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High School players entering the NBA draft
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mtamada

Joined: 28 Jan 2005
Posts: 376

Posted: Thu Sep 22, 2005 11:50 pm Post subject:

HoopStudies wrote:

Ed Küpfer wrote:

HoopStudies wrote:

Exactly where is McCann's study anyway?

Look here: http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=386163

I haven't read the whole thing.

[...]

It definitely has some good info. A good reference document for the issue

I read it up to about page 53 of 87. It does have some good reference info, but the analysis is crapola.

Quote:

There is a direct comparison between Shane Battier and Tyson Chandler

This is his most egregiously poor argument, and the source of his $100M figure. The correct (though obviously difficult) comparison would've been to compare the real Chandler to what Chandler would've made if he'd gone to college. Or to compare the real Battier to what Battier would've made if he'd gone straight to the NBA from high school.

But instead McCann compares the real Chandler to the real Battier.

To see why this is bogus, let's compare Moses Malone, who leapt from high school to the pros. And Rod Derline, who played 4 years at Seattle Univ. Malone over his career earned, I don't know how much, but it was a heck of a lot more than Derline earned. Millions more.

Have we proved that Malone would've lost millions of dollars by staying in college?

Chandler was drafted 2nd, Battier 6th. It's tough enough to compare two different players, but when they are patently not comparable to begin with, the comparative stats are close to useless.

Even given the lousy set-up of his analysis, McCann does a poor job. He assumes that Chandler in 2011 will get an NBA max contract. Now, it is still possible that Chandler will become an NBA all-star, but I think the chances of him getting the NBA max are small.

Common sense rough estimates: if a player spends 4 years in college, then, not counting the possibility of a career-ending injury, the player will lose at most 4 years off his NBA career. In order for those 4 years to cost $100M, a player would have to earn $25M per year. Only Garnett and Shaq have those kinds of salaries (and Garnett no longer does, according to Patricia Bender's NBA salary data). Moreover, if Shaq or Garnett had stayed in college for 4 years, would the lost years have been the high-earning ones, or the earlier, low-earning ones? E.g. Shaq didn't get into the $20M+ range until he was 28 or 29 years old. I believe that if he'd stayed in college for 4 years, then at age 28 or 29 he would STILL have earned a $20M+ salary.

Another example of poor reasoning in McCann's article: his two pie charts comparing the daily activities of college basketball players and other college students. He showed that college basketball players spend a lot of time practicing and playing basketball, at the expense of "free time". But the correct comparison would be to the daily activities of a teenage pro player. And I'd bet that those pro players are spending about the same time per day playing basketball as the college players -- but with 0 hours in the college classroom.

Now we could debate the relative value of those classroom hours, compared to the money earned by the pro player. That'd be the correct comparison, but McCann doesn't do it.

Let me say that I don't care strongly one way or the other about the 19-year age limit. I suppose I'm somewhat against it, for the usual reasons -- the foregone earnings, primarily. McCann's against the limit, also due to foregone earnings, but his reasoning and calculations are poor.

For a Kobe or a Moses, OF COURSE it pays off to enter the NBA as soon as possible (and this might be a good argument against the age limit). But McCann has failed (at least in the first 53 pages, I gave up in resignation after that) to address the marginal players, the ones who for sure will not be losing $100M by playing in college. Maybe they might even gain by playing in college. We could argue that it should be up to the individual to make that choice. Maybe so, however I'm often skeptical of the quality of choices made by 18-year olds.

Quote:

What good is school anyway if it doesn't train us for a job better than being on the job?

Two possible answers: maybe school does do better training. Not for any single job; the best training for that single job is to take that job and start working. But what do you do when that single job in the buggy whip factory disappears, or your job in the IT office gets outsourced to India? Your single-job training will leave you without a variety of skills to offer in the marketplace. In contrast, someone with an education can hopefully learn or re-train in order to qualify for a wide variety of jobs.

Secondly: maybe the reason for going to school is to get an education, not to get a job. Why get an education? Jobs are a partial reason, but only a partial reason. Other reasons: in order to have people who make wise public decisions (e.g. realizing that it's a bad idea to elect law-and-order demagogues, as the Germans discovered after 1932). In order to have a better life period (e.g. learning why Beethoven and Jane Austen are worth spending time on). People who have learned those things have richer lives than those who have not, and who only, say, follow the NBA. (Nothing wrong with following the NBA, all of us here do it, but the point is that there are or at least should be other things in life, that we also do.)

And even amongst those who do nothing but follow the NBA, the educated ones who can do analysis of the NBA get more out of the NBA than those who cannot. The proof? Any of use here in this group could just passively watch the NBA and never do any analysis. But we don't do that, because we know that we can get even more enjoyment (or even employment, in a couple of cases) by being sophisticated, analytic watchers of the NBA instead of just passive consumers.

And that's what education provides. I don't think there are any jobs which train one to become a good analyst of the NBA. Or maybe there are such jobs (environmental engineer? economist?) -- but in order to get THAT kind of job, one must get an education in the first place.

HoopStudies

Joined: 30 Dec 2004
Posts: 705
Location: Near Philadelphia, PA

Posted: Fri Sep 23, 2005 12:12 am Post subject:

mtamada wrote:

HoopStudies wrote:

Ed Küpfer wrote:

HoopStudies wrote:

Exactly where is McCann's study anyway?

Look here: http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=386163

I haven't read the whole thing.

[...]

It definitely has some good info. A good reference document for the issue

I read it up to about page 53 of 87. It does have some good reference info, but the analysis is crapola.

Thank you, Mike, for having more time and taking more time than I could to arrive at the word "crapola".

I basically looked at the pictures (my god, I'm 5 years old again) and saw that he discussed all the cases of HS kids going in the draft (I can read a little). I'd still suggest that others do more than I and read it so that we at least agree on what's stupid and what's not.
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Dean Oliver
Author, Basketball on Paper
The postings are my own & don't necess represent positions, strategies or opinions of employers.

kjb

Joined: 03 Jan 2005
Posts: 864
Location: Washington, DC

Posted: Fri Sep 23, 2005 5:05 am Post subject:

I just did a comparison of a hypothetical superstar player. Let's say there was some high school kid who would have been the #1 pick in 2001. Let's say he would have been a superstar in the NBA whether he went to college or not -- meaning max contracts throughout his career. I assumed 5% annual salary cap growth (lower than the actual historical average), and I assumed this hypothetical player would stay in the league until age 37. The difference between going pro at age 18 and going to college for 4 years -- $105 million.

Code:

YEAR AGE HS 1YEAR 2YEARS 3YEARS 4YEARS CAP
2001 18 3,081,200
2002 19 3,312,300 3,215,200
2003 20 3,543,400 3,456,300 3,349,100
2004 21 4,468,227 3,697,400 3,600,300 3,483,100 5% growth
2005 22 12,375,000 4,662,421 3,851,500 3,744,300 3,617,100 49,500,000
2006 23 13,612,500 12,993,750 4,856,742 4,005,600 3,888,300 51,975,000
2007 24 14,850,000 14,293,125 13,643,438 5,051,062 4,159,600 54,573,750
2008 25 16,087,500 15,592,500 15,007,781 14,325,609 5,245,256 57,302,438
2009 26 17,325,000 16,891,875 16,372,125 15,758,170 15,041,890 60,167,559
2010 27 18,562,500 18,191,250 17,736,469 17,190,731 16,617,707 63,175,937
2011 28 23,217,157 19,490,625 19,100,813 18,623,292 18,193,524 66,334,734
2012 29 25,538,873 24,378,015 20,465,156 20,055,853 19,769,341 69,651,471
2013 30 27,860,588 26,815,816 25,596,916 21,488,414 21,345,158 73,134,044
2014 31 30,182,304 29,253,618 28,156,607 26,876,761 22,920,975 76,790,747
2015 32 32,504,020 31,691,419 30,716,299 29,564,437 28,220,599 80,630,284
2016 33 34,825,735 34,129,221 33,275,990 32,252,114 31,177,043 84,661,798
2017 34 36,567,022 36,567,022 35,835,682 34,939,790 34,133,487 88,894,888
2018 35 40,223,724 38,395,373 38,395,373 37,627,466 37,089,931 93,339,633
2019 36 43,880,427 42,234,911 34,302,315 40,315,142 40,046,374 98,006,614
2020 37 47,537,129 46,074,448 37,732,546 36,017,431 43,002,818 102,906,945

449,554,607 422,024,290 381,995,151 361,319,273 344,469,103

AVG. SALARY 22,477,730 22,211,805 21,221,953 21,254,075 21,529,319

College Cost??? 27,530,317 67,559,456 88,235,334 105,085,504

If we limit the kid going straight from high school to the same 16 years available to the college kid (assuming that the body wears down faster (or something) in the longer and more difficult (than college) NBA season); the totals flip. In that scenario, the guy going to college earns an estimated $60 million more.

(What's REALLY interesting is that if I assume ZERO growth in the salary cap -- that it'll be $49.5 million for the rest of this hypothetical player's career -- the overall money lost by going to college grows to $123 million. Then if I lop off the tail of the high school kid's career (the last 4 seasons), the college kid comes out just $2.5 million ahead -- because he earns a little more in the rookie contract by virtue of starting later.)

This might address objections to McCann's Chandler vs. Battier comparison. This is #1 pick vs. #1 pick, with max contracts. And it still (in my view) leans pretty heavily toward coming out early.

EDIT: Caught a small error in my early morning table, which reduced the "cost" from $108 million to $105 million. Also, I updated to include the maximum cost for each year of college using the same assumptions mentioned above.

Mike G

Joined: 14 Jan 2005
Posts: 3563
Location: Hendersonville, NC

Posted: Fri Sep 23, 2005 10:48 am Post subject: Re: , aoll

kbche wrote:

Hi Mike,

I have been reading all of your posts. You seem to be in support of NBA prospects attending college. This is your opinion, and everyone is entitled to their own opinion. You have stated numerous claims without evidence. Mr. McCann has done extensive research which can not be disregarded. You should provide some statistics to support your claims which would be educational and enlightening.

Kim, Greetings.

First, I want to apologize for making your initially innocent and informative post into an intellectual battlefield. This was not my intention. I pasted some quotes and asked some questions. I was addressing the exact language you used, and how some comments might appear to an impressionable highschool basketball player.

I haven't advocated college as the universally-ideal way to spend a year between HS and NBA. As a fan, I'd like to see more good players, playing in college; and fewer stuck on NBA benches.

In retrospect, it seems clear you (and McCann, in his blog) were generally referring to "players drafted by the NBA out of high school"; but sometimes you (and he) just used the term "high school players", in given lines. You paraphrased him, I quoted you, etc. Now the internet is littered with lines like: "players who skip college can earn as much as $100 million more than their counterparts that attended college."

You can see in that line no mention of reference to "signed by NBA teams", nor "drafted by NBA teams". Just, "players who skip college". There is no shortage of loosely-crafted lines like these, quoted in this thread. I respectfully object.

My objection is that, whatever you, or I, or McCann may intend to state, or back up with numbers, the "high school player" who may chance upon such a line very likely does not have the inclination to sort out the evidence. It seems we here can't do it, collectively.

" 1. You stated that players that are paid highly do not perform. What evidence do you have to support such a claim? All players in the NBA are paid handsomely , some do make more than others. The teams obviously decided that these players were worth the money at one point in time. "

Of course, I did not say that. I said: "What bothers me is that in many cases, Big Money seems to have an inverse relationship with Big Effort..."

I don't quantify "many"; I have, however, been around the block. In a sizable population sample, you will find people who land a cushy position, and flout it. Unless I see evidence to the contrary, I presume NBA players have their share of this type.

There are overweight guys in the league, and others who are prematurely retired. Players with reputations for laziness. Drunks. Bad teammates. Would they be so slothful if they were paid daily, based on that day's performance?

I think when NBA teams pay money to a guy, they 'hope' he's worth it.

" 2. Are the NBA teams still making a profit with these high salaries? Do you propose that the owners keep more of the profit? Do you propose that all players get paid the same amount of money? "

Don't know but probably; no; no. I won't wonder why you ask these questions.

If there's a salary cap, it seems each team has a certain amount of money to go around. If some of that money goes to unproven prospects, there's less for the rest of the players. Sometimes the owner has to tell a player he can't offer him more, even though he deserves it.

I guess I'm a fan advocate. I'd rather players get what they deserve. Theoretically, a company runs better that way, and a team should as well. When a scrub gets paid more than a superstar, the star can be content with his megamils and not worry about the other guy. But when the team can't upgrade their roster because they've committed all this money, team chemistry goes to hell.

If I were a Sonics fan in the Kemp/McIlvaine years, I'd resent the scrub, too. Long-term, high-dollar commitment to "project" players is bizarre. When these projects are highschool players with no NBA stats behind them, it's bizarrer.

" 3. You also listed players peak ages. I do not agree with some of your peaks. I believe that a player is at his peak when he can lead a team, and make everyone around him play better. The peak that you seem to be referring to seems more based on individual stats. Basketball is a team sport, and should be assessed in an appropriate way where teamwork is weighed more heavily than individual accomplishments. "

Alright, I don't quibble. But now we can think about quantifying "can lead a team" and "make everyone around him play better".

Players who pass through their statistical peaks, without titles, and later title with better support, are often in their prime earning years. Somehow, that seems about right, too.[/quote]

Dan Rosenbaum

Joined: 03 Jan 2005
Posts: 541
Location: Greensboro, North Carolina

Posted: Fri Sep 23, 2005 11:34 am Post subject: Re: , aoll

Mike G wrote:

If there's a salary cap, it seems each team has a certain amount of money to go around. If some of that money goes to unproven prospects, there's less for the rest of the players. Sometimes the owner has to tell a player he can't offer him more, even though he deserves it.

I guess I'm a fan advocate. I'd rather players get what they deserve. Theoretically, a company runs better that way, and a team should as well. When a scrub gets paid more than a superstar, the star can be content with his megamils and not worry about the other guy. But when the team can't upgrade their roster because they've committed all this money, team chemistry goes to hell.

If I were a Sonics fan in the Kemp/McIlvaine years, I'd resent the scrub, too. Long-term, high-dollar commitment to "project" players is bizarre. When these projects are highschool players with no NBA stats behind them, it's bizarrer.

Mike, in this context what is interesting is that players in their first four years in the league are dramatically underpaid relative to what they, on average, produce on the court. This can be demonstrated using pretty much any metric - points scored, adjusted plus/minus, team wins, attendance at games, All-Star votes. The evidence suggests that those young players that you seem to detest are the group that are the best bargains in the league.

If players were paid daily rates, like you suggest, what would happen is that lots of money would be redestributed from veterans to players in the first four years in the league.

So the "choice" most young players are faced with is this. Spend a few years in college, where your marginal revenue product will be several multiples of what the school actually gives you. And then go into the pros, where during the first four seasons, you again will be paid a fraction of what you are worth to your team.

For me rather than focusing on the few young players who beat the odds and are overpaid, I direct my ire at the veteran NBA players, the college coaches, the college fans, etc. that benefit by systematically underpaying young basketball players. To be honest, I have a hard time watching college athletics these days. It makes me feel sick to my stomach thinking of all of the relatively well-off folks who benefit from young (and often poor) basketball players being paid much less than they are worth.

Last edited by Dan Rosenbaum on Fri Sep 23, 2005 11:42 am; edited 1 time in total

HoopStudies

Joined: 30 Dec 2004
Posts: 705
Location: Near Philadelphia, PA

Posted: Fri Sep 23, 2005 11:38 am Post subject:

WizardsKev wrote:

I could quibble with the #s, but this raises something that should have been and perhaps was raised before -- maybe the rookie contract should give credit for time served in another league, like college. Essentially the D-league is doing that now. Guys won't necessarily be in the NBA making money. They'll be in the NBDL. Why not be able to give unrestricted contracts to players after they've served time elsewhere? (I can think of reasons, but I'd rather just voice this side for now.) Makes for a more interesting thought process at least (and Kevin's calculations much harder). But it also makes that "money lost" a smaller percentage.
_________________
Dean Oliver
Author, Basketball on Paper
The postings are my own & don't necess represent positions, strategies or opinions of employers.

Mike G

Joined: 14 Jan 2005
Posts: 3563
Location: Hendersonville, NC

Posted: Fri Sep 23, 2005 12:07 pm Post subject: Re: , aoll

Dan Rosenbaum wrote:

... players in their first four years in the league are dramatically underpaid ...
... rather than focusing on the few young players who beat the odds and are overpaid, I direct my ire at the veteran NBA players, the college coaches, the college fans, etc. that benefit by systematically underpaying young basketball players. ...

So, I wonder if there are voluminous accounts of college basketball players who feel they have been treated like "meat", for us voracious college fans. I guess I haven't really thought of myself as being exploitive, every time I turn on the TV. I only get one channel, so I can watch the evening news, tennis, Letterman, some college ball. Every game is kinda like the 4th quarter of a blowout, where the benches have been emptied. All the good players of college age are in the pros (or declared themselves ineligible).

The great players are missing, the role players have moved into starring roles, and practice players are starting. College coaching was just coming into its own as a hugely-respected profession, when the talent pool was yanked out from under them. I forget, who are these "young players I seem to detest"?

kjb

Joined: 03 Jan 2005
Posts: 864
Location: Washington, DC

Posted: Fri Sep 23, 2005 3:03 pm Post subject:

HoopStudies wrote:

WizardsKev wrote:

I could quibble with the numbers too, or at least with some of the assumptions. What I was trying to do was a straight apples to apples comparison of a superstar who entered the league from HS vs. going to college.

If the NBA truly wants kids to spend some time in college, they ought to implement something like what you're talking about here. Create some kind of financial incentive to staying in school. One way would be to credit time in college after the first year toward getting to that max contract. I don't have time to adjust the spreadsheet to see the effect that could have on career earnings, but I think it would be significant.

Right now, the system has an incentive to getting into the league as fast as possible to get the next contract at as young an age possible. Personally, I don't see the big deal in letting high school grads jump straight to the NBA. But, if the league wants to stop the trend, they need to tweak the system.

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