Bucks Diary

Thursday, December 18, 2008

Olympian Redd costing the Bucks a royal sum


This season, Michael Redd is making $15.75 million. That's way beyond his market value, and way more than a small market team like the Bucks can carry.

The 2008-09 market price NBA teams are paying per win produced equals $1.77 million (total salary amounts / available wins). Thus Redd owes the Milwaukee Bucks 8.9 wins this season.

He is currently on pace to deliver less than half that amount (3.0 wins). His Marginal Win Score at the moment is just slightly above average (+0.2) and not nearly far enough above replacement level (+1.1) to justify the maximum dollars he is getting. In essence, he is delivering wins that cost the team about $3.6 million above the going price. That's terrible. Its like shopping at an airport or in Door County!

And as bad as that sounds, the Redd situation is actually worse. As I wrote the other day, the average number of wins an NBA Champion produces is 58.8 wins. Yet even the highest NBA payroll -- the ridiculous amount the Knicks are paying their collection of stiffs -- only adds up to 55.5 wins. That means its incumbent upon a general manager to find and pay players who deliver beyond their salary amount. And it means it is absolutely lethal for a small market team like the Bucks to have players on its payroll like Redd who deliver less than half the wins they are paid for! On a well constructed championshp tea, your highest paid players must deliver around or above market value, and then you must skillfully construct a roster consisting of at least several players who are drastically under paid per win.

Take last season's champs as an example of my point. Last season, the market rate for a win produced was $1.6 million. Here's what each Celtic made versus what I believe each Celtic was worth according to the wins he produced, and what the Celtics total payroll should have been:

What the Celtics were paid vs. what they were owed
(in millions of dollars)

1. Kevin Garnett... paid:(23.75) owed: (21.42)
2. Paul Pierce... paid: (16.36) owed (19.53)
3. Ray Allen... paid: (16.00) owed (12.60)
4. Sam Cassell... paid: (6.30) owed (-0.37)
5. Kendrick Perkins... paid (4.81) owed (8.52)
6. James Posey... paid (3.20) owed (8.30)
7. Brian Scalabrine... paid (3.00) owed (1.23)
8. Tony Allen... paid (1.80) owed (6.37)
9. Eddie House... paid (1.50) owed (7.91)
10. Rajon Rondo... paid (1.22) owed (11.12)
11. Scott Pollard... paid (1.22) owed (0.33)
12. Leon Powe... paid (0.66) owed (4.48)
13. Gabe Pruitt... paid (0.65) owed (0.16)
14. PJ Brown... paid (0.47) owed (0.66)
15. Glen Davis... paid (0.42) owed (3.3)

Actual Celtics Payroll: $80.6 million
Market Value of Celtic player production: $108.06 million

As you can see, to win a championship, a general manager must be clever enough to find bargain players and under pay them for their above average win production. Most of those players will be younger payers who have little bargaining power (check out the disparity between what Rajon Rondo is paid and what he produces... its nearly $10 million!) Because of the messed up NBA labor situation (I'm trying to use PG-13 language) you may have to overpay a few top dollar guys. But you cannot carry a top dollar player who delivers less than half market value, as Michael Redd is doing. You just can't have that.

If the Bucks are going to return to glory, they have to know what you are doing when they negotiate contracts. They have to act like aggressive venture capatilists. That means they have to find market anamolies and exploit them (as I've shown, there are PLENTY of market anamolies in basketball... why else would Joe Dumars trade the uberproductive Chauncey Billups for the marginally productive Allen Iverson? He, like many GMs, harbored irrational beliefs about the value of "volume scorers" like Iverson.).

What I'm saying in a nutshell is the Milwaukee Bucks have to start to play Moneyball right now. No more Joe Alexander picks when shitloads of productive players are on the board (how sweet would Mario Chalmers look in a Bucks uniform... he and Sessions in a rotation?? Whoa!). No more signing marginally valuable players like Michael Redd to large contracts. Its time to get smart.

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