Big Money Blues

Ever wonder why some of the teams with the lowest team salary are also the most successful franchises in the NBA while teams with the highest payroll perennially flounder in the cellar?

I mean aren’t the highest paid players the crème de la crème?

You don't need to recite the collective bargaining agreement to understand that a player’s salary is associated with productivity… more specifically points per game.

How many "Max" salaried players are lock down defenders or league leaders in assists (Kidd and ???)… you'd better be able to fill it up if you want to back up the Brinks' truck.

There’s no hard evidence that the shoe company contracts are tied to performance quotas (ssshhhh) but we are all aware that if the big money players want to wear the big check mark on their sneakers they need to be netting over 18 PPG or the next up-and-comer will gladly fill your shoes (so to speak).

http://img93.imageshack.us/img93/7625/stnashtrophy2950502195qs.jpgSorry Big Ben, your stuff will only get you a token endorsement later on.
These players are driven to score and score big… teammates be damned.
The more selfish you play the more you get rewarded.

Sure there’s exceptions for true team players like Nash, Kidd and Lebron. The guys sporting MVP and ROY awards… Big $'s = Score or have hardware.

But there’s a cost

Since there is very little correlation of high team salaries to championship contention, then what is the problem with showing loyalty by rewarding your productive players?

Unfortunately players that primarily focus on scoring often isolate their teammates (hey what about my next contract) often leading to internal dissention and selfishness on their part (oh my god I better shoot while I get a touch).

Another consideration is injuries. The guys that hog the rock typically garner two or three defenders. They become contortionist trying to compete for slivers of open space while being blindsided from all directions. These studs are taking a much bigger risk than the Michael Curry’s of the association who are content to park it on the arc while they wait for a bone from "Mr. Big Money". What happens when your Ace goes down or becomes a shell of his former talent? How’s that "salary filler" lookin’ now?

We’ll save the laundry list of maxed out players hitting the injury list.

Which brings us to the third component of having one or two "Max" players… the level of talent these GM’s have to surround them with. Journeymen and inexperienced kids on rookie contracts. It’s a recipe for mediocore purgatory… just good enough to not receive a top five talent in the draft, but not good enough for the show. Years of more youth movements until the boat anchor’s contract deal expires.

GM X says "Ya mean I've got five more years of praying to the ping pong gods for being loyal…Anyone interested in my 34 year old gimp with 50 mil left on his contract? How 'bout if I throw in a 1st rounder"

It’s more the norm than the exception.

Selfishness + Injury Risk + Untalented Teammates = Losing Formula

http://img209.imageshack.us/img209/7244/awebberhi1ib.jpg



Please Save me from myself

Back in B.C. (before cap) the league was close to closing it's doors… it was all about big market teams retaining the best players (much like the Knicks today) as only a hand full of teams could stay in the black.

David Stern, a long time legal consultant for the NBA (going back to 1966) became commissioner in 1984 (the year Michael Jordan, Hakeem Olajuwan, Charles Barkley and John Stockton entered the league). They promptly formulated the early draft of the collective bargaining agreement (CBA).

Like him or hate him, Stern helped to preserve financial stability to the association.

Today teams can only exceed the soft cap to sign their own players. The hard cap constitutes a threshold that teams have to pay a penalty for each dollar they exceed the limit (luxury tax).

In today's front offices the salaried capologist is equally important in all trades and Free Agent signings.

Without delving too much into CBA specifics, the crux of the agreement was to share the wealth with small market teams. Even though the Knicks of the league are able to reach unprecedented levels of team salary they still have to pay the more fiscally responsible teams for the privilege of their overindulgence. Therefore allowing the little guys to wade in the free agency pool.

We don’t know squat

http://img93.imageshack.us/img93/1154/ahill4db.jpgIf we fans were the GM, we would have retained Grant Hill for a Maximum contract… given Stack a hefty raise and Alan Houston would be retiring as a Piston in a wheel chair. Oh how we cried the injustice of Stackhouse being moved for Rip Hamilton.

What would our team salary be right now? Would we even have a contender?

Nope, we’d all be fired!

Well, we’re about to hit similar crossroads again.

Once again there will be unpopular decisions to be made.

There's a definite risk of having veterans growing old together as their salaries in turn rise … which leads us to the current state of the Pistons…

Joe can say all of the right things about Mr. Davidson but we have seen no evidence that he's willing to pay maximum salaries for diminishing returns… will he be satisfied having Ben Wallace coming off the bench making $18,000,000 that year?

In one year and five months we’ll have our answer whether "Mr D" will dip his billion dollar toes well into the lux tax arena. That’s the day when our MVP candidate Chauncey Billups becomes an Unrestricted Free Agent. If Joe moves a veteran for an expiring contract we’ll know what's up.

Early projections from salary cap expert Dan Rosenbaum has the luxury tax for 2008 to be in the 59.9M range and a soft cap at approximately 50M (he’s predicting a drop in basketball related revenues).

Needless to say, Mr. Davidson’s beloved Piston's overhead is about to take a steep hike.

What’s Our price of Loyalty?

http://img83.imageshack.us/img83/4566/250pxbenwallace1eo.jpgCertainly Ben is the face of the Pistons. Streams of "hard work" and "effort" clichés swirl through the cranium. When it comes to Ben, it's simply a mutual admiration society from the fans, management and the media… he represents all that is good on our championship caliber squad.

When it comes to Ben, for once it should be cap be damned.
For every $ Mr. D will go over the luxury tax he's made back in merchandise sales, TV revenues and gate receipts direct contributions from "The Body".

The bond between Ben and Detroit is simply irreversible. He has earned the right to have a recliner and a beer at the end of the bench when he reaches the age 36. There will be a life long position for Big Ben in the organization… whether it's Arnie's (Arnie Kander) right hand man or the VP of Bobble head distribution, we’ve gotcha covered big guy.

As for Ben's next contract, it may make sense to give him a front loaded deal and a lower salary for the remaining years. He can use current value of money for investments. Joe covered next years cap room when he traded for Cato’s expiring contract.

This brings us to the rest of our players reaching their prime at nearly the same time… McDyess, Chauncey and Rasheed. Should they deserve the same commitment as Ben? This is where we reach the proverbial fork in the road. The road to the left leads to temporary satisfaction and inevitable destruction. The other path leads to early criticism and longer term success. Joe has always taken the "right" path at the right time.

Never has he faced the level of salary that’s peeking just around the corner. In two years the team salary will easily approach 70+ million with three starters at 33 and Chauncey at 31. Is Chauncey going to be able to hold down his speed position at 33-36 years of age? In all likelihood these players will lose ½ a step and potentially become defensive liabilities.

Why bring this up now? Hey we’re in a championship run possibly for the next two to three years!

The reason is that GM’s can not afford to wait until their players are past their prime and expect to receive anything close to fair market value, as compared to when the players still have a pep step in their giddyup (accelerated depreciation ;)).

If we’ve learned anything about Mr. Dumars, it’s that he’s successful in buying low and selling high.

The key this summer will be whether the Pistons are hoisting another trophy. In that case the current core is untouchable for another year. However if the team comes up short Joe may be forced to turn over a veteran or two.

Tayshaun will not be going anywhere. He’ll be a base year player. Meaning that he will have received a raise of over 20%. This triggers the base year status where only ½ of his salary can be counted in a trade for another player’s salary. This makes it difficult to trade him (simplified version).

When that next big trade for one of our prized veterans takes place, we can take solace in the past controversial moves when Joe has worked his magic (or maybe worked over the Magic :eyebrows:). He’s reaching to pick low lying fruit while we’re cherishing our aging apples on the ground.

http://img93.imageshack.us/img93/472/rodmanwedding7rt.jpgIf there’s a lesson to be learned from NBA management’s bungglemania it’s that you don’t make long term marriages with top tier salaries unless you want to embrace early retirement…

whilst babbling " 'til death do you part…'til death do you part".

Excellent and informative article Merc. I can't say that I've read anyone that gets paid to write about basketball do it better.

Merc, where did you come up with that? Typical of you Merc, more questions than answers.
...One thing jumped out at me, what if Mr D repaid BBen with percentage of what his "gear sales" are? Jersey's etc. The point of making money is to keep making money. Except when you can use it to counter taxes.

Good Piece

With all deals capped at 5 years max we better hope more players are loyal - unless they are from another team and we are trying to sign them.

My guess would be that Ben will get most of the props from Davison since he was the original piece that got things going and is the only surviving Piston from Dumars 1st year.

Sheed/Dyess seem to me to be the most likely to be delt when things start slowing down.

very nice article!

I think it all comes down to "alternative compensation". Loyalty from a player perspective can be interpreted as "valuing winning over money", and loyalty from an organization as "paying for past performance".

The only way loyalty works, is if there is winning. In the fast food media age, trotting out George Gervin or Dave Bing to center court for an acknowledgement of their past service is lost for the most part on today's fans. There is always a new hot draft pick or 11th man on the bench who captures our imagination and creates anxiety amongst fans that if he doesn't get the requisite minutes, he'll leave and flourish elsewhere when in reality, it's faith in the form of more money rather than loyalty for any accomplishments or shared hardships that will be the determining factor in their legacy with the organization.

The reason why I believe in paying Ben is that he has rewarded the fans with effort and winning. It's understood that his past work would be valued in his new contract. Like most commercial transactions, we got Ben at an introductory rate. If he panned out, it's understood we would recommit to him and adjust his wage based upon his level of play. If not, it was understood he would be moved or not re-signed.

Ben is still a marketable commodity. He has off court value to the franchise. It is important to retain assets like Ben who create an identity for the Pistons product by virtue of "being themselves".

And Joe needs to "do the right thing" because credibility as a GM with players and their agents will pay dividends down the road. You can't buy loyalty, and you can't buy trust. Or maybe you can.

Joe has taken this place from a team in a cold city that noone would want to be caught dead playing for to an organization that is respected across the world. The Pistons cannot slight Ben and think that they will be able to continue to sign players for below their market value. The Pistons must sign Ben in order to secure the present and the future even if it costs Mr. Davidson some luxury tax dollars in the long run.

I agree, informative and well articulated piece Merc.

I also think that JoeD has been fairly good at using the "external validation" technique as value added tangible compensation. I mean c'mon what are NBA Championships really worth?

These guys start playing ball in their driveways, by the time they're thirty some have already been playing for 20 years. It's all about the win when you're young and you're schooled that way for the next decade. For most it's all about the win through high school and college, regional championships, state championships, conference championships, ncaa championships.

Then - the money games begin. NBA Division and Conference champions and finally the NBA ring. I think Dumars has played his 'sacrafice for the Ring' song par excellence. He seems to have assembled guys that know the difference between 6 mil a year and 7.5 mil is huge come April. How much money is enough money? Really, how much?

In an era when rookies are signing contracts for more money in a single season than Zeke or Laimbeer got in their final multi-year deals, it seems the financial security issue for many has been resolved before their first tip-off.

I think Big Ben gets a deal that tops out at 10+ change plus some additional incentives per future playoffs. I think bbbbillups gets the same. Only time will tell...

Great article Merc,

Ben deserves it, Dumars and the fans want it, and it's the ONLY right thing to do.

If the Pistons failed to take care of Ben, our reputation throughout the league would be mud.

Well yes, this is what JD did, he bought loyalty by removing competition for minutes allowing a player to maintain his stats.
Darko Hijacking

Everyone says it a lot and it can be really hard to keep the full implications in mind, but NBA teams are businesses. Any business’s first loyalty is to its shareholders. In most NBA cases that’s a principal owner or a small consortium of owners. The business exists first and foremost to make money for the owners.

Second thing you have to finally admit is that most teams are not managed to win championships. Most are managed to get some fans in the doors and to be credible playoff contenders which is required to keep fans coming back. With TV revenues split and salary cap tax dollars and other revenues flowing back down to all (hell, it’s practically socialist), teams are rewarded for making the whole league stronger, not for actually winning championships. And the base tenet of all human behavior is that what gets rewarded gets done.

The NBA is an entertainment product with a monopoly hold on the talent required for make it run. Yes, players can strike and shut things down for a while, but in the end, they know they have it good. Not too many labor pools out there with an average salary over three million.

When Shaq gets $25 million plus a year, there is a lot of lip service about winning championships, but the ownership will consider it a good value even if they never make it out of the East as long as the arena sells out and they can pick up enough second tier players each year within their budget to keep things competitive. Minnesota drops a lot of dimes on KG to bring in 17k folks a night and feels bad in the papers about never getting out of the first round, but happy in the back room with only the 10th highest payroll in the league. ($5 million more than Detroit.)

Now there do seem to be some teams that play for more than the owner’s pocketbook. While I have minimal knowledge of Mr. Davidson (or any owner for that matter – we don’t seem to run in the same circles, though I did once meet Abe Pollin), he does seem to have other motivations than growing his own peanut, and fortunately for the hardcore fans, winning championships seems to be one of them. The Spurs, the Mavs, maybe a couple of others seem to me to be about winning championships first. Unfortunately, that’s not the game the rest of the league is playing and it makes it hard to compete when your assets are being told by the monopoly that good enough is just that so you may as well go for the money first.

Well, I seem to have rambled a bit far from Mercury’s fine post. Maybe I can drag it back around. We are asking ourselves if Ben deserves a big contract even though his skills may deteriorate before the contract dwindles down. Same for a couple of other key guys. Guys who haven’t done very well in the endorsement game and heavens forbid, actually rely on their day job to make a living. Guys who have made a difference not only in terms of putting butts into seats, but in terms of winning the ultimate prize, regardless of whether or not that is the goal of the league. Guys who have been good citizens and so forth. If the Pistons offered less and Ben took someone else’s money (with hopefully his second ‘ship just under his giant gold belt) would we say he wasn’t loyal? Or is he just being practical? Would we say the ownership wasn’t loyal because they didn’t choose to overpay for an aging superstar?

From where I sit, I’m not sure you could say anything bad about either. Ultimately Ben has to do what is best for Ben. He has to face his family and his conscious. Same for Mr. D and Joe D plus they have the media and assorted pundits to answer to. Years of Ben and Chauncey well past their primes (which I’m hoping is several years out at worst) might still put butts into the Palace’s seats. Hard work and some luck on Joe’s part might put other pieces in place to insure more runs at the championship, but most likely the franchise will have to choose one path as being more likely than the other. You pay your money and your take your choice.

Excellent info, and gives all Pistons fans something to think about. We have all applauded Joe D and his unheralded moves thus far. I am sure he will do what`s right for this franchise amd keep us a contender for years to come. I can`t wait to see the moves he will pull next!

DBA, look at the business aspect. Say you have an excellent co. and the shareholders are happy. But you see chance to make the co. even better by disannexing a current piece and annexing another piece. Risk vs reward. By losing a functional piece does it hurt the rest of the co. And by adding the new piece will it hurt the "base" co. My guess is JD choose loyalty to the functioning group at mininal risk rather than go for gross profits in the near future.

Not at all TheeTFD. There will be other players (like our two 2007 picks) coming down the pike. What Joe did is elect to renovate rather than rebuild during the Christmas rush.

My point to dba was we took the safe route. Even if Darko wasn't the second coming of Larry Bird ;we lost a chance at gross profits.
And what is a PM is to stay a PM!

Thank you for this very enlightening article. Wow! It crossed my mind that very few people (in SA anyway) know that David Robinson is one of the Spurs owners. So, how about offering Ben an ownership in the Pistons? That would acknowledge his value to the organization and also give him some bucks (maybe a lotta bucks) not dependent on his health and athletic ability. I don't know what kind of deal Robinson has, but in light of this article, it seems like it might be a good deal.:nod:

Great article, Bro Merc...but all I could think of while reading was a line from my Number One movie of all time.."The Big Chill" by Jeff Goldblum...I've learned to never write anything long enough that the average person can't read during the average crap!":nod: Luv Ya!

Bruddah HQ, you gotta read it in installments.

Is it unusual to go with a front heavy contract? Its seems the opposite of the usual step increase contracts.