February 22, 2015


THE CELTICS' INNOVATIVE REBUILD (Brett Koremenos, 2/22/15, Sports on Earth)

[I]nstead of falling victim to groupthink, GM Danny Ainge took a page out of one of sport's most innovative executives and accelerated the Celtics' return to relevance by acquiring veteran Suns guard Isaiah Thomas for draft picks. In doing so, they exploited one of the NBA's biggest market inefficiencies: the overvaluation of potential.

Similar to basketball, the typical approach for small market baseball team has been to rely heavily on their farm system to churn out the cheap talent (that hopefully blossoms into stars) those clubs need in order to stay competitive with the big market clubs capable of buying more wins. Doing so means these small market teams must invest heavily in young players whose potential contributions at the Major League level are a complete unknown. The Oakland A's Billy Beane has developed a reputation over the years of exploiting soft spots in Major League Baseball's market in order to keep his resource-deficient organization near the top of the standings on an annual basis. By attacking this conventional wisdom, Beane has found a new way to do so in recent years.

Beane's latest trend calls for bypassing the whims of developing young talent in favor of securing proven veteran contributors, even if they're not stars. And though roster dynamics, salary mechanics and the impact of individuals is far different in the NBA than MLB, the premise of potential being overvalued is the same in both sports.

Banking on young talent, and by proxy, the first round picks that give you the best chance of acquiring it, carries with it inherent risks. As numerous people and studies have pointed out, the NBA draft is a total crapshoot. For Ainge and the Celtics, there's as a much better chance that their collection of draft picks turns them into a redux of the Magic than the Thunder -- the team that has inspired bad NBA franchises to hoard draft picks and making multiple trips to the lottery in an attempt to become perennial contenders. But the fact is, the ROI (return on investment) for late first-round picks is very low, with maybe a handful players taken in the latter third of that round even panning out into rotation players, much less starters or stars.

Yet year after year, teams treat these valuable draft picks as a scarce resource, mostly with good reason. Contenders are reluctant to part with them because the idea of landing a contributor on a rookie deal is a huge relief to the salary cap constraints most face. And on the flip side, rebuilding clubs crave them because they represent the lone avenue (unless they are a big market team) for acquiring the top-end talent deemed necessary to compete for titles.

...is that bad teams don't ever get better unless they get really lucky (Kevin Durant is available in the draft) and the bad teams are aggressive about trying to lose.  Games are essentially consumer fraud.

Posted by at February 22, 2015 8:11 AM

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