Provision (Allan Houston Rule): This summer, teams will be given a one-time opportunity to waive one player and eliminate the luxury tax on any future contractual payments to that player. The salary will still count towards the salary cap, and payment will still have to be paid to the player according to the contract, but the team will not be subject to tax on that player’s contract. [Speculation is that this luxury tax amnestry provision will also apply to previously waived players, but not players traded for after June 1st.]
Luxury tax exceptions will be added in some as-yet-undisclosed fashion for minimum salary players.
The salary cap and luxury tax exceptions for players who are deemed ‘permanently injured’ will begin after one year rather than two.
The escrow tax on player salaries will be reduced from 10% in year one, to 9% in years two through five, and to 8% in year six of the agreement.
The players will be guaranteed a total of 57% of BRI each year, up from no guarantee. [I believe this guarantee increases in some as-yet-undisclosed fashion as overall league revenues increase.]
The escrow tax will only be retained by the owners to offset salary costs when total salaries exceed 57%, just like in the last season of the prior deal, but in the new deal that threshold will be raised if overall league revenues increase in some as-yet-undisclosed fashion.
The salary cap will be set at 49.5% iof Basketball Related Income (BRI) in 2005-06 and 51% thereafter, up from 48.04%. That means last year's salary cap of $43.87 million will likely go up to the $49 to $50 million range this summer, once revenue increases are factored into the equation. [Presumably, maximum salaries will increase, since they are tied to the salary cap.]
Gilbert Arenas Provision: Restricted free agents in their first two seasons can be offered contracts above the MLE by teams with salary cap room, but in the first two seasons of such deals players will be paid the MLE. After the second year of the contract, the contract can increase to the maximum allowable salary for that player. This provision allows a player's original team to match any offer and retain him as long as they have their MLE available. Example: Suppose Chris Duhon is offered a contract of $10 million, $10.8 million, and $11.6 million in years 1, 2, and 3. He would be paid the MLE in the first two seasons and $11.6 million in year 3. But only a team with $10 million in salary cap space could offer such a contract. [Presumably, the cap holds in the first two seasons of such contracts are $10 million and $10.8 million and not the MLE. It is unclear how the luxury tax would apply to such contracts.]
A team will have 7 days to match an offer for a restricted free agent (down from 14).
The maximum length of a new contract will now be 6 years for a player who signs with his current team (down from 7), and 5 years for a player who signs with another team (down from 6).
The maximum annual raises on a new contract will now be 10.5% of the first-year salary (not compounded) for a player who signs with his current team (down from 12.5%), and 8% for a player who signs with another team (down from 10%).
First-round picks will be given standard contracts with two years guaranteed (down from 3), followed by two years of team options (up from 1). The contract amounts will remain standardized. [Presumably, the option for year 3 would have to be picked up prior to year 2. This is very early to give up on a rookie, so it is likely that teams would decline this option very rarely.]
There are no changes being made to the general salary cap exception mechanisms which allow teams to exceed the salary cap to add players, such as the Bird Exception, Million Dollar Exception, Mid-Level Exception, etc. [I presume there could be changes to the formulas used to compute these exceptions.]
For teams over the salary cap, trades will be allowed as long as they trade away as much first-year salary as they receive within 25% (up from 15%) + $100,000.
Base-year compensation (BYC) rules, for trades involving players who just received a sizable raise, will be relaxed in some as-yet-undisclosed fashion. [I have heard that BYC status will end at the end of the moratorium the following season rather than a full calendear year later.)
Minimum salary levels will be increased by 3.5%.
Teams will be required to have an average of 14 players (up from 11) under contract. [I have heard teams will be required to have 13 players with an unknown maximum. I am not sure what mechanism there will be to guarantee an average of 14 players.]
The active roster will still be limited to 12 players, but the designation for the others will now be ‘inactive’ rather than ‘injured.’
The NBA age limit will be 19, and one year past high school for Americans, based on calendar year. [There is likely to be a related league rule implemented that prohibits NBA scouts and personnel from scouting any high school games.]
The NBA Developmental League (NBDL) age limit will be 18, down from 20.
Teams will be able to send players with less than two years experience to the NBDL for needed development during the year, while still retaining full rights, with the ability to recall any such player at any time as desired. Such players will receive their full NBA pay.
Teams will be able to send an assistant coach to their associated NBDL team to work with and monitor the development of their players.
Players will be subject to as many as 4 random drug tests per year (up from 1), with penalties increasing for failing a test on a 4-strike system (5-10 games, 25 games, 1 year, lifetime).
Suspensions for on-court misbehavior will be subject to arbitration if the penalty exceeds 12 games (formerly there was no arbitration regardless of length).
There will be a longer-than-usual July moratorium this summer, as the wording on the deal is hashed out, but summer leagues and negotiations with free agents will be allowed to take place during that time without interruption. No new contract signings (except for draft picks) can take place until the moratorium ends this summer.
More money will be added to pension payments for the older retired players, pending approval under IRS regulations.
New rules begin with the new season that starts July 1, 2005.

On the economic issues, the league was able to reduce the lengths of guaranteed contracts and the size of maximum raises, which they believe will rein in costs. But I think rather than reducing costs, these changes will simply redistribute compensation from unproductive to productive players. That is a good thing for both sides (and for fans). Moreover, for maximum salary players these changes in guaranteed contracts were largely mitigated by the increase in the salary cap, which increases maximum salaries. In addition, the increase in the salary cap will increase the number of teams able to offer large contracts, which will push up salaries for all players. All in all, I think this set of changes will increase the share of revenue going to the players, but not by much.

It is the luxury tax (and salary cap) provisions that will most affect league-wide player salaries. The league did get a lower threshold for the luxury tax - the 61.1 percent of BRI threshold used in 2001-02 through 2003-04, which is down from the 63.3 percent used in 2004-05. Also, the new deal guarantees a luxury tax in every season. Altogether this lower luxury tax threshold and certainty of the luxury tax being triggered should help control spending.

That said, the big enchilada in this deal is the change in how luxury and escrow taxes are distributed back to the teams. In the old deal the bulk of the $300 million or so a year (in luxury and escrow taxes) went to teams below the luxury tax threshold. This resulted in the first $3 to $4 million spent above the luxury tax threshold costing teams $3 to $4 million in luxury taxes and $8 to $10 million in lost distributions. That, in effect, was a 300 to 400 percent effective tax rate for spending just above the luxury tax threshold. That got teams attention and for some teams made the luxury tax threshold a "hard cap."

In the new deal, escrow taxes reportedly will be distributed evenly to all 30 teams. It is uncertain how luxury taxes will be distributed. Under an even distribution of luxury taxes to all 30 teams, the effective tax rate would only be 100 percent for spending just above the luxury tax threshold. This lower effective tax rate would result in more teams blowing past the luxury tax threshold when they believe that an extra player or two significantly increases their chances of success.

Under a distribution tilted towards teams below the luxury tax threshold, we may see the return of effective tax rates above 100 percent. They almost surely will not reach the 300 to 400 percent effective tax rates in the old deal, but even a 200 percent tax may be enough to rein in spending for many teams. It is possible that the league also could reduce distributions only for teams spending well above the luxury tax threshold. This would, in effect, be a back-door "super tax."

Added to this, the luxury tax amnesty provision and luxury tax exceptions for injured players and minimum salary players will reduce the exposure of high-spending teams to the luxury tax. By being able to shield tens of millions of salary from the luxury tax, these teams will feel more free to spend on new players. Also, the players waived under the luxury tax amnesty provision will result in additional "good" players in the free agent market. This also will increase the demand for teams to spend more.

Together these provisions along with an even distribution of the luxury taxes would remove the teeth from the luxury tax, resulting in more teams being willing to pay a little luxury tax and in high-spending teams feeling more free to be aggressive in their free agent and trading activity. (The relaxation of trading rules also will help aggressive teams in this regard.)

But again, a lot of this hinges on how the luxury taxes are distributed. The luxury tax tiger may not have lost all of its teeth.

And as mentioned above, the salary cap will increase significantly, which will result in more teams below the salary cap and teams below the salary cap having more money to spend. If the luxury taxes are distributed evenly, the luxury tax changes will result in middle- and high-spending teams being more aggressive in the free agent market, while the salary cap increase will result in lower-spending teams being more aggressive.

All told, if luxury taxes are distributed evenly to all 30 teams, these changes should result in players' salaries rising signficantly. (And this ignores the reduction in escrow tax over the life of the deal.) Counting all salaries (including those for injured players that do not count towards the salary cap), here is the share of BRI that players received the last few seasons and my predictions for 2004-05 through 2006-07.

Players' Share of BRI (After Escrow Tax is Paid) Under Even Distribution of Luxury Taxes

2002-03: 60.1%
2003-04: 59.3%
2004-05: 58.1%
2005-06: 61.7%
2006-07: 60.3%

As you can see, the players' share of BRI had been declining under the old deal as teams "got religion" about the luxury tax. But if luxury taxes are distributed evenly, my prediction is that the new deal will undo much of the spending restraint of the old deal, resulting in the players' share of BRI rising above 60 percent. That will put pressure on owners to drop that percentage in the next round of CBA negotations, six years from now.

If luxury taxes are not distributed evenly, then the effect on the free agent market and players' share of BRI would depend heavily on how they distributed the taxes. But my guess is that under this scenario, the players' share of BRI would be much less likely to rise above 60 percent.

But that leads to an obvious question. If the luxury taxes being distrubted evenly would so result in the deal lopsidedly favoring the players, why would the owners sign off on this deal?

Well, first of all, I don't know if the owners have formally signed off on this deal and Chad Ford of ESPN.com has reported that negotiations over details to the new deal is going "slower than expected." That said, I have heard nothing to indicate that the deal could unravel.

Second, as I have discussed in the NY Times and in my luxury tax piece, the luxury tax under the old deal likely caused a lot of dissension among low- and high-spending owners. That dissension may have eroded David Stern's bargaining position. I would not be surprised if the union reached out to high-spending owners during this negotiation process, since if the luxury taxes are distributed evenly, high-spending owners were big winners in this deal.

In addition, because of the loss of revenue in the 1998-99 lockout, the players' share of revenue skyrocketed to around 65 percent during the first few years of that deal. The owners may have been apprehensive about a repeat of that worst case scenario. In contrast, fewer than half of the NBA players were around for the last lockout so the repurcussions of a lockout may not have scared them as much.

All of this leads to a second question. How come we do not know how the luxury taxes will be distributed, especially since this seems to be such a critical issue?

I am bewildered by this. How luxury (and escrow) taxes are distributed is critical to the bottom line and decision-making of teams. Without knowing the distribution formula, teams do not know the costs of signing free agents or making trades. And my impression is that they are not banging down doors to find out. This suggests that teams either like uncertainty or are still struggling with understanding the full implications of the luxury/escrow tax system. I find both explanations implausible and figure that there has to be something else that explains this behavior. But figuring out what this "something else" is is beyond this writer's mental capacities.

Last updated: 9:00 PM, July 22, 2005

What will the salary cap, luxury tax threshold, and mid-level exception be in 05-06 and 06-07?

2005-07-05T16:23:00.000-04:00

By Dan T. Rosenbaum

Every year during July it is a big mystery where the salary cap is going to be set. Now, according to reports about the new collective bargaining agreement (CBA), we will add to that mystery by having the luxury tax threshold also being set at this time.

Under the rules in the previous CBA, along with the reported changes in the new CBA, here are my predictions of the salary cap, luxury tax threshold, and mid-level exception over the next two seasons. (I discuss the calculations more below.) Now, of course, if these assumptions about the new CBA are way off, my predictions would need to be amended.

2005-06

Salary Cap - $51.0 million (range of $50.0 to $52.0 million)
Luxury Tax Threshold - $61.9 million (range of $60.8 to $63.0 million)
Mid-Level Exception - $5.18 million (range of $5.10 to $5.25 million)

2006-07

Salary Cap - $49.4 million (range of $47.0 to $52.0 million)
Luxury Tax Threshold - $59.9 million (range of $57.0 to $63.0 million)
Mid-Level Exception - $5.66 million (range of $5.35 to $5.80 million)

Yes, you are reading this right. I am predicting the salary cap to be higher than the conventional wisdom of $48 to $50 million this season and then drop quite a bit in 2006-07. In fact, if basketball-related income (BRI) is low enough to generate a $48 to $50 million salary cap, then I expect there to be a luxury tax in 2004-05.

That makes me think that revenues came in about as expected or better than expected, which would likely mean a salary cap of $51 million or higher. (But if revenues came in lower than expected, then a luxury tax in 2004-05 is a possibility.)

The reason for these misforecasts of the salary cap is due to peculiarities in how the league computes projected BRI, which is a key component of salary cap calculations. These peculiarities are not well understood by many teams. Thus, last season several teams were surprised when the salary cap was barely changed, despite the fact that it was reasonably predictable beforehand.

The higher-than-expected salary cap this season is likely to throw fuel on a red-hot free agent market this summer. Teams below the salary cap will have more money available to throw at more free agents. Also, maximum salaries for players like Michael Redd and possibly Larry Hughes, Joe Johnson, Samuel Dalembert, and Tyson Chandler are a given percentage of the salary cap and thus will be higher.

The drop in the salary cap in 2006-07 will reward teams who keep their pocketbooks closed this season. There are likely to be fewer teams with less money below the salary cap next season. This may result in more bargains next summer with the caveat that there does not appear a lot of top free agents available.

My guess is that overall this higher salary cap (and higher luxury tax threshold), along with the lack of free agents available next summer, will result in teams being very aggressive this summer.

Notes about the Calculations

Salary Cap:

Salary cap = [Projected BRI * 0.51 - (29/30) * Projected Benefits]/29, where

29 is the number of non-expansion teams in their first two seasons (equals 30 in 2006-07).
51 percent is the salary cap percentage that was increased from 48.04 percent in the previous CBA.
I am using $114 million and $120 million for Projected Benefits in 2005-06 and 2006-07, respectively.
Projected BRI = Estimated National TV BRI + 1.08 * Previous Season Non-National TV BRI - Previous Season BRI Shortfall.
Previous Season BRI Shortfall = Previous Season BRI - Previous Season Projected BRI. (This shortfall is never less than zero.)

(Note that without that lump sum payment and the accounting quirks that made it count so much in BRI calculations in 2004-05, there likely would be a luxury tax in 2004-05.)

However, because that lump sum payment will not reoccur in 2005-06, the Previous Season BRI Shortfall is likely to be substantial in the 2006-07 salary cap calculations. And that is likely to result in the salary cap falling in 2006-07. (It will also fall because the number of non-expansion teams will increase to 30.)

This adjustment for previous shortfalls is what causes the lumpiness in the year-to-year salary cap calculations. Every other year there is a shortfall and this results in small increases (or decreases) in the salary cap followed by huge jumps in the next year. This is something that could be fixed in the new CBA - something I would highly recommend.

The new CBA also may decrease the 108% multipler for Previous Season's Non-National TV BRI. That multiplier is an artifact of an earlier period where revenues were growing much more quickly. It is because this multiplier is too high that we get the lumpiness in the salary cap.

Note that if this multiplier is changed or the formula for the Projected BRI is changed, then my predictions for the salary cap could be off substantially.

Luxury Tax Threshold:

I think that the luxury tax threshold will now be based upon projected BRI and thus will be known to teams at the time the salary cap is announced. The only difference between the luxury tax threshold and salary cap formulas would be that 0.51 would be changed to 0.6111.

Mid-Level Excption:

Mid-Level Exception = 1.08 * [Previous Season's League-Wide Salaries/(12.5 * 29)]

League-Wide Salaries do not included expansion teams in their first two seasons.
29 is the number of non-expansion teams during their first two seasons.
Only injured players whose salaries do not count for salary cap or luxury tax purposes are not counted in Previous Season's League-Wide Salaries.

Now again, the new CBA could (and should) lower the 1.08 multiplier. It may also change the assumption of 12.5 roster spots for each team. I would not be surprised if that increased to 14. Either of these changes would lower the MLE.

Last updated: 11:00 PM, July 10, 2005

An open letter to the President from the New Orleans Times-Picayune editors

2004-09-04T16:03:00.000-04:00

OUR OPINIONS: An open letter to the President

** Note that the Times-Picayune endorsed Bush in the 2000 election, but endorsed neither Bush nor Kerry in the 2004 election. Thus, it would be unfair to dismiss these editors as liberals looking to pin anything and everything on Bush.

Dear Mr. President:

We heard you loud and clear Friday when you visited our devastated city and the Gulf Coast and said, "What is not working, we’re going to make it right."

Please forgive us if we wait to see proof of your promise before believing you. But we have good reason for our skepticism.

Bienville built New Orleans where he built it for one main reason: It’s accessible. The city between the Mississippi River and Lake Pontchartrain was easy to reach in 1718.

How much easier it is to access in 2005 now that there are interstates and bridges, airports and helipads, cruise ships, barges, buses and diesel-powered trucks.

Despite the city’s multiple points of entry, our nation’s bureaucrats spent days after last week’s hurricane wringing their hands, lamenting the fact that they could neither rescue the city’s stranded victims nor bring them food, water and medical supplies.

Meanwhile there were journalists, including some who work for The Times-Picayune, going in and out of the city via the Crescent City Connection. On Thursday morning, that crew saw a caravan of 13 Wal-Mart tractor trailers headed into town to bring food, water and supplies to a dying city.

Television reporters were doing live reports from downtown New Orleans streets. Harry Connick Jr. brought in some aid Thursday, and his efforts were the focus of a "Today" show story Friday morning.

Yet, the people trained to protect our nation, the people whose job it is to quickly bring in aid were absent. Those who should have been deploying troops were singing a sad song about how our city was impossible to reach.

We’re angry, Mr. President, and we’ll be angry long after our beloved city and surrounding parishes have been pumped dry. Our people deserved rescuing. Many who could have been were not. That’s to the government’s shame.

Mayor Ray Nagin did the right thing Sunday when he allowed those with no other alternative to seek shelter from the storm inside the Louisiana Superdome. We still don’t know what the death toll is, but one thing is certain: Had the Superdome not been opened, the city’s death toll would have been higher. The toll may even have been exponentially higher.

It was clear to us by late morning Monday that many people inside the Superdome would not be returning home. It should have been clear to our government, Mr. President. So why weren’t they evacuated out of the city immediately? We learned seven years ago, when Hurricane Georges threatened, that the Dome isn’t suitable as a long-term shelter. So what did state and national officials think would happen to tens of thousands of people trapped inside with no air conditioning, overflowing toilets and dwindling amounts of food, water and other essentials?

State Rep. Karen Carter was right Friday when she said the city didn’t have but two urgent needs: "Buses! And gas!" Every official at the Federal Emergency Management Agency should be fired, Director Michael Brown especially.

In a nationally televised interview Thursday night, he said his agency hadn’t known until that day that thousands of storm victims were stranded at the Ernest N. Morial Convention Center. He gave another nationally televised interview the next morning and said, "We’ve provided food to the people at the Convention Center so that they’ve gotten at least one, if not two meals, every single day."

Lies don’t get more bald-faced than that, Mr. President.

Yet, when you met with Mr. Brown Friday morning, you told him, "You’re doing a heck of a job."

That’s unbelievable.

There were thousands of people at the Convention Center because the riverfront is high ground. The fact that so many people had reached there on foot is proof that rescue vehicles could have gotten there, too.

We, who are from New Orleans, are no less American than those who live on the Great Plains or along the Atlantic Seaboard. We’re no less important than those from the Pacific Northwest or Appalachia. Our people deserved to be rescued.

No expense should have been spared. No excuses should have been voiced. Especially not one as preposterous as the claim that New Orleans couldn’t be reached.

Mr. President, we sincerely hope you fulfill your promise to make our beloved communities work right once again.

When you do, we will be the first to applaud.