Tom Haberstroh hits a home run:
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The payroll and competitive balance myth
What it means for competitive balance
Of course, we knew all along that the draft is important, but now we see it as an absolutely critical ingredient to the championship recipe. If payroll predicted championships, then the Knicks would have a dynasty by now. Instead, they largely ignored the draft, sold the lottery picks to other teams and look what it got them: a blood-red cell in the winning percentage column.
In order to be competitive in the NBA, you don’t necessarily need to have a lot of money, but you absolutely need to be smart with your money. And the smart money tends to be in the draft. When Stern says the system is broken because of the disparity in payroll, feel free to listen to the Lakers-Kings comparison but also note that the Thunder has been able to fast track success in a supposedly broken system.
Stern strives for a hard cap (or a punitive luxury tax disguised as one) and claims his pursuit is for the good spirit of competitive balance, but a closer examination shows that payroll and winning are not directly correlated.
What we’ve learned is that spending is cyclical. The smart organizations, like all businesses, try not to spend until they need to. As an example, the Boston Celtics’ payroll the year before they formed their Big Three? It ranked 19th in the NBA. The year before that it was 21st. They lost over 100 games over those two seasons.
The NBA might contend that the Celtics weren’t winning because they weren’t spending. But we must be careful about confusing cause and effect here. It may also be the case that the Celtics weren’t spending because they weren’t winning. Why throw big money at free agents when it won’t really move the needle for title contention? Perhaps it is better to keep costs low until you can swing a big trade or increase your chances to land a superstar in the draft (see: Thunder, Spurs, Bulls).
Teams run into trouble by buying average players in a free agency market that usually comes with a “winner’s curse” premium. If you spend money just to spend it, you find yourself in the in-between world that the Detroit Pistons, Toronto Raptors and Golden State Warriors currently occupy. As we’ve seen time and time again, if you want to be competitive, follow the lead of most champions: build through the draft and be smarter with your cash.
Of course, it helps to have more cash, which allows teams to be more flexible and spend when they need to spend. But if there’s a disparity of haves and have-nots in the NBA, the real disparity can be found in management, not dollars.
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In fact, yours truly would go even further than Tom has in this article and assert unequivocally that the REAL disparity of haves and have-nots in the NBA is not found, either, [a] “in dollars,” or [b] “in management”, in a general sense, per se … defined as, “basketball-related decision-making, within a broad sphere” … but, rather, in something which is better defined, in a more narrow sense, as [c] “having the ability to appraise basketball-related NBA-level talent – insofar as selecting players in the draft, and the hiring of a GM and a head coach is concerned – with a high degree of accuracy.”
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