Matt Yglesias

The NFL’s Ownership Rules

Stephen Squibb’s N+1 piece on the NFL lockout sheds light on something I’ve wondered about from time to time. How come you don’t see more teams organized as co-ops the way the Green Bay Packers are? Conversely, how come you don’t see teams organized as regular firms with shares listed on the stock exchange? Apparently it’s against the rules in both cases:

It is this kind of public—a universally available and voluntary association—that the league outlawed in 1961, when it stipulated that “No corporation, association, partnership or other entity not operated for profit nor any charitable organization or entity not presently a member of the league shall be eligible for membership.” The new rules demanded that each team be owned by at least one person with a minimum controlling interest of 30 percent. As the value of each team has risen, so has the height of this barrier to entry, which has recently become so high as to trigger a kind of succession crisis in Pittsburgh. There the problem was that no individual Rooney child had enough millions to buy out any of the others in order to create the necessary 30 percent share. Acting quickly to preserve one of its prized aristocracies, the league declared some owners more equal than others, allowing the combined 32 percent stake of the two Rooney boys to count as that of one individual.

This kind of weird protectionism all occurring in a league that benefits from an anti-trust exemption and billions in taxpayer subsidies for stadiums. That leads to a good line:

It has frequently been said that in this country we have socialism for the rich and capitalism for the poor. What the case of the NFL demonstrates so clearly is that what we have, in fact, is whatever the rich want whenever they want it. And whatever they want always gets the same name, free market capitalism, regardless.

This, indeed, is what you see over and over again. “I can’t dump water on David Koch’s lawn” is property rights, and “David Koch can pollute the air as much as he wants” is also property rights; opposing progressive taxation is freedom and pharmaceutical monopolies are also freedom.

Tom Thibodeau

Hollinger:

Yes, Thibodeau’s stuff works. The top defensive assistant in Boston, he was the architect of the Celtics’ system that won a title in 2008 and has largely stymied opponents ever since. In fact, you can argue that Thibodeau owns the top two defenses in the game — the Bulls are first in defensive efficiency, and the Celtics are second.

Before coming to Boston, Thibodeau was Jeff Van Gundy’s defensive guru in Houston, where he posted similarly gaudy defensive stats despite some teams that appear to be rather modestly talented in that department.

I thought it was amazing that Thibodeau didn’t immediately get a head coaching offer after that first season in Boston. His success in Houston you could have attributed to this or that, but when he was able to immediately reproduce it in Boston it seemed clear that he was on to something. We know that NBA players are pretty consistent year-to-year in their box score production, so if you’re looking for coaches to improve something the defense, where the box score sheds the least light, is the place to look.

The “Carmelo” Deal

I think Carmelo Anthony is a widely overrated player, but the deal announced today for the New York Knicks to acquire him seems like a good trade anyway. That’s because they managed to give up assets—Danillo Galinari, Wilson Chandler, and Timofey Mozgov—that aren’t worth a huge amount either. Swapping Raymond Felton for Chauncey Billups at point guard obviously makes you older and darkens the outlook over the long term, but Billups is still the better player today.

Best of all, the Knicks hang on to underrated low volume / high efficiency guy Landry Fields and also acquire underrated low volume / high efficiency guy Renaldo Balkman from Denver. He’s gotten very few minutes from the Nuggets, but he’s been good, and he played more in his earlier stint with the Knicks. A lineup of Billups, Fields, Anthony, Balkman, and Stoudemire as coached by Mike D’Antoni ought to be quite potent mix of complementary skills.

My Problem With PER

From a chat with John Hollinger:

Mike (Chicago)
I know you love PER, but it’s YOUR made up stat. Why should fans trust it when clearly our eyes can tell us that D Rose is playing way better than Paul and when PER doesn’t account for how a player has to play when teammates are hurt?

John Hollinger
I trust you reached this eye test after watching all the Hornets’ games too?

Everybody’s right here. As Hollinger says, statistical measurements are absolutely necessary. You can’t watch all the games or distinguish by eye between a 91% free throw percentage and an 87% free throw percentage.

But it’s also true that Hollinger’s PER formula is an oddly arbitrary mix he dreamed up one day. I think you can easily see this my trying to total PER up and ask what the resulting number is supposed to be. PER, after all, is an individual stat representing a per-minute quantity. So if we take a player’s PER and multiply it by his minutes played, we’ll get that guy’s PERMinutes. Then we can add up all of a team’s PERMinutes and we get . . . what?

The idea of a system like Dave Berri’s “wins produced” is that if you add up all the “wins produced” of the individual 2009-2010 Los Angeles Lakers you get a number that’s approximately equal to the total wins of the Los Angeles Lakers. People can (and have, and do, and should continue to) raise questions about whether the Berri formula is accurately allocating credit for these wins to individuals, and also can (and have, and do, and should continue to) raise questions about the predictive value of these quantities. But there’s no question of what’s being measured. By contrast, what happens when I add up the 2009-2010 Lakers’ PERMinutes:

What is this supposed to be a model of? If you calculated the total team PERMinutes for each time, would the resulting quantities have a strong correlation with team performance? If so, I’d love to see Hollinger work up the spreadsheet.

But I have my doubts. For starters, by definition the average player has a PER of 15. And if you take the Lakers’ aggregate PERMinutes and then divide them by minutes to get a measure of the quality of a statistical construct “Laker,” the team turns out to have a 15.73 PER—just slightly above average. But the team in question won 57 games and the NBA championship.

Wilson Chandler vs Carmelo Anthony

Someone asked for more basketblogging, so I thought I’d take the opportunity to say that I think the value of acquiring Carmelo Anthony is being widely overstated in the basketball press. Like suppose you had to choose between Anthony and Knicks small forward Wilson Chandler, both of whom play 35 minutes per game this season.

Well if you care about rebounds, Anthony is doing quite a bit better, snagging 8.3 per game. His career average is only 6.3 but he’s having a career-high rebounding year right now. Chandler grabs 6.3 rebounds per game. Advantage Anthony. They’re the same in steals, Chandler blocks more (1.4 per game versus 0.6) and Anthony turns it over more than twice as often (1.4 to 2.9 per game). Then of course there’s scoring. Anthony, I’ve been told by broadcasters, is the “best pure scorer in the game” reeling in an impressive 23.9 points per game while Chandler settles for a measly 17.7 PPG. But then again, Anthony’s TS% is only .527 while Chandler’s .579 is considerably more impressive.

Opinions differ about the merits of volume scoring versus efficiency. But Carmelo Anthony is currently paid $17 million to Chandler $2.1 million, so you would need to think Anthony was a lot better for a straight-up swap to look appealing. What’s more, Anthony is currently 26 years old and looking for a maximum extension, meaning that four years from now you’ll be paying him much more, though he’s overwhelmingly likely to be a worse player by then. Chandler will be getting paid more four years from now than he’s paid today, but he’ll still be cheaper than Anthony and he’ll be three years younger to boot. In general, it seems to me that NBA GMs underplay the problems with giving out max deals to Anthony-type players. Given the scale of the annual raises normally built into NBA contracts, a max extension for a 26 year-old is a kind of leveraged investment in a depreciating asset. There are circumstances under which that might make sense, but they’re pretty rare.

Playoff PAC

Here’s a good non-partisan cause for the “No Labels” crowd to get behind:

The lawyers behind the committee, Playoff PAC, seek a playoff system in college football more akin to the N.C.A.A. basketball tournament.

They are not just producing attack ads; they are also going after the bowls’ finances. In complaints to the Internal Revenue Service, they have raised questions involving three of the four bowls that make up the five-game Bowl Championship Series about interest-free loans, high salaries, lobbying payments and lavish perks for some bowl executives. They have also made accusations about illegal campaign contributions.

Most recently, Playoff PAC described to the I.R.S. an all-expenses-paid Caribbean cruise that the Orange Bowl hosted for 40 athletic directors and conference commissioners, and their spouses, although it appears no business meetings were scheduled during the trip.

Perhaps the most damning quick observation you can make about the BCS system is that in the twelve meetings between the number one ranked team and the number two ranked team, the number two ranked team has won the game exactly six times. If #2 is better than #1 half the time, then who’s to say how often #3 hasn’t been better than #2?

The DeJuan Blair Factor

I’m continually blown away by the fact that DeJuan Blair slipped into the second round of the NBA draft. This particularly egregious because it’s not like he was a seventeen year-old playing in an obscure foreign league. He had two college seasons under his belt, and based on his play there his success in the NBA was very predictable. But he slipped because he stands at the intersection of two frequent errors in NBA drafting.

One is an irrational aversion to “undersized” big men. NBA teams correctly note that college success does not directly correlate with NBA success, so beyond raw numbers they look for physical tools that are likely to lead to success. This is reasonable as far as it goes, but different things project better or worse and rebounding in the NBA actually correlates pretty highly with rebounding in college. It’s also true that size helps with rebounding, but the point is that if an undersized player has success at rebounding in college, he’s likely to continue doing so in the pros.

The other issue is injury aversion. Kevin Pelton covered this issue in an article I linked to yesterday, but the problem here is that GMs seem to vastly overrate the value of your average draft pick. There are 30 players picked in the first round of the NBA draft and 30 more picked in the second round. There’s only 30 teams, and in practice most teams play an 8 or 9 man rotation even though rosters are bigger than that. That means that even in the first round there’s a very high ratio of draft picks to rotation spots. And of course some rotation players are actually pretty bad. On top of that, lots of times you draft a good player (LeBron James, Shaquille O’Neal, etc.) and then they leave in free agency. The upshot is that if you get a good year or two or three out of someone before their career is ruined by injury then you’re coming out ahead.

Now of course it matters if you’re talking about the number one overall pick or something. But teams drafting in the second half of the first round have absolutely no business worrying about injuries. What you should be worried about is whether or not the guy you get will be any good at all.

With $8 Million on the Line, People Should Be Paid For The Services They Perform

Nice report on the brass tacks implications of a missed field goal for Boise State:

“Eight million dollars would have come to the WAC if he makes the kick,” Benson said. “That’s the reality of it.”

The Rose Bowl, like other Bowl Championship Series games, touts a per-team payout of $17 million. For teams like Boise State and others in one of the five conferences without an automatic bid, the payout is $12 million, Benson said. Boise State figured to gain $3 million, the other WAC teams would have split $5 million, and the four other second-tier conferences would have split $4 million.

Instead, Texas Christian of the Mountain West Conference is going to the Rose Bowl. Boise State will get part of the $1 million payout in Las Vegas, and the WAC will get a fraction of T.C.U.’s reward.

And of course with all these millions of dollars on the line, the workforce expects to get paid. So the coaches do get paid. And the athletic directors get paid. And so do lots and lots of other people associated with the high stakes game of college football. So why aren’t the players paid? Well, because the schools have gotten together and formed a cartel that’s agreed that nobody should be paid. And if you want a shot at playing professional football, you need to play for the cartel first.

The Miami Turnaround

On November 15, I wrote:

What I actually think, meanwhile, is that Miami’s +9.4 point differential is tied with New Orleans for best in the league. So if Miami doesn’t step things up, we should expect them to assemble one of the best records in the league over the course of the next 72 games. What’s more, the currently injured Mike Miller is an underrated player whose return will help the team a lot.

So my prediction is that Miami will be fine, and by the end of the season sports pundits will be offering us a lot of narratives about the improved chemistry among the big three.

And here’s a screen grab from ESPN:

Right now their point differential is +8.7, which puts them third in the league behind Boston and San Antonio. Point differential based on a small sample size is an imperfect predictor of future performance, but it’s a much better one than win-loss record.

What’s Up With the Heat?

A reader asked me to comment on the surprisingly weak performance thus far of the 6-4 Miami Heat. The issue, obviously, is that the team has no chemistry. With Wade and James on the same squad, there’s no “alpha dog” player. And the lack of such a dog means the team lacks “killer instinct” and doesn’t inspire fear in its adversaries. These guys are friends, they came to Miami together because they wanted to play together. That’s nice, but there’s no friends in sports. A winning team is led by stone-cold assassins who want to beat the best players in the game, not chums who’d prefer to team up and hang out. Something like that.

What I actually think, meanwhile, is that Miami’s +9.4 point differential is tied with New Orleans for best in the league. So if Miami doesn’t step things up, we should expect them to assemble one of the best records in the league over the course of the next 72 games. What’s more, the currently injured Mike Miller is an underrated player whose return will help the team a lot.

So my prediction is that Miami will be fine, and by the end of the season sports pundits will be offering us a lot of narratives about the improved chemistry among the big three. It’s possibly the case that the return of Miller will play a role in this narrative, since him getting on the floor should in fact lead the team to get better. The fact that Miller is a white guy further militates in the direction of underrating his actual basketball abilities, but vastly overstating his ability to provide “veteran leadership” that provides his talented African-American colleagues with the “intangibles” they need to win.

NBA Season Preview

First off let me start by thanking Wizards owner Ted Leonsis for correcting my error in an earlier post. I wrote “Pollard family” when it should have been “Pollin.” The Pollins have been pillars of this community since long before I lived here, so I feel unusually bad about this typo.

More broadly, I’m afraid I’m going to have to say that the outlook for the Wizards as the NBA season begins is extremely bleak. Projections for this to be a somewhat below-average squad involve being (a) unduly optimistic about the recovery of Gilbert Arenas’ knees, (b) unduly optimistic about the performance of John Wall, and (c) probably too optimistic about how good Arenas ever was. Last year’s team was bad, and we’ve now lost a lot of players who were solid contributors. Wall would have to do something totally unprecedented to raise this team to anywhere other than awful. I should note that I say this not out of specific John Wall skepticism, but simply to note that now that very talented prospects don’t stay in college for very long rookies tend to be pretty bad. LeBron James and Kevin Durant both lived up to the hype—eventually—but as rookies were just guys who took and missed a ton of shots.

Beyond that, I agree with Arturo Galletti that the injury to Mike Miller is a bigger blow to the Heat than might be clear at first glance. The way this squad is put together there’s very little room for error. I think questions about LBJ, Wade, and Chris Bosh “coexisting” are overblown. The Eastern Conference playoffs will, however, give us a good look at how much matchups matter since I don’t see anyone on this team who’s going to defend Dwight Howard successfully.

The other thing I think people are kind of sleeping on is the Portland Trailblazers. This was a good team last year—fifty wins—and I don’t think their injury situation is going to get worse. What’s more, this is a squad that, if healthy, has the size and depth to match up with the Laker bigs.

We Are All Pointy-Headed Elites

Via James Downie, it turns out that not only is Charles Murray generally full of it, but elitism is on the rise as NASCAR ratings mysteriously plummet:

“The simple fact is that people just are not tuning in,” said Julie Sobieski, ESPN’s vice president of programming and acquisitions. “We’re looking at everything to find out why.”

Top ESPN executives, including president George Bodenheimer, traveled to Charlotte for the fifth race of the Chase, the Bank of America 500, and engaged NASCAR executives during several meetings. A team of ESPN’s top editorial staff, including Rob King, ESPN digital media editor-in-chief, and Glenn Jacobs, senior coordinating producer of SportsCenter, also attended the race and were given a three-day, behind-the-scenes immersion into NASCAR operations.

Obviously, Barack Obama’s sharia socialism is to blame here. Decent people worry that if they watch NASCAR, their parents will be sent off to the death panels.

Meanwhile, David Frum has a good post on Murray and the real American elite.

Nominal Wage Cuts in the NBA

The best way out of a recession is a combination of expansionary fiscal and monetary policy to bolster aggregate demand. Failing that, you need to have a grinding process of nominal wage cuts and unbalanced deflation that can take years to end and cause massive human suffering in the meantime. David Stern wants the National Basketball Association to do its part to make the dream a reality:

Stern said the league wants player costs to drop $750 million to $800 million. Deputy commissioner Adam Silver said the NBA spends about $2.1 billion annually in player salaries and benefits. [...]

Stern and [Deputy Commission] Silver spoke after completing two days of meetings with league owners, who are seeking major changes to the current CBA that expires June 30. Silver said the league has told the union that owners are in a “diseconomic situation,” with projected league-wide losses of about $340 million to $350 million this season.

Though season ticket sales are up, both insisted that no matter how well the league does at the box office, it won’t change the fact that an overhaul is necessary to a system in which the players receive 57 percent of basketball-related income.

“Even though we reported we have record season ticket sales over the summer and otherwise very robust revenue generation, because of the built-in cost of the system, it’s virtually impossible for us to move the needle in terms of our losses,” Silver said.

This kind of pleading always strikes me as unpersuasive on the merits. If I owned a business that was losing tens of millions of dollars a year, I’d be eager to sell the business for a relatively small amount of money. When the Washington Post Company put Newsweek up for same, for example, they were ultimately willing to part with the firm for $1 on the condition that the new owner assume Newsweek’s pension liabilities. Similarly, when General Motors and Chrysler were revealed to have an unsustainably high labor cost structure, nobody wanted to buy either firm at any price so the government had to step in.

By contrast, when Mikhail Prokhorov bought the New Jersey Nets—by no means the league’s most lucrative franchise—he paid $200 million for the privilege. Ted Leonsis bought the Wizards, a terrible team, from the Pollard family for over $500 million this past summer. The high price of NBA franchises strongly suggests that operating one is valuable even with 57 of basketball-related revenue going to player salaries. Part of the issue is that the teams themselves can be in some ways loss-leaders for businesses whose real profit center is an arena or a cable network. Accounting can be misleading, actual asset prices are telling you something.

Efficient Allocation of Quarterback Talent

Andy Reid attempts to head off a brewing quarterback controversy in the wake of 6 quarters of great football from Michael Vick after 2 quarters of bad football from Kevin Kolb:

“I think it’s a beautiful situation,” Reid said Monday. “I look at it a lot differently than other people look at it. I’ve got two quarterbacks that can play at a very important position. I’m a happy guy about it. There are a lot of teams that don’t have good quarterbacks, ones that they feel like they can win with, and I feel like we can with both of those guys.”

If it’s true that Kolb is that good, it’s true that having both Vick and Kolb on your roster is a good thing. But it’s also mighty inefficient. Whether or not Kevin Kolb is a better quarterback than Vick, I think it’s pretty clear that Vick is one of the top 30 QBs in the league. That means he’s worth more to someone else as a starter than he is to Philadelphia as a backup and the Eagles should trade him. It never really makes sense for a team to be carrying two different starter-quality quarterbacks.

The Impact of Managers

Scott Lemieux and David Brockington debate the question of whether managers “matter” in baseball. I don’t know much about baseball, but Brockington’s contention is very illogical:

These are superficial, anecdotal pieces of evidence; the sabermetric literature (that I am familiar with, I am now a couple years behind I’m afraid, although there is some interesting stuff here) has had a difficult time establishing that the field manager of a ball club has much measurable effect at all, and is negligible at best.

The link is to a research that indicates managers don’t have an impact on player performance. But insofar as some players perform better than others, and insofar as managers decide who plays and how much, I don’t see how sabermetrics could possible show that the field manager of a team has no impact on how many games the team wins. Say your team’s 8th-best offensive player is a slightly below-average defensive shortstop whereas your 12th-best offensive player is an above-average defensive shortstop. Who do you play? In what situation? Answering these kind of questions correctly seems incredibly important, and the importance of these issues is precisely why sabermetric research has been of so much interest. Or am I missing something?

Amare Stoudemire: Good for the Jews?

The world of Jewish sports fans has been roiled for a week now by speculation around New York Knicks acquisition Amare Stoudemire’s trip to Israel and Twitter-born hints of Jewish roots. The Wall Street Journal delivers the clearest explanation of the situation that I’ve seen:

Mr. Stoudemire said it was his family’s dedication to biblical scripture and his attendance at Sunday school that planted the seeds of an affinity to Judaism that he says has grown over the past decade. While he doesn’t consider himself religiously Jewish, he said he feels spiritually and culturally Jewish. [...]

Mr. Stoudemire’s interest in Judaism coincides with a stepped up relationship over the past three months with Idan Ravin, a private trainer who works with NBA players. Mr. Ravin says Mr. Stoudemire’s Hebrew comes from lessons in recent weeks with Mr. Ravin’s Israeli mother, a teacher in a Jewish school in Washington, D.C. Mr. Ravin, who accompanied Mr. Stoudemire on the trip, said Mr. Stoudemire is a quick read on foreign languages, and he speculates the skill is linked to his ability to decipher an opposing defense.

Not nearly good enough for the Law of Return, but should be good enough to serve as a marketing aid in the NYC market.

Implicit Leverage in the NBA

Arturo Galletti explains an under-understood element of NBA contract structure: “a typical NBA contract is structured around a base year salary and an 8% increase by Year. This means for example that a five year contract for $25 million (like the rumored Miller deal) only counts for 25 divided 5.8 or 4.3 million against the cap.”

One question to ask yourself is what underlying model of the economy justifies the idea that annual guaranteed 8 percent raises should be should be “typical”? It would make sense if you thought there was reason to project 8 percent nominal revenue increases for every franchise, but that doesn’t really make sense. Or if the players being signed consistently got better with every passing year. But that’s not the case. NBA player performance peaks, on average, at age 25 which means that with the exception of rookies signing their first contract extension you’re normally talking about purchasing a depreciating asset. The result is that teams time and again find themselves signing contracts that are fine for now, but turn into millstones within a few years.

Part of the issue, pretty clearly, is an agency problem. General Managers are likely to get fired now if their teams fail to improve. Consequently, dealmaking in both the free agent market and the trade market discounts the future at an irrationally high rate.

How Good Is a Bosh/Wade Duo?

With Chris Bosh joining Dwyane Wade in Miami, my first instinct was to say the pairing would be weak compared to the Wade/Shaq duo that won a championship in 2005. I looked it up, however, and I’m not sure that instinct was correct:

That’s pretty comparable. The difference, if there is one, would come largely on the defensive end. I haven’t seen Toronto play much, but Bosh’s reputation is as a weak presence in the middle.

Stoudemire and Lee

Don’t get me wrong, Amare Stoudemire is a very talented basketball player. But Knicks fans excited about signing him might want to consider that he’s about as good as David Lee, who’s now going to wind up leaving the team.

Lee takes 15.5 field goals per game and adds 4.1 free throw attempts, scoring a total of 20.2 points per game. Stoudemire takes 15.4 field goals and 7.7 free throws to add up to 23.1 points per game. In other words, STAT scores more points and does it because he’s a bit more efficient. On the other hand, Lee grabs 11.7 rebounds per game to Amare’s 8.9 boards. So if you switch Lee out for Stoudemire, you should expect the new team to score a few more ppg while grabbing a few more rebounds. You can make the case that this is an upgrade, but it’s a pretty small one and it’s possible that the team could have resigned Lee for less money.

Of course if signing Stoudemire persuades LeBron James to move to New York, then it’s a deal well worth making. But otherwise it seems like another case of an NBA team handing out a huge contract to a talented player who’s not talented enough to be worth the money.

Lakers Add Blake

With all the craziness in the NBA free agent market this offseason, it’s worth giving some acknowledgment to the kind of solid, modest move represented by a four-year, $4 million per year contract for Steve Blake to go to the Los Angeles Lakers.

Blake’s a solid contributor, he plays the position where LA is weakest, and the real value of the contract declines over time which is appropriate for a player of Blake’s age. It’s surprising to see something so sensible happen.