“All right, what do we think? What do we know? What can we prove?” –And the Band Played On
Friend of the blog, Andres Alvarez (He of nerdnumbers & Automated Wins Produced) comments:
Arturo,
Loving it! So as a GM would you agree with the following strategy. Find a superstar player, position doesn’t matter but age does. Now try and fill your roster “around” the player is the order of Center, Point Guard, Power Forward, Small Forward, Shooting guard. Also try and add depth to your roster in the following order. Would such a strategy work as a general heuristic? Last but not least hope the league isn’t super awesome your year (sorry Utah!).
This is not the first time something like this has been asked and it made me think of writing down a simple algorithm of how I would build and run an NBA team for success. So what follows is the “Build me a Winner Algorithm” for the NBA take 1.
A winner? Whatever you say Mr. Steinbrenner.
Basics
This article uses Wins Produced and WP48 [Wins Produced per 48 minutes] to evaluate player’s performance.* This measure uses three key components to evaluate a player:
- The player’s per minute box score statistics
- The player’s team’s per minute box score statistics
- The average performance at the player’s position (PG, SG, SF, PF or C)
A full explanation can be found here. To give a general scale, an average player has a WP48 score of 0.100. The very best players in the league usually have a WP48 over 0.300. To put this in perspective; an average player who plays a full season at 40 minutes a game would generate around 6.83 wins for their team. In contrast, a player posting a 0.300 WP48 would generate about 20.5 wins at 40 minutes a game over an 82 game season.
I may also talk about the half-baked notion and Wins over replacement Player (WORP).
The Data
Let’s review first: what do we think? What do we know? What can we prove?
- Player value in the NBA is skewed towards points and not possessions stats. Over time this leads to a weak correlation between wins and money spent.Teams are in fact using the wrong stats to evaluate players. There are thus market inefficiencies to exploit. Stealing from my article on the Short Supply of tall People.
- Basketball more than any other sport is a sport about marginal value.
- Wins are a direct result of the marginal absolute productivity of the players on the court as measured in point differential (margin of victory).
- Wins produced uses regression to build a causal model for wins based on the statistics available in the standard boxscore.
- There are multiple factors and contributions (let’s call this player productivity) that go into scoring a point and the boxscore reflects a significant portion of these factors.
- Wins are a function of Point differential
- Point differential is a function of Player Productivity as measure in the boxscore stats and actually it’s a function of marginal player productivity (i.e. how much better your player’s on the court are than your opponent’s )
- Wins can thus be modeled as a function marginal player productivity
- Wins Produced uses regression to build that model and can be shown through correlation to be successful.
- The Short Supply of Tall people. Big Men (F/C) are on average more productive than everyone else . They in fact account for 50% of all productivity. This makes it harder for a center to be better than the average and thus accumulate wins in our model but this is not out of step with the reality of the situation. Teams also have a lot more at risk with their big men. It’s also much easier for a team to accumulate negative value at center and power forward because there is much more at risk.
- The Short Supply of Ball Handlers. Average Center and Point Guards have over time been much more valuable to teams than any of the other positions. Over the last 5 years the difference between an average center and a replacement level one is 4 more wins than the same at shooting guard (and 2 at Point Guard). The short supply of tall people is really not a surprise however the short supply of ball handlers is.
- Peaks for the players are skewing older over time (in fact the data is deceptive because it includes active players who may have not hit their peaks yet). In fact if I look at players born since 1970.You see the most players (32 out of 178) hitting their peaks at 28. What does this mean? It means that if you’re a GM signing a guy coming off his rookie contract (say 24 or 25), You can reasonably expect equal or improved performance over the course of a 5 year contract (thereby justifying a % increase from the base Year). However if your big Free Agent signee is 29 or over? You’re probably out of luck .
- The best individual seasons generally come from players playing with the team that drafted them (or the #$$%@%@ Lakers)
- The draft is not a place for quick fixes. Impact rookies are a rare breed. There have been 330 rookies selected in the top 10 since 1977and less than 15% of these rookies – who were generally considered “hot prospects” – have made substantial impact (>8 wins) his rookie season (and only 13 of the 33 players chosen with the first pick). If we look at the top 25 draft picks ever, the average pick of the top 25 is 12.24. Only 3 were the top pick (Magic, Robinson & Shaq) and only seven were in the top 3 picks (and none at number 2). This, and the fact that 8 of the top 25 were picked at 20 or later, strongly suggests the league in general is not very skilled at pinpointing incoming talent. The probability of getting no value or negative value from a draft pick fluctuates around 30% , however Impact players (Superstars & All time greats) are coming into the league at an increasing rate. This would help explain the fact that the quality of basketball seems to be at it’s highest levels in recent years (see here).
- The number 1 pick can and has been flubbed massively. 10 of the 30 #1 Picks fall in the second half of the rankings. The list includes some old WoW friends:
- Mark Aguirre
- Allen Iverson
- Kenyon Martin
- Glenn Robinson
- Kwame Brown
- Joe Barry Carroll
- Joe Smith
- Kent Benson
- Michael Olowokandi
- Andrea Bargnani
- Drafting Players under 20 is an extremely dangerous game. Only 13 of the top 200 players were aged 19 or younger at the end of their first NBA season
- Dwight Howard
- Tracy McGrady
- Kevin Garnett
- LeBron James
- Andris Biedrins
- Luol Deng
- Tyson Chandler
- Josh Smith
- Rashard Lewis
- Chris Bosh
- Kobe Bryant
- Cliff Robinson
- Andrew Bynum
- The Half baked notion that what wins in the regular season is not necessarily what gets you the trophy. The difference? Minute allocation & how wins produced are affected by that allocation. We continuously hear terms like playoff rotation & playoff minutes thrown around come playoff time. The half baked notion tells us that a good deep team filled with average and above average players will get you in the playoffs but to get far in the playoffs you need your wins to be concentrated in your Top 6.
- In the Regular Season:
- Your starting five account for 82% percent of your wins.
- Your second unit is important over the course of an 82 game regular season accounting for 18% of your wins
- After that everybody else is statistically meaningless.
- In the Playoffs :
- Your starting five account for 94% percent of your wins in the playoffs.
- Only the first guy of your bench matters accounting for 5% of your wins
- After that everybody else is statistically meaningless.
- In the Regular Season:
Build me a Winner
So Based on this knowledge, let’s try to summarize what my management philosophy would be as an NBA GM.
- A wins produced model (such as Prof. Berri’s Wins Produced or my own Wins over replacement Player (WORP)) gives a team a statistical edge over other teams in building a roster by properly identifying a player win contribution with a high level of correlation. My team would be built around just such a model (probably with enhancements for individual defense which as a gm I could design and pay somebody to data enter) and identifying underrated/underpriced players that are available.
- I’d use picks rather than free agents to keep my team successful both on the court and in the bottom line (See San Antonio and Oklahoma City). The draft is, the best source of cheap labor there is. When dealing with draft picks it is important to remember that you are getting a low cost player for four and not one year and any evaluation of draft picks should go beyond the rookie year. Of the top 100 picks half (and 122 of the top 200 picks) were taken after pick 9 suggesting there is always value in the later part of the draft. The draft is a high stakes lottery but it’s a rigged game for the owners. Salaries are fixed at a discount and the risk of utter failure is relatively low (30%). So we build thru the draft and not thru free-agency.
- Scorers are common and overpaid. I’d flip scorers for picks, picks and more picks see the previous point on draft picks.
- I’d prefer later picks in volume over high end lottery picks. Stars can and are had late in the draft. Picks would be used exclusively on high risk/high reward guys. You don’t play the lottery to win third prize. Second rounders would be used mostly on Euro guys that I could stash and see if they’re any good.
- Hate overpriced free agents but love minimum salary level players. We know that the talent identification algorithm for NBA teams is broken. That means good talent must be available out there and I’d spend money to find it. So I’d buy one (or possibly two) D-league teams to stash, test and develop talent. I’d look into buying a Euroleague team as well. I’d also be the the king of 10 day contracts and call ups. Roster spots 10 and up would be used at least 75% of the time for auditions and talent evaluation.
- Given that the top 6 is what matters for the playoffs. I’d trade three .100 WP48 guys for one .250 WP48 guy in a hummingbird’s heartbeat.
- Big Men and Ball handlers (Centers and Point Guards) are more scarce resources than shooters. I’d pay for skilled labor at those positions and always focus on depth there. This is the central idea behind my own Wins over replacement Player (WORP).
As I said this is a first take on this algorithm and I will probably revisit this over and over in the future. Please provide feedback and comments . As always this is only my opinion and I am the first to admit it could be flawed.You never know, If I get to be an NBA GM, I might hire you 🙂
More ridiculous things have happened
Arturo's Silly Little Stats v2.0 
nerdnumbers
08/31/2010
Arturo,
You overkilled my question (yes or no would have sufficed!) But I am really impressed by the result. I think your experience background would make you a great GM. One thing you have as an underlying theme is your ability to assess your decisions and realize you made a mistake (Flipping picks, trading scorers, drafting until you hit)
That an keeping an economic mind (Minimum salary, rookie contracts, undervalued resources) would give you two skills I don’t think many GMs have. Jordan still hasn’t accepted Kwame is a bust and in Memphis they ADMITTED to overpaying and then later admitted to not even understanding how NBA pay works!
Keep up the awesome work. It would be nice if you could convince an owner to let you take a team for a spin for a few seasons to see how it works, preferably the Nuggets.
Chicago Tim
08/31/2010
Actually, Kwame isn’t a bad deal at the present price.
arturogalletti
08/31/2010
Tim,
Stop reading my mind (I actually have this in the Free Agent Update that’s coming). He’s even better if you use WORP.
brgulker
09/01/2010
As a Pistons fan, I remain baffled that a team in dire need of interior defense and rebounding would essentially bench Kwame for an entire season and let him walk for nothing.
arturogalletti
09/01/2010
He was worth the minimum.
Chicago Tim
09/01/2010
Don’t forget Delonte West to the Celtics in your free agent update. The Bulls may regret passing on West.
arturogalletti
09/01/2010
Excellent. We can get him to wear MILF jersey’s against the Heat.
arturogalletti
08/31/2010
Andres,
Inspiration and the muse are ruthless mistresses. Thanks for the complements. I think you have to be like a shooter and have no conscience and just keep shooting. You can’t form emotional attachments (like Cuban seems to) and you have to not overpay (like the Pats in the NFL). My job is to try to maximize the value you derive from a capital investment. For that you have to keep a no-nonsense attitude.
Mike
08/31/2010
Arturo,
Great post, and basically sums up many of things you’ve been posting on this site. I will refer my friends to this post. That being said, what is the criteria of a “high risk, high reward” player in the draft. How do we identify these players? Also, I think it would be interesting to look at if productive big men can be had later in the draft. I’m sure there are exceptions (such as DeJuan Blair last season) but what I guess what is the likelihood of getting a productive big man from our multiple late draft picks? Thanks!
arturogalletti
09/01/2010
Let me give you four names: Paul,Rondo,Blair and Cousins. All had question marks coming into the league. Paul got passed up by the hawks. Rondo got traded on draft day. Blair got passed up by everybody. By the end of the year, if you offer any of the top four picks from this year for Cousins straight up the Maloof brothers will laugh you out of the Palms.
I’d look for productive/athletic/high skill players who are being passed up for some reason (character,size, being a tall white dude). So for the 2010 draft I love Cousins, Turner,Heyward and Aldrich. Hate John Wall (too expensive and not polished enough to contribute and all my analysis seems to point to ball handling like size being a talent more than a skill). I love what the Celts did in drafting Avery Bradley and Luke Haragondy. They’re both chancy picks with a lot of upside. If they don’t work, you at worst lose a min salary.
Chicago Tim
08/31/2010
The Miami Heat did not build through the draft. Players who deserve more than the maximum salary are the other deals in the NBA, and far more likely to win a championship. Furthermore the top teams have demonstrated that once you have those players, mid-level players will sign for less than market price to play with a winner.
Building through the draft and never paying the luxury tax has, for about ten years, been the Bulls’ strategy, and from a business perspective it has been very successful. However it has not produced a championship team. Last year they ventured back into free agency with great success, although it feels like failure because they missed out on the jackpot prize. Still, from a business perspective they are still doing well, and still not paying the luxury tax.
The Lakers seem to use both free agency and the draft, plus they are willing to pay the luxury tax in order to win a championship. I think the Lakers have to be the model big city franchise.
The Spurs like your strategy of stockpiling foreign players, and have done quite well there. But they also were lucky enough to draft a couple of great players in Robinson and Duncan, and over the years have built their team around those rare superstar big men. They have to be the model small market team.
Chicago Tim
08/31/2010
What about the D League? If the idea is to use a high volume of players in an attempt to strike gold, maybe the undrafted players of the D League are an underappreciated bunch. And they can be rotated in and out during the season. I think every team should hold open at least one spot for D League players on ten-day contracts, and probably should own a team which runs their plays. That’s the baseball model, of course — develop a farm system.
arturogalletti
09/01/2010
Tim,
The Heat have Haslem and Wade as two of their top six (granted Haslem was undrafted)
Once you find great players you have to pay them (but not overpay them). That’s going into rev.2 (which’l be up today). The Lakers have the best record of any team at getting wins through the draft and San Antonio from undrafted guys and the D-league. (this is in a post which is sitting in my hard drive and I may have to put up on sunday)
Didn’t I say that I’d buy a D-league team or two and maybe an Euroleague team?
Chicago Tim
09/01/2010
So sorry, you did say you would buy a D-league team. Somehow I missed that.
Miami does have Wade, but this year they signed him as a free agent. I’m not sure that counts as building through the draft.
Even if we count Wade, Miami generally focuses less on the draft than any other successful team. They can get away with it because they have an attractive setting for NBA players and an appealing, canny GM with a record of success in Riley.
nerdnumbers
08/31/2010
Tim,
I would also argue Chicago has done some bad moves with who they hang on to. They let a reasonably priced Artest go as well as Chandler. They have done very well in the draft honestly but their decisions about who to keep and let go have been sketch (Deng, Heinrich). I suspect Rose is more likely to get big money and held onto over Noah going forward to.
Chicago Tim
08/31/2010
nerdnumbers
I agree the Bulls have made some strange moves in the past. They could have pursued their strategy of developing underpaid rookes with even more success, holding on to some of the rookies they let go, and letting go some of the rookies they signed. But they still would have been making money primarily by underpaying players on rookie contracts. And even when they pursued that strategy badly, they still made more money than most teams in the league. Their fan loyalty is quite remarkable, and much of it is based on the constant refrain that this next batch of rookies is the real deal.
This last year marks a big change in strategy, betting everything on the free agent market, and even though they missed the biggest prize they did quite well for themselves. Furthermore, they have a chance of turning into something special, if Rose develops into the superstar everyone thinks he already is. But yes, if Rose continues to be overrated, there’s a great danger he will be overpaid.
I guess my point is that relying on underpaid rookies can be a savvy move from a business perspective, and may even be a good way to roll the dice on finding a superstar, but it’s not a good way to win any immediate championships. For immediate championships you need to trade for or sign veteran superstars.
arturogalletti
09/01/2010
Tim,
The point is that they actually paid for value. Reinsdorff has not overpaid for scorers and he actually went for value guys. This tea mshould be a winner for a long,long time.
Chicago Tim
09/01/2010
My fear, though, is that Rose will not improve, they will grossly overpay him, and the team will never go from “winner” to “champion.”
Devin Dignam
08/31/2010
Arturo:
Excellent summary of all your recent findings.
It just so happens that everything on your list of management philosophies is on my own personal list as well (thanks to some of your findings).
When you inevitably get that NBA GM job you are looking for, if there are any underling vacancies, give me a shout. While you won’t need me for decision-making, I can be there for…emotional support?
R
09/01/2010
“Point differential is a function of Player Productivity as measure in the boxscore stats …”
And defense and offense affecting non-boxscore actions.
“I’d prefer later picks in volume over high end lottery picks.”
I think I disagree though it might be useful to see the average draft number of the leading player on teams who won the championship.
“Scorers are common and overpaid. I’d flip scorers for picks, picks and more picks see the previous point on draft picks.”
When do you stop and take your scoring leadership deep into the playoffs and beat the other best team(s)? I think you have to stop at some point and make your summit bid with 1-3 “scorers”.
Fred Bush
09/01/2010
So, cycle a bunch of young players, d-leaguers, and euroleaguers. Good plan, but it seems like only half of a plan. What is your goal once you’ve identified some talent on your squad and they’re through their rookie contract? What kind of stats does it take for you to lay out real cash for a player rather than flipping him for someone cheaper/more picks?
Which would you prefer — a team with a $40 million payroll you expected to win 45 games, or a team with a $65 million payroll you expected to win 55 games?
arturogalletti
09/01/2010
Fred,
Avg. Value of a win for 2010 was $1.7 Mill. Largest free agent deals on a per year basis were Dirk, Joe J. and Amare (about $20 mill per). To be worth 20 million per a player has to produce at least 11.76 wins per year (or about .188 WP48 at 3000 minutes played). If I build in some safety into this i’d look to pay around $1.5 mill per win and i’d assume 2400 minutes per season. So for a $20 mill per year contract on my team I would like a guys who projects to around 13.33 wins and about .266 WP48 at 2400 MP. I’d be willing to give max money to a guy coming off his rookie contract who gave me that. For an older guy, I’d like to know his injury history and his personal habits (does he drink, smoke,party with Barkley etc.) before giving him the money (and I would always,always,always,always,always,always, always,always,always,always,always,always,always,always,always,always, always,always,always,always,always frontload the contract, always)
brgulker
09/01/2010
Arturo,
Excellent post, and I think it’s a great first attempt. Others have made excellent comments, but the first that comes to my mind is this: of course, it’s difficult to try to project this, but how you would choose to handle contracts after rookie contracts are over would greatly impact your strategy in general.
reservoirgod
09/01/2010
Arturo:
Interesting post. Care to try it out in my fantasy league? We used win score as the points system last season and I’m looking at methods for using wins produced this season.
Man of Steele
09/01/2010
Yes, Arturo, you should absolutely join the fantasy league. This post is great, and I think I’d agree on most points. Where I would differ, though, is in how to handle the draft and in the mechanics of trading overrated scorers for picks. It seems to me that just about every team in the league has a player that is overvalued due to scoring prowess. Even the Spurs, the kings of this kind of team-building, are currently paying an aging Tony Parker a lot of money, and he was below average last year. As you say, due to the ineffective player evaluation grid in the NBA, these overrated players are a prime resource to exploit in building a team. Instead of trading for only draft picks though, I think I would work it like this: trade the overrated scorer for an above average (but underrated) player at the same position and a draft pick or two. For example, the Spurs would trade Parker for Steve Blake and a draft pick. This kind of move would create salary cap room, stockpile picks, and your starting lineup would be no different. Or say you were charge of the Nuggests for instance. You might trade Carmelo for Luol Deng and two or three draft picks. There’s not a GM in the league that wouldn’t take that deal, and your lineup would be no different.
Secondly, I would alter the draft strategy you outlined slightly. I would use first round picks on the best prospect available, whether they are high or low risk, and use second round picks on possibly high reward players (European players, D-Leaguers, underrated players coming out of college). There are typical successful players from the second round in any draft, so it seems to me that the best strategy would be to roll the dice on a potential star in the first round and then stiockpile second round picks in order to find valuable supporting players (and even an occasional DeJuan Blair). I would also emphasize scouring the incoming rookie class for undrafted free agents; they are dirt cheap for at least three years. I think this would really further your method of disposing of players who don’t develop, because first round picks have a long life in the league, even when they don’t deserve it. If after a couple of years a first round pick isn’t panning out, you can trade him for at least a second rounder, if not a first rounder. This allows you to stockpile more picks at the cheap end of the draft and clears roster space for other young prospective players.
arturogalletti
09/01/2010
I’m pretty sure I’m already in your league 🙂
reservoirgod
09/02/2010
Yes, you are already in the league! Hmm, the notification email must’ve got caught in my junk mail. Welcome, Arturo! I suspect it’ll be like playing a game of cards while allowing everyone to se your hand. Should be an interesting season.