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Strategy column for NBA teams outside big markets




| Dec. 16, 2011

Yes, despite what you've heard, teams outside big markets can compete in today's NBA. Sports attorney Matt Tolnick explains how to do it.

Under the NBA’s new Collective Bargaining Agreement (“CBA”) and in light of the precedent created by NBA “Big Threes,” smaller market teams are not going to thrive by following a “Big Three” model. After all, the best superstar tandems will be had by Miami, New York, Oklahoma City, Los Angeles, and wherever Dwight Howard ends up.

Teams unable to compete for free agent superstars should not try to (and then wind up overpaying for non-superstars). Instead, they should focus on signing players to contracts that can be expected to be good values throughout the length of the contract term, as these contracts preserve salary cap flexibility. The ultimate goal for these franchises is to keep and accumulate draft picks and stay flexible enough to put together an above average run of drafting to a point where most of their key pieces are on efficient rookie scale deals (e.g. Oklahoma City 2009-10 and 2010-11, Chicago circa 2009-10, and Indiana 2011-12). As an aside, this is clearly the rationale that Commissioner Stern employed in vetoing the Chris Paul to Los Angeles Lakers trade, which would have netted New Orleans significant talent but players who were long out of their rookie scale contracts. The trade would be less of a rebuild for New Orleans and more of a short-term solution.

With a talented young core of players under rookie scale contracts, you set your franchise up to: (a) have the salary cap space to attract a superstar, (b) have trade assets to trade or sign-and-trade for a superstar, or (c) attract multiple loyal, team- oriented, leadership-inspiring veterans who have all-star potential ($8-13m/yr players, such as Tyson Chandler, Brooke Lopez, Rajon Rondo, Eric Gordon, etc.), should any of your young players develop into superstars.

With the NBA’s new rules which allow teams that draft all-star players the opportunity to sign them for 30% of the cap (more than any other team can sign them for), this gives small market teams an increased chance of keeping their young stars. By keeping salary cap flexibility and with a growing core of young talent, the team has the chance to attract top-tier free agents. The best time to go “all in” is when the team has a strong commitment from its young core to stay and prior to that core re-signing. While there is still cap room available, important free agent pieces could be signed and when the rookie scale contracts elapse, these young players could be re-signed using Bird Exceptions. It is absolutely key to have a desirable enough nucleus of young talent to attract free agents to sign deals that could be moved in the event that the team’s young players choose not to re-sign.

In addition to the drafting, it is obviously critically important to select the right free agents to put around the young core. A bad free agent signing could imperil the team’s chances of keeping its young talent. Seeking to go “all-in” too soon in an effort to appease young stars has proved a losing strategy. Both Toronto and Cleveland made expensive acquisitions intended to keep Chris Bosh (trading Roy Hibbert and a 1st round draft pick to eventually acquire Shawn Marion; taking on Hedo Turkoglu’s deal) and LeBron James (signing Antawn Jamison to a deal two years longer than LeBron’s commitment) around only to lose their superstars and be left with salary cap inflexibility.

If the right free agent(s) are signed, then the players under their rookie contracts have a chance to make the playoffs and possibly advance. Having young players germinate into stars (or superstars) while playing on playoff teams (i.e. Derrick Rose, Kevin Durant) can only help convince them to stay past their rookie contracts. Drafting a superstar and giving him a winning roster, a roster that has grown together, and a roster not even having entered its prime gives you the best chance of keeping him long-term.

So basically, I’ve just given the mantra of pretty much every GM ever: do the best you can given the resources that you expend. So here’s the twist. First, during the lean roster years (85-95% of the cap with rookie contract players and expiring deals), you would offer only one-year deals to players unable to be signed to a clearly favorable contract. Secondly, you spend several extra million dollars on your scouting department. Make it the deepest in the league. Given the importance of scouting (i.e. the difference between drafting a franchise player at #9 or #10 versus a bust at #1 or #6 [see 1998 NBA Draft]), scouting is woefully under-invested in.

The team of scouts and statisticians would include long-time NBA scouts, former college and professional coaches, former professional basketball players (and possibly some strong college players who knew they would not make the NBA and were hungry to get experience with NBA front office work). You could send multiple scouts on each scouting trip but would prevent them from sharing insights with each other, at the peril of both of their jobs. This way, you would be making decisions based upon more information and more unbiased observations than other GMs. You would be getting a more objective, reality-based view.

Equally importantly, you would be able to test your scouts against one another. You would have extensive records of the observations, predictions, and recommendations made by your scouts. Like Wall Street traders or law school students, your scouts would be competing head-to-head. The result of this competition would be enlightened decision making when the time came to scale back the scouting department.

All the while, the fans would be informed of the plan and the timeline that executing it would require. They would be encouraged to get behind the good, young players and make them feel as “at home” as possible, hopefully encouraging them to stay. The fans would have reason to have hope and to believe, knowing that, while money is not being spent hand-over-fist on player payroll, it is being wisely spent to maximize critical player personnel decision making.

The fans would know that the scouting department is the league’s most committed and, following the blueprints of Chicago and Oklahoma City, they would know that the team had a strong chance of a bright future. Patience is a virtue; if fans can trust their GMs to build a strong foundation, even if it means some lean years at first, then the franchises, fanbases, and NBA will be better for it.

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