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May 30, 2012
Market Advantage
New York vs. L.A.

by Neil Paine

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Reading the Baseball Think Factory off-topic NBA thread, I came across a discussion about the Lakers' uncanny ability to reload every few years by acquiring All-Star/Hall of Fame-level talent. Commenter "Booey" said:

"Compare the way LA has built their contending teams with those of the Spurs or Thunder - whose Big 3 were all their own draft picks - and it's not hard to conclude that the Lakers have a little more good fortune on their side when it comes to building winners. To their credit, they've always had good management and usually seem to sign the right players (unlike say, the Knicks) and they deserve props for that. But other teams have good management too and still don't have the opportunity to just pick up a HOFer or two every 4 years or so when their teams playoff performance starts to slide a little.

Laker fans have told me many times that other fanbases don't like them because they're just jealous of the Lakers success. That's partly true, but it's also that those fans are jealous of the Lakers seemingly unfair opportunities to be successful."

This overall topic is an interesting one that can't be addressed in just one post, but the part I'm going to pick out is the idea of the Lakers vs. Knicks--specifically, why exactly haven't the Knicks been as successful as the Lakers since the early 1970s?

On paper, they should be. New York is a bigger media market than Los Angeles, and the NYC metro area has L.A. beat on population by about 6 million people. Both teams can afford massive payrolls--since Basketball-Reference has complete salary data (1991), only Paul Allen's Portland Trail Blazers and Mark Cuban's Dallas Mavericks' payrolls have been in the same price range as the Knicks and Lakers:

Rk	Franchise	1991-2012 Payroll
-----------------------------------------
1.	NYK		$1,449,472,651
2.	POR		$1,238,589,744
3.	DAL		$1,203,997,242
4.	LAL		$1,149,621,676
5.	ORL		$1,061,884,378

The difference, of course, has been that the Knicks' money has gone to mediocre players relative to those the Lakers have employed. Why have the Knicks used inferior talent? Let's look at where each team received the most of their Estimated Wins Added (John Hollinger's PER-based 'wins created' metric) over the 1974-2012 period:

How Acquired	Lakers EWA	Knicks EWA	LAL +/-
-------------------------------------------------------
Trade		 910.4		 523.5		386.9
Draft		 713.3		 616.1		 97.3
Free Agency	 345.6		 274.9		 70.7
Pre-1974	  53.6		 136.5		-82.9
-------------------------------------------------------
Total		2023.0		1551.0		472.0

Although the Lakers have outfoxed the Knicks in free agency and the draft, that advantage only works out to 4.3 combined wins per year since 1974. The far bigger area of disparity is in the trade market, where the Lakers are 9.9 wins/year better than the Knicks over nearly four decades.

So who were the Lakers' biggest trade acquisitions by EWA, and was there any systemic advantage L.A. leveraged to acquire them?

Player			Trade Date	From	To	 EWA
-------------------------------------------------------------
Kobe Bryant		07/11/1996	CHH	LAL	279.3
Kareem Abdul-Jabbar	06/16/1975	MIL	LAL	249.0
Pau Gasol		02/01/2008	MEM	LAL	 75.6
Byron Scott		10/10/1983	SDC	LAL	 62.1
Lamar Odom		07/14/2004	MIA	LAL	 57.6

Some of that is flat-out shrewd GM-ing. For instance, Jerry West traded Vlade Divac, a 28-year-old center who had produced about 11 EWA/year for L.A. over the previous three seasons (though his PER+D* had declined from 19.9 to 16.8 in 1996; * = Hollinger's Player Efficiency Rating, but with a team defensive adjustment to make it explain 100% of efficiency differential, and the vaunted 95% of team wins), to Charlotte for the newly minted 13th overall pick in the '96 Draft, an untested 18-year-old named Kobe Bryant. This was a trade anyone theoretically could have made if they were willing to part with a Divac-level talent... and had the guts to send him away straight-up for just the fifth prospect ever to jump directly from high school to the NBA. That same summer, the Knicks would end up sending Anthony Mason (a 10-EWA player in '96) to the Hornets for Larry Johnson, a player whose trade value in 1996 was much higher than Bryant's.

(I say “theoretically” because of this post at The Painted Area, which describes Jerry West talking John Calipari & the Nets out of taking Kobe at #8 that year under the threat that he wouldn't play for New Jersey. But the post admits that it's hard to picture the über-competitive Bryant declining the challenge of playing for a lesser franchise than the Lakers. Harder still to imagine is the idea that Kobe would pass up the chance to play in New York City for the Knicks.)

Likewise, the Lakers made an apparent equal-value trade when they acquired Lamar Odom (plus Caron Butler, Brian Grant, and picks) for Shaquille O'Neal in 2004. At the time, O'Neal was 32 but had posted 22 EWA/year over the previous three seasons; Odom had rehabilitated his career the year before with a 12.3-EWA season in Miami, but Butler was coming off a horrible sophomore season (following a solid rookie campaign), and Grant was declining rapidly. You could argue that L.A. would not have been able to haul in both Odom and Butler (whom they later turned into Kwame Brown, who was in turn included in the Pau Gasol trade) without signing Shaq back in 1996, a deal made possible because Los Angeles afforded The Big Aristotle opportunities to pursue his musical and acting interests. But with little leverage, Mitch Kupchak acquired Odom for a future HoF big man who delivered 42.3 EWA and one championship in his 3½ years in Miami. Meanwhile, the Knicks never had a chance to pick up someone like Odom because they were over the cap and saddled with bad contracts to players like Allan Houston, Antonio McDyess, and Tim Thomas.

The Byron Scott deal is more interesting. In 1983, the Lakers shipped Norm Nixon, a solid 28-year-old guard--albeit one with a reputation as a "troublemaker", coming off a bad season (13.1 PER+D)--plus replacement-level G Eddie Jordan and a pair of second-rounders (one of which did become Jeff Hornacek) to the Clippers for Swen Nater and Scott, the fourth overall pick in the '83 Draft. It was a different time, when high draft picks weren't valued anywhere near as much as they are today (Cleveland wantonly dealt every top-five pick Ted Stepien could get his hands on), and Nixon's profile was boosted by the "Championship Halo" of playing alongside Magic Johnson in the Lakers' '80 and '82 title runs. Nowadays it would be hard to imagine a team dealing a dynamic 22-year-old scoring wing who just went #4 overall for a 28-year-old league-average SG, but the deal wasn't considered a heist by the Lakers--many L.A. fans were actually upset with Nixon's departure. At any rate, the Knicks were recovering from a "failure to launch" at the time and had returned to the playoffs behind Bernard King and Bill Cartwright, the only players they could have possibly traded for a high pick.

Of course, the swaps for Abdul-Jabbar and Gasol are what people think of when discussing L.A. possibly having an unfair advantage in the trade market.

In 1975, Abdul-Jabbar demanded a trade out of Milwaukee because it didn't meet his cultural needs, eyeing New York or Los Angeles as potential destinations instead. The Knicks made an offer of Walt Frazier, Phil Jackson, John Gianelli, and $1 million for Abdul-Jabbar, but the Bucks turned it down, using N.Y.'s offer as leverage to extract Junior Bridgeman, Dave Meyers, Elmore Smith and Brian Winters from the Lakers for Kareem. The Bucks made the right decision: the Knicks' proposed haul would have delivered just 23.5 future career EWA (Frazier 23.1, Jackson -1.8, Gianelli 2.2), and even though the value of $1 million in 1975 was an additional 37.5 EWA, L.A.'s return ended up producing 125.5 future career EWA (Bridgeman 49.9, Meyers 11.1, Smith 23.5, and Winters 41.0).

The simple truth is that although New York was given the same preferential treatment from Abdul-Jabbar as the Lakers, and Knicks GM Eddie Donovan told Milwaukee's Wayne Embry that nobody on their roster was off-limits, they simply did not have any players the Bucks wanted, nor did they have the ability to go out and get anyone for Milwaukee. When Willis Reed, Dave DeBusschere, and Jerry Lucas all retired after the 1973-74 season, the Knicks' roster was left depleted. The Lakers, on the other hand, retooled their great early-70s teams through a series of shrewd moves with an eye on the draft, taking Meyers & Winters themselves and grabbing Bridgeman & Smith via trades. Abdul-Jabbar's binary New York-or-Los Angeles ultimatum was arbitrary and an opportunity that the typical team didn't have, but the Knicks were given as much of an opportunity as L.A. to acquire Abdul-Jabbar.

As for Gasol, much has been written about the one-sided nature of the trade that netted him from Memphis. Time has been somewhat kinder to the deal (in the passing years, Marc Gasol has blossomed into a legitimate All-Star), but not by much--L.A. still gave up just 34.8 future career EWA (Kwame Brown 1.4, Javaris Crittenton -0.5, Marc Gasol 33.5, Donte Green -1.3, Greivis Vasquez 1.7) to get 75.5 (75.6 from Gasol, -0.1 from Devin Ebanks) in the exchange. For the conspiracy-minded, Grizz GM Chris Wallace allegedly did not give every team in the league a chance to submit their best offer for Gasol, stoking concerns that the Lakers picked up the All-Star forward for less than market value. Then again, the Bulls reportedly offered Andres Nocioni, Tyrus Thomas, Joakim Noah, Thabo Sefolosha, Adrian Griffin, and picks for Gasol and Hakim Warrick, which would have delivered Memphis 45.5 EWA but sent Chicago 90.8, a bigger net difference than the real-life Lakers trade. Basically, the Grizzlies were never going to get equal value in the Gasol trade because they had little to no leverage, so it would have been a one-sided swap no matter the trade partner. A team like the Knicks wasn't a player in discussions because they were capped out and terrible; for instance, that year they devoted $19M to a malcontent who played 24 games.

Conversely, here were the Knicks' best trade pickups:

Player		Trade Date	From	To	EWA
----------------------------------------------------
Charles Oakley	06/27/1988	CHI	NYK	52.2
Bernard King	10/22/1982	GSW	NYK	40.0
Bob McAdoo	12/09/1976	BUF	NYK	38.6
Stephon Marbury	01/05/2004	PHO	NYK	38.2
L. Sprewell	01/21/1999	GSW	NYK	34.1

While each was good for a time, none added to New York the kind of long-term value L.A. received from their five best trade acquisitions. Oakley was in N.Y. for 10 years, but King was a Knick for just four full seasons, McAdoo two (half of '77 + '78 + '79 + half of '80), Marbury four (counting 2008 as a half-year), and Sprewell five. The Knicks just don't trade for long-term assets, while the Lakers manage to catch players when they still have productive seasons left. Here's a great illustration: weighted by EWA, the average age of Los Angeles' trade acquisitions since 1974 is 23.9 years old; that number for New York is 26.3.

Yet for all of L.A.'s domination of the trade market, they've devoted the sixth-smallest proportion of their payroll to players originally acquired via trade since 1991:

Franchise	FA (Rk)		Draft (Rk)	Trades (Rk)
-----------------------------------------------------------
ATL		21% (11)	32% (15)	47% (18)
BOS		19% (16)	38% ( 9)	43% (23)
CHA		11% (29)	41% ( 4)	48% (17)
CHI		23% ( 8)	40% ( 6)	36% (28)
CLE		16% (20)	36% (10)	49% (16)
DAL		13% (26)	17% (30)	70% ( 1)
DEN		19% (15)	30% (20)	52% (11)
DET		25% ( 6)	32% (14)	43% (24)
GSW		12% (28)	39% ( 7)	49% (15)
HOU		14% (24)	31% (18)	55% ( 7)
IND		 7% (30)	49% ( 3)	44% (22)
LAC		16% (21)	35% (11)	49% (13)
LAL		28% ( 3)	29% (21)	43% (25)
MEM		14% (25)	31% (19)	55% ( 6)
MIA		23% (10)	22% (28)	56% ( 5)
MIL		15% (22)	32% (16)	53% ( 9)
MIN		19% (14)	41% ( 5)	40% (26)
NJN		14% (23)	24% (25)	62% ( 2)
NOH		21% (12)	33% (13)	46% (20)
NYK		23% ( 9)	23% (27)	54% ( 8)
OKC		12% (27)	39% ( 8)	49% (14)
ORL		28% ( 2)	34% (12)	37% (27)
PHI		18% (18)	31% (17)	51% (12)
PHO		37% ( 1)	19% (29)	45% (21)
POR		18% (17)	26% (24)	56% ( 4)
SAC		19% (13)	28% (23)	53% (10)
SAS		24% ( 7)	50% ( 2)	27% (29)
TOR		17% (19)	24% (26)	59% ( 3)
UTA		25% ( 5)	56% ( 1)	19% (30)
WAS		25% ( 4)	28% (22)	46% (19)

The big elephant in the room is the perception that the Lakers have consistently had better personnel evaluators than the Knicks. But in their stints with other teams, Knick executives have a .502 winning percentage all-time, better than their .498 record with the Knicks themselves (those numbers become .516 and .503 since the early 70s). Now, this could just mean the Knicks have had average GMs over the years, while the Lakers have had significantly above-average executives, although the admittedly small sample of Laker GMs who went elsewhere--Pete Newell and Jerry West--are a combined .450 outside of L.A.

But even if the Knicks' front-office talent has been no worse than L.A.'s in their other stints, in NYC they haven't done anywhere near the job of leveraging their market into dominance as the Lakers have. Some of it is the outsized impact a few correct decisions can have in the NBA, if those choices are made on superstars. Bringing in Abdul-Jabbar, O'Neal, and Bryant alone was worth 717.6 EWA in 37 years, or about 513.8 more wins than if they'd given their minutes to league-average (15 PER+D) players over that span. That's a difference of nearly 14 wins per year by grabbing a superstar instead of an average player--which means going 55-27 instead of 41-41 each season. Meanwhile, the Knicks have brought in that caliber of player just once--Patrick Ewing--and consistently fail to hit home runs in trades and free agency despite devoting huge sums to those areas.

It's not that the Lakers have a systemic advantage over the Knicks; in fact, the two teams should consistently be at the top of the heap based on their market size and fan support. But while the Lakers have executed a number of incredibly shrewd trades that led to a massive amount of surplus value, the Knicks' trades and free-agent purchases have failed to produce franchise-altering impact players. A cycle that started with New York's inability to re-tool from their 1970 and 1973 championship teams--while the Lakers quickly transitioned from their 1972 title to pick up young assets to use in the Abdul-Jabbar trade--continued into the late 1970s and 1980s with blown draft picks like Micheal Ray Richardson, and an unsuccessful attempt to surround Patrick Ewing with a championship supporting cast. Since their surprise Finals run in 1999, the Knicks have spent a great deal of money on the wrong players while the Lakers continued to receive value from free agent Shaquille O'Neal and trade pickups Kobe Bryant, Pau Gasol, & Lamar Odom. The poor trading performances of GMs like Scott Layden and Isiah Thomas led to bloated Knicks teams without draft picks or the flexibility to add players in the trade market, the biggest area where Los Angeles has killed New York since the 1970s.

The nature of the NBA is that a few good and/or lucky decisions can lead to huge benefits for years. The Knicks caught a break when they drafted Ewing, but the Lakers have made their own breaks by going out and getting Abdul-Jabbar, O'Neal, Bryant, Gasol, Odom, and others, while New York hasn't brought in a player of that caliber outside the draft since trading for Earl Monroe in 1971. If the Knicks want to catch up and become Lakers East, they need a lot of luck, but they must also put themselves in a position to acquire true franchise players (particularly via trade). It's how the Lakers have been built, and how they've been able to crush their mega-market rival so thoroughly over the past four decades.

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

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