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February 23, 2011
By the Numbers
Rating Trade Value

by Kevin Pelton

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The month of February is notable for packing so many holidays into just 28 days: Valentine's Day, President's Day and, of course, Bill Simmons' annual trade value column. Just in time for the trade deadline, Simmons once again counted down the league's 50 most valuable players, taking into account age and contract status.

I've always wanted to do a statistical version of the trade rankings, and I finally think our three-year WARP projections are advanced enough to put some science behind the exercise. You may remember the three-year WARP projections, which look at the development of similar players over the next three seasons, from last year's series previewing 2010 free agency. Since then, I've made one tweak. Based on the preliminary research into aging patterns I did earlier this season, I've removed player-seasons prior to 1990 from the database, which should provide a more accurate view of how veteran players are maintaining their value longer.

The WARP projections are still a blunt instrument, which means they tend to do better at identifying classes of players than ranking them. At the extremes, for example, the difference between the most valuable wing players can come down to whether Michael Jordan was retired at the same age, taking him out of the pool of available comparables.

The bigger issue I had to confront is what, exactly, constitutes trade value. From a hypothetical standpoint, the answer is easy: trade value is the amount a player contributes above and beyond his contract. That implies, though, that teams would be indifferent between signing a max free agent who contributes an equivalent number of wins and signing a replacement-level talent for the minimum.

I'm not sure how to answer this question besides to point out that much of the reason teams get talent in return when they trade players is precisely because they're also taking back equal salary. In the rare cases of pure salary dumps--like Al Jefferson to Utah this past summer--the return in terms of talent tends to be relatively paltry, which we would expect given teams with cap space have the option of signing free agents and giving up nothing in return.

Lastly, I had to address free agency. My assumption was that all players will sign contracts for their market value or the max, whichever is greater. This implies that impending free agents have no net value, which may not be fair based on the market for players like Carmelo Anthony and Nenê, but I'm not sure how else to account for future salaries.

Let's run through one example before counting down Simmons' top 50 in my reverse order. This method provides something like a worst-case scenario for Anthony. His three-year WARP projection calls for 6.2, 5.5 and 3.6 wins over the next three seasons, respectively. The rest of this year, based on his current performance, Anthony should provide 2.2 WARP for a total of 17.5. At our assumed cost of $2.5 million per win, Anthony will be worth $43.9 million. Over that same span, based on his newly signed extension, he will be paid $66.8 million. That means his net trade value is -$23.0 million, one of the worst figures of the players ranked by Simmons. For each player, I'll report both projected WARP and net value as well as providing some commentary.

NEGATIVE VALUE

50. Dirk Nowitzki, Dallas (13.6 WARP/-$34.4 million)
49. Carlos Boozer, Chicago (8.2 WARP/$-28.2 million)
48. Carmelo Anthony, Denver (17.5 WARP/-$23.0 million)
47. Kobe Bryant, L.A. Lakers (29.5 WARP/-$17.3 million)
46. Chris Bosh, Miami (16.5 WARP/-$15.9 million)
45. Amar'e Stoudemire, New York (20.4 WARP/-$14.6 million)
44. Luis Scola, Houston (6.5 WARP/-$14.5 million)
43. Paul Pierce, Boston (15.4 WARP/-$13.7 million)
42. Rudy Gay, Memphis (16.4 WARP/-$12.5 million)

The alternative title for this section is "2010 free agents," as seven of the nine players signed new contracts last summer. In fact, since Anthony signed yesterday, Bryant is the only holdover contract on this list. SCHOENE tends to be overly pessimistic when it comes to projecting the aging of players in their mid-30s, and removing the 1980s from the database cannot totally overcome this tendency. Nowitzki, for one, might be worth 13.6 WARP this season--it seems unlikely that will be his total over the next three-plus years.

This group does reveal some legitimate reasons for concern. Anthony and Stoudemire are both being paid like elite players when their performance doesn't quite justify that level (even if I do think the WARP projection underrates Anthony, who has totaled 21.9 WARP the last three seasons and is still in his prime). As Nate Silver of FiveThirtyEight.com pointed out in his analysis of the Anthony trade, the way teams win in the NBA is either by getting players who are underpaid or paying more than their opponents. The Knicks have failed on the first count with Anthony and Stoudemire, which is what separates their superstar duo from the Heat's trio (excepting, apparently, Bosh).

The other interesting case here is Bryant. His projected performance is very good--his WARP total ranks 12th overall, which seems reasonable given his age. It's just that Bryant is going to be making significantly more money than anyone else in the NBA over the next three years. His salary of $91.1 million in that time period is nearly $23 million more than the closest peer (Nowitzki) ranked by Simmons. In 2013-14 alone, Bryant will be paid $30.5 million at age 35. Under the current CBA, that's not a real problem for the Lakers, willing tax payers. In the event of a hard cap, Bryant's salary could become an issue.

THE MOST ACCURATELY PAID STAR

41. Pau Gasol, L.A. Lakers (25.0 WARP/$0.0 million)

For whatever reason, the players on Simmons' list either have positive value or significantly negative value. The middle ground is made up entirely of Gasol, whose salary of $62.4 million over the next three-plus seasons is almost exactly commensurate with what his production is likely to be worth.

BETTER THAN FREE AGENCY

40. Kevin Garnett, Boston (19.5 WARP/$1.7 million)
39. Danny Granger, Indiana (18.0 WARP/$2.1 million)
38. Tony Parker, San Antonio (17.6 WARP/$2.2 million)
37. Steve Nash, Phoenix (10.9 WARP/$3.1 million)
36. Nenê, Denver (14.1 WARP/$3.3 million)
35. Zach Randolph, Memphis (12.7 WARP/$3.3 million)
34. Tim Duncan, San Antonio (20.7 WARP/$3.6 million)
33. David West, New Orleans (9.6 WARP/$3.9 million)
32. Lamar Odom, L.A. Lakers (11.5 WARP/$4.6 million)
31. LaMarcus Aldridge, Portland (19.5 WARP/$4.7 million)

Several of these players--Nenê, Randolph and West--are due to become free agents soon, so their value is simply in terms of being worth more than their contract the rest of this season. Most of the others are working under long-term deals that are relatively fair for their level of production, whether it's as a role player like Odom, a rising youngster like Aldridge (a good guess to outperform that projection) or veterans aging gracefully like Duncan and Garnett.

THE YOUNG BIG MEN

30. Derrick Favors, New Jersey (8.5 WARP/$4.8 million)
29. Andrew Bogut, Milwaukee (19.2 WARP/$5.3 million)
28. Andrew Bynum, L.A. Lakers (23.7 WARP/$6.3 million)
27. Joakim Noah, Chicago (17.2 WARP/$7.5 million)
26. Brook Lopez, New Jersey (15.5 WARP/$10.0 million)
25. Paul Millsap, Utah (15.6 WARP/$11.6 million)

WARP projections continue to like the New Jersey Nets. Long-time readers will recall that the Nets always came out very well when we compared the contenders for max free agents last summer, and here New Jersey has a pair of big men ahead of either New York superstar. Rookie contracts play a big factor in that. Favors may be a few years away from being a quality starter, but in 2013-14 his $6.0 million salary could look like a bargain.

GRAB BAG

24. Deron Williams, Utah (26.4 WARP/$11.7 million)
23. Kevin Martin, Houston (21.2 WARP/$12.6 million)
22. DeJuan Blair, San Antonio (10.4 WARP/$16.6 million)
21. Monta Ellis, Golden State (23.2 WARP/$17.9 million)
20. Greg Monroe, Detroit (12.4 WARP/$19.8 million)

If you see something uniting these five players, you're ahead of me. Williams was one of the most surprising results to me. For whatever reason, similar players slipped in value, making him something of a second-tier star. Blair has one of the lowest WARP projections of anyone on this list, but still belongs because his contract is so favorable. Monroe, meanwhile, is another example of how valuable decent contributors are during the course of their rookie deals.

CORE PIECES

19. Chris Paul, New Orleans (31.6 WARP/$20.8 million)
18. Josh Smith, Atlanta (27.9 WARP/$23.1 million)
17. Tyreke Evans, Sacramento (20.1 WARP/$25.7 million)
16. Al Horford, Atlanta (25.6 WARP/$26.1 million)
15. DeMarcus Cousins, Sacramento (15.9 WARP/$26.2 million)
14. Manu Ginobili, San Antonio (27.4 WARP/$27.5 million)

We move both into the teens and above the $20 million mark in terms of value. Paul's low ranking is another unexpected outcome, especially since SCHOENE doesn't know that his left knee is something of a ticking time bomb. Paul's production is top-10, but he's also paid accordingly. Horford's location reflects both the value he provides during the final year of his rookie contract as well as the strong deal the Hawks got with his extension thanks to the looming threat of a new CBA. Cousins jumps up more than any other player, partially because his rookie contract is so friendly but also because the numbers can't account for his off-court issues. Lastly, SCHOENE continues its love affair with Ginobili, one of the few veterans for whom no slippage is forecast.

YOUNG AND UNDERPAID

13. Serge Ibaka, Oklahoma City (20.7 WARP/$34.3 million)
12. Rajon Rondo, Boston (28.2 WARP/$35.1 million)
11. John Wall, Washington (22.4 WARP/$35.3 million)

Ibaka and Wall both figure to get a lot better before commanding a high salary. Ibaka adds value because he's not only on a rookie deal but a relatively small one as the 24th overall pick. As for Rondo, his contract might be the single smartest deal from the team's perspective in the league. All the players ahead of Rondo are there because of outside factors--their salary is limited by either their rookie contract or the league maximum. The Celtics simply locked up Rondo at the right time to a very reasonable contract. Had he landed on the market last summer, there is no question Rondo would be maxed out now.

THE NEAR-ELITE

10. Dwyane Wade, Miami (38.7 WARP/$40.6 million)
9. Kevin Love, Minnesota (30.6 WARP/$42.0 million)
8. Eric Gordon, L.A. Clippers (33.9 WARP/$51.4 million)
7. Stephen Curry, Golden State (29.6 WARP/$52.3 million)

Guys just a step below the top building blocks in the league. Wade is, in practice, far and away the NBA's top second option--though obviously he's really a No. 1 in a unique partnership. Gordon, meanwhile, has a chance to usurp that title at some point in the future. I've been hesitant to promote him quite this high because Gordon developed so quickly this season, but SCHOENE is ready to make that leap while incorporating his first two NBA seasons, which were less impressive.

Monta Ellis came out as surprisingly valuable earlier. Still, if the Warriors decide to keep only one of their undersized, defensively challenged guards, there is no doubt it should be Curry.

THE UNTOUCHABLES

6. Blake Griffin, L.A. Clippers (35.5 WARP/$60.5 million)
5. LeBron James, Miami (47.4 WARP/$61.2 million)
4. Dwight Howard, Orlando (51.1 WARP/$62.4 million)
3. Russell Westbrook, Oklahoma City (40.0 WARP/$64.9 million)
2. Derrick Rose, Chicago (41.9 WARP/$67.2 million)
1. Kevin Durant, Oklahoma City (47.1 WARP/$70.5 million)

There are six guys in the NBA who stand out as far more valuable than anyone else. Each is expected to provide a premium equivalent to an entire team payroll over the next three-plus years. As mentioned earlier, the WARP projections aren't quite sophisticated enough to separate them, but they do tell us that Westbrook belongs among Simmons' top five. That's a scary proposition, because it means the Thunder not only has two of these guys but also the league's 13th most valuable player in Ibaka. Oklahoma City still has to figure out what other pieces will go around those three players, but they have the potential to be every bit as good as Miami's trio.

Kevin Pelton is an author of Basketball Prospectus. You can contact Kevin by clicking here or click here to see Kevin's other articles.

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