Thanks everyone for attending the "Losing by Winning" seminar today here at the LaQuinta SeaWorld at Loop 410 and Culebra. Go ahead and grab some coffee if you haven’t already, and bathrooms are next to the elevator. Anyway, I know you all just sat down, but I want to start by splitting into two groups:
Who's over thirty? Great, let's go back to the summer of 1996. Independence Day was in theaters, the U.S. economy was humming, Tim Duncan was about to begin his Senior year at Wake Forest, and the Seattle Supersonics had just signed Jim McIlvaine (shot-blocking specialist and designated "Shaq Stopper") to a 7-year, $33 million contract. A new Collective Bargaining Agreement produced several nutty contracts that summer, including Shaq's whopper deal with the Lakers (a record $120 million) but McIlvaine's is the one I remember best because even as a 13-year-old, I recognized that contract as a rotten deal. And it happens to be one of the all-time best instances of an NBA team Losing by Winning.
For those of you who are under thirty, there's the summer of 2007. Transformers was in theaters, the U.S. economy was (supposedly) humming, Kawhi Leonard was about to begin his sophomore year at King High School in Riverside, and the Orlando Magic had just signed lanky gunner Rashard Lewis to a 6-year, $118 million contract. It was a summer the ridiculous with Gerald Wallace getting a 6-year, $57 million deal with Charlotte, Mo Williams and his 6 years, $52 million with Milwaukee, and the one-and-only Darko Milicic received a 3-year, $21 million deal with Memphis. But out of all the many grotesque and damaging contracts teams handed out that summer, Lewis' was the queen termite, another excellent example of Losing by Winning in the NBA.
Losing by Winning, also known as the Winner's Curse or Winner's Dilemma, occurs in a competitive bidding context, in which a bidder becomes so determined to "win" that he or she ends up overpaying, sometimes by a tremendous amount. The Losing by Winning (LxW) phenomenon circulates throughout the front offices of the NBA like an outbreak of the common cold. There's no known cure, though the most recent CBA acted as a big ol' dose of NyQuil to help stave off some of the worst effects for team owners. There are some teams still suffering lingering effects, such as the New York Knicks, who still owe Amare Stoudemire $23.4 million for the upcoming season, and the Brooklyn Nets, who have agreed to pay Joe Johnson and Deron Williams more than $90 million combined between now and 2017.
Johnson and Williams aside, you'll often find bigger dudes like McIlvaine, or specialists like Lewis, falling into the LxW category, since their heights and skills lie on the tapered right end of the bell curve. Though I'll demonstrate in a minute how the Spurs have, for the most part, deftly avoided LxW, there are some exceptions to note in the PATFO era, including Samaki Walker, Rasho Nesterovic, Richard Jefferson, and Derek Anderson. The key thing to keep in mind with guys who fall into this category is that they aren't necessarily bad players; they just don't produce much for the size of their salaries.
Take Rasho, for instance. After David Robinson's retirement in summer 2003, the Spurs needed to replace his size in the paint. Of course, when I say "replace," it's with the understanding that replacing a franchise icon (who at the age of 37 had just put up a playoff PER of 17.7) was going to be a bit tricky, even at Robinson's final season salary of $10 million per year. The Spurs didn't pay Rasho quite that much, but he was given a 6-year, $42 million contract, effectively making him the team's second-highest paid player. Rasho's 2004 playoff PER of 9.8 was just ahead of Hedo Turkoglu and a distant seventh behind Devin Brown. And that was by far the Slovenian's best playoffs with the Spurs. For the remainder of his tenure in S.A., Rasho would start in only one other playoff game, an 18-point loss to Sacramento in 2006. During the 2005 title run, he collected a grand total of 4 rebounds. So Rasho was less of an Admiral and more of a Cabin Boy, and just halfway through that 6-year deal he was traded to Toronto for Eric Williams, a 2009 second round pick, and a certain red-haired sandwich enthusiast who just this summer signed his third contract with the Spurs. Funny how things work out.
The LxW deal typically smells fishy from the start. (Feel free to grab another danish, if you like. There are plenty left.) In the summer of 2010, Richard Jefferson was coming off a humdinger of a playoffs, during which he shot 1 for 5 from three point range and failed to average double figures in scoring (and this as the Spurs' second-highest paid player, you know.) So PATFO convinced Jefferson to opt out of the final year of his atrocious contract in exchange for a longer 4-year deal worth $38.9 million. It was not a popular move in San Antonio, and even Buford seemed to rather sheepishly defend the signing with a "Jefferson was simply the best player available." Regardless, before Richard had even played half of his contract, the Spurs were looking to deal him. By the spring of 2012, they had shipped him to Golden State for Stephen Jackson.
Both the Rasho deal and the Jefferson contracts had two components of LxW: the ignominious ending and the fact that they smelled like sour deals from a mile away. Opportunity cost is another aspect of the LxW deal. Signing one player means there are other players you could have signed who not only aren't contributing for you, they're signing with another team and contributing for them. By being short-sighted and taking on massive multi-year deals that will pay players long beyond their peak seasons, teams miss out on bigger and better opportunities that come along in the interim. Think New York and Brooklyn would've at least liked the option of getting rejected by LeBron this summer? You could say New York got the ultimate consolation prize with the right to LxW the Carmelo Anthony signing, but that didn't stop Knicks fans from fantasizing about dumping Stoudemire's deal so they could go after LeBron anyway. Kobe Bryant's ludicrous extension is one of the reasons he's going to retire after playing alongside Jordan Hill and Nick Young, instead of contending for a Jordan-matching sixth championship.
The Rasho and Jefferson contracts notwithstanding, this is where PATFO has shown the most mastery of the free agent process. Unless the player is a franchise cornerstone or a sure thing, the Spurs have never overextended themselves or reached beyond what they can reasonably predict or foresee. Take a player like Roger Mason Jr.. He had a pretty good maiden voyage with the Spurs in 2008-2009, shooting 44% from three, hitting some memorably big shots in the regular season, and basically helping Spurs fans get past the departure of Brent Barry. But in his second season Mason's 3-point shooting cratered to 14% in the postseason due partly to playing out of position at point guard and small forward.
But that's only part of the story. Hopefully this doesn't cause any flashbacks, but Mason posted a -7.4 PER in the 2010 playoffs? His highest minutes total came in Game 4 of the Dallas series, a game which the Spurs lost by 22 points. Per 100 possessions, he averaged 2.6 points against 10.4 fouls. Yeah, I don't think I'm going to sleep tonight, either. Sorry. While those numbers are seared into your eyeballs, be thankful the Spurs only signed Roger to a 2-year contract and were rid of him following that special performance. If the Spurs had overvalued Mason and signed him to a long-term deal in 2008, he might still be on the books now, and R.C. would be on the phone with Danny Ferry in Atlanta, trying to trade him for someone like Pero Antic and a piece of used dental floss.
On the other hand, keeping a quality player off the roster of a contending rival can alter what might otherwise be a LxW deal. This is why I thought the Spurs were justified in their pursuit of Pau Gasol this summer, and why I'm relieved he went to Chicago and not a conference rival like Oklahoma City, Dallas, or Houston. On the other hand, the 3-year deal to which the Bulls signed Gasol could very well end up haunting them, especially if Pau doesn't help Chicago contend for a title or drops off significantly toward the end of the deal, when he'll be 37 years old. Anyway, I suspect few tears were shed in the households of Spurs fans over not landing Pau.
Spin it how you like, the Spurs had a successful offseason from a continuity standpoint. But did they avoid the Winner's Curse? It's no coincidence that the two most successful Spurs playoff campaigns in the last seven years only came after the Spurs cleansed themselves of all their LxW characters like Mason and Jefferson. There's still some current deals to keep an eye on, of course. Between now and 2017, the Spurs owe Tiago Splitter and Patty Mills a combined $37 million, and 32-year old Boris Diaw just signed a 4 year, $28 million contract. All of those deals look good under the warm glow of the Larry O'Brien trophy, but if the Spurs find themselves in rebuilding mode in the next couple of years, that glow will become a spotlight.
Before you crumple your coffee cups and throw them at me, I'm not saying that the Spurs have overpaid anyone. Splitter's deal looks a million times better than the one Washington just gave Marcin Gortat. If anything, I'm imploring you to celebrate what PATFO has built, because it's been a long time coming. Let's celebrate the fact that the defending NBA champs are bringing everyone back, that they still have their amnesty provision (the NyQuil I was talking about earlier), are under the salary cap, and their highest-paid player makes less per year than Gordon Hayward. That's mighty fine fiscal gymnastics.
Guys like Parker, Kawhi, Duncan and Manu have to be evaluated differently anyway, because they fall into that sure thing/cornerstone category. You pay them what you have to. But it's worth remembering that the other guys, Splitter, Mills, and Diaw, are system players who arguably have less value outside of the Spurs schemes. Signing them to those deals was probably the right choice at the time, but you could also argue all three went from being bargains to being almost overpaid, and that none of them will still be around by the time those deals are over based on the history of Spurs role players.
The question of relative value is one we'll have to ask again next summer when Danny Green becomes an unrestricted free agent and Cory Joseph a restricted free agent. Are those guys worth keeping around for continuity, if not for their particular skill sets? If PATFO cooks up a multi-year deal that looks fishy on the front end, or isn't likely to end well, the answer is probably no. That's just the nature of the NBA. If free agency weren't a gamble, there'd be nothing to celebrate when everything goes right.
That concludes the Losing by Winning seminar. Thanks for coming! I'm sorry we don't have time for questions. If you're going to SeaWorld remember to pick up your food voucher at the receptionist's desk. Supplies are limited, so act quick.