I started following basketball in the mid-90’s, during the heyday of the Jordan-era Bulls. Like many who watched basketball either casually or intensely, I was awed by His Airness’ grace, determination, and talent on the court. Nonetheless, I did not consider myself a Bulls fan—while I enjoyed watching them play, there were any number of fun teams to root for during that time period (the Knicks, Pacers, Heat, Sonics, and indeed, the Rockets). In my formative years, I watched basketball with the air of a neutral spectator, albeit one eager to be impressed and easily pleased by the athletic feats transmitted on my TV screen. Having no particular attachment to the team in my home market of New York left me free to enjoy basketball as a pure form of entertainment, without the emotional strings that come with being a specific team’s fan.
June of 2002 brought a literally gigantic presence to the league, one that helped usher in the international era of the NBA and change my relationship with the game of basketball. That presence of course, was Yao Ming—at 7’6’’ one of the tallest players in NBA history and the most high-profile Asian basketball player the world had ever seen. Taken with the number one overall pick by the Houston Rockets (a team that had just a 9% chance of winning the lottery), Yao was an immediate celebrity, both here and abroad. My dad, who had rarely bothered to tune into NBA games since Jordan’s departure from the Bulls, was suddenly glued to the TV during nationally-televised Rockets games. Even my mom, who could have probably counted the number of NBA games she’d watched on the fingers of one hand, found herself engulfed in the phenomenon that was Yao.
For my family, watching and rooting for Yao Ming meant something more than cheering for any individual player—it was an affirmation and expression of our Chinese heritage. Yao was both a symbol and an example for us—like us, Yao was an outsider; in a league dominated by African-Americans and to a lesser extent Caucasians, Yao was one of a few Asian players in the NBA (the others being Mengke Bateer and the immortal Wang Zhizhi). Seeing Yao’s struggle with English and with adapting to a foreign culture made me recall my own difficulties carving out an identity for myself in school. In Yao’s humiliations and insults, I saw shades of the subtle and sometimes not-so-subtle discrimination and racism I’d encountered at certain points in my life. Yao’s name even shared a character with mine (Ming, meaning bright). Is it any wonder then, that I fell in love with both Yao and the Rockets?
So it was that I became a Rockets fan and formed my inaugural relationship with a sports team. There was plenty to be excited about—the Rockets already had a budding star in Steve Francis and it wasn’t long before Yao established himself as a perennial All-Star and the team was generating both national and international attention. Subsequent trades brought in Tracy McGrady, Shane Battier, Ron Artest, and an armada of cheap and useful veterans, transforming the Rockets into a team that resembled a legitimate title contender. Sadly, this potential was never realized. Injuries marred the remainder of Yao’s and T-Mac’s careers, with their Rockets’ tenures ultimately ending in, respectively: a quiet retirement after repeated foot-issues in 2011 and being unceremoniously shipped out in a three-team trade involving the Knicks and Kings in 2010. Throughout the Yao and T-Mac years, the Rockets made only four playoff appearances, never advancing beyond the Western Conference Semi-Finals. The Rockets’ most enduring basketball achievement of those years may have been the 22-game win streak in the 2007-2008 season, a streak that the Heat recently surpassed.
With Yao’s departure, I had lost my raison d’être as a Rockets fan—I had every reason to abandon them and return to my days of following the league as a neutral-spectator, taking in the talents of its players at my leisure. Furthermore, without Yao and T-Mac, the Rockets looked primed for years of irrelevance, only to be brought out of the depths of their hopelessness via the lottery—not an enticing prospect for fans of the team. My devotion to the team, however, never lapsed.
The primary reason for my continued fidelity to the Rockets was my interest in their general manager, Daryl Morey. A graduate of MIT’s Sloan Business School, Morey was among a handful of NBA GM’s who helped bring statistical analysis to NBA front offices. Not only was Morey’s use of analytics in making basketball decisions fascinating to me, his vision (or perhaps owner Les Alexander’s directive) of re-creating a championship contender without bottoming-out and hitting the lottery jackpot represented an intriguing departure from conventional basketball wisdom. As I delved into basketball statistics and started reading the likes of John Hollinger, I became more interested in Morey and the Rockets from a philosophical and academic perspective: what was it that Houston’s front office was trying to do, and would their insistence on using analytics and employing no-stats All-Stars succeed? Even though the Rockets were consistently mediocre for a number of years, I still remained a loyal fan, both because I wanted to witness Morey’s endgame and because I grew to admire the hard-working and under-appreciated players he populated the roster with, players like Luis Scola, Kyle Lowry, Goran Dragic, and Carl Landry. In the intervening years, rooting for the Rockets often meant rooting for the underdog, something I’m naturally inclined to do.
Fast-forward to the present: the 2012-2013 season is now in its latter stages and the Rockets are on the brink of securing a playoff spot for the first time in four years. From the team’s perspective, Morey’s plan of accumulating assets and his willingness to make bold deals paid-off when the Rockets acquired James Harden, Jeremy Lin, and Omer Asik in a fruitful and frenetic off-season. The team’s performance on the court (offensively at least), has been nothing short of the physical manifestation of efficient shot selection —the Rockets’ shot chart has warmed the hearts of many an NBA stats-geek. The upshot is that Houston now sits at 7th in the West, already a playoff caliber team with a potent combination of young talent and financial flexibility that almost any team would envy. Morey has indeed achieved the impossible: rebuilding on the fly without ever bottoming out.
On a personal level, this past season has seen the various threads that link me to the Rockets intertwine to reinforce my attachment to the team. In Jeremy Lin, the Rockets have found a successor to reclaim Yao’s mantle as the most popular Asian basketball player in the world—once again, my parents are paying attention to basketball in the hopes of seeing another player of Asian descent prove his mettle. I have converted my interest in basketball analytics into a role as a blogger both here and on Red94—I follow Rockets-related news and games with the same fervor as before, but also pay more attention during games and analyze team statistics in my spare time. During a trip to the MIT Sloan Analytics Conference, I actually got to meet Morey and ask him a few ill-prepared questions. Even my fan experience is now complete: a few weeks ago, I caught my first in-person Rockets’ game when the team visited the Brooklyn Nets at Barclay’s Center. More than a decade after Yao first entered the league, I am still a Rockets’ fan. For me, following the Rockets has progressed from a curious hobby to forming an integral part of my identity—the above paragraphs are my answer to a question I am often asked: “Why?”
A few weeks ago, Kevin Pelton of ESPN looked at the best contracts in the NBA by multiplying a player’s WARP (wins above replacement level) by the average amount that teams pay for each WARP. I’d like to approach this same problem from a different angle: namely, how much value are teams getting out of the salaries they pay their players? Instead of looking at WARP, I’ll focus on win shares, another metric of player value. While Pelton’s methodology assumes that the overall NBA salary market is priced correctly (therefore attaching a value to each WARP a team pays for), my method makes no assumptions about overall pricing accuracy and instead seeks to evaluate relative player salary and performance.
At a basic level, my goal is to quantitatively evaluate the best and worst contracts in the NBA. To do so, I construct a simple metric that I call the “value ratio.” This is defined as: (Player Salary/Median Salary)/(Player Win Share/Median Win Share). In effect, I am comparing the amount over (or under) which a player is being paid vs. the median NBA player with that player’s production over (or under) that of a median player. Comparing salaries and win shares with median values serves as a way of normalizing these metrics and making them more readily comparable to each other. A simple way to think about this metric is the following: if the ratio is less than 1, the player is undervalued; if the ratio is greater than one, the player is overvalued; if the ratio equals one, the player is properly valued. In short, the most valuable players will be those with the smallest value ratios.
Data and Methodology
Win shares is a measure of player value that represents the number of wins that a player contributes to his team. For any given season, the sum of the win shares of all the players on a team should be close to the actual total wins of that team (more on how win shares are calculated can be found here). Instead of looking at win shares from this season alone, I used a three-year average of win-share data, where available (rookies for example, would have only one year of data). This serves to avoid penalizing players having an off-year compared with their historical production—for example, looking at one year’s win shares data might show that someone like Pau Gasol is severely overvalued. In reality, however, a 7-foot big man posting all-star levels of production throughout his career is probably worth $19mm per season. Using an average of win shares data over a three-year time frame provides a more reliable measure of player productivity. In this post, I use win share data from Basketball Reference.
Instead of only looking at current year salary, I took an annual average of a team’s current and future salary commitments to each player. This is again a smoothing technique that accounts for the fact that a player’s current salary is not necessarily a good reflection of his future salary. James Harden, for example, is being paid only $6mm this season but is due nearly $80mm over the next five seasons. Taking an average of a team’s future salary commitments gives a better picture of how teams value players in the long-run. For the purposes of this exercise, I assume that all team and player options are picked up, all unguaranteed years will be fulfilled, all qualifying offers are extended, and no early termination options are exercised. All salary data is courtesy of ShamSports.
I also set a minutes-threshold to define a smaller subset of NBA players. This helps to exclude players like Derrick Rose who have been devastated by injury this season as well as those who haven’t played enough for their statistics to have meaning. On average, NBA teams have played roughly 50 games so far: at 48 minutes per game, that’s 2,400 available minutes per player. I set the minutes-threshold at 500, which incorporates most rotation players in the league and gives us a sample of 285 players to work with.
Results and Analysis