Will Big-Market NBA Teams Fare Any Better in 2014-15?

Jim Cavan@@JPCavanContributor IJune 17, 2014

Most Valuable Player San Antonio Spurs forward Kawhi Leonard, center celebrates with the team after Game 5 of the NBA basketball finals against the Miami Heat on Sunday, June 15, 2014, in San Antonio. The Spurs won the NBA championship 104-87. (AP Photo/Tony Gutierrez)
Tony Gutierrez/Associated Press

From a pure basketball perspective, the triumph of the San Antonio Spurs in the NBA Finals was a vindication of many things: the power of system over superstars, the importance of reveling in one’s role and—above all—one team’s quest to exorcise the demons of defeat.

But San Antonio also proved another, more philosophical point: that spending the most doesn’t always net you the same.

Operating in one of the league’s smallest markets, the Spurs have managed to foster a competitive consistency that far outstrips the cultural and economic clout of their namesake city.

What chance do San Antonio’s big-market brothers have of making good on their supersized investments next season? Of exacting revenge for being outspent in the realm of intellectual capital?

The harsh truth is, they've never been worse.


An Imperfect Profit

First, it’s important to specify what we mean when we say “big market.” Basically, we're talking about the following 10 teams: the New York Knicks, Brooklyn Nets, Los Angeles Lakers, Los Angeles Clippers, Miami Heat, Chicago Bulls, Boston Celtics, Dallas Mavericks, Houston Rockets and Atlanta Hawks.

Next, let’s quickly review the NBA’s unique economic structure to better understand why some teams choose to spend the big bucks while others remain content to merely count the turnstile clicks.

Unlike its Major League Baseball counterparts, NBA teams operate according to what’s called a “soft cap.” Meaning that, while franchises are free to spend above and beyond the designated limit, doing so quickly becomes prohibitively expensive.

So where the Brooklyn Nets boasted a league-high 2013-14 payroll of $102 million, the total bill after tacking on the luxury tax came out closer to $186 million (per Yahoo! Sports’ Eric Freeman).

BROOKLYN, NY - July 18: Nets majority owner Mikhail Prokhorov joins Kevin Garnett #2, Paul Pierce #34, and Jason Terry #31 of the Brooklyn Nets during a press conference at the Barclays Center on July 18, 2013 in the Brooklyn borough of New York City.  NO
Nathaniel S. Butler/Getty Images

Needless to say, dropping that kind of coin for an appearance in the Eastern Conference Semifinals probably isn’t what owner Mikhail Prokhorov had in mind.

Still, there’s most definitely a positive correlation between a team’s willingness to spend and their likelihood of making the postseason. Per HoopsHype.com, of the 15 highest-spending teams this season, 11 of them earned a playoff berth.

Consequently, only five of the 15 most frugal franchises made the playoffs.

Without knowing the financial blueprints of every NBA team, it’s impossible to say whether a given front office considers making the playoffs money well spent. Different owners will understandably have different motivations, from attempting to buy a banner to simply focusing on the bottom line.

Presumably, though, the one dream all owners share is to be the one holding the Larry O’Brien trophy when all’s said and done. As such, diagnosing the state of big-market versus small-market teams means gauging which has proven the more potent NBA force.

MICHAEL CONROY/Associated Press

In this respect anyway, the aforementioned 10 big-market teams got that designation for a reason: Over the last 30 years, the Lakers, Celtics, Bulls, Heat and Mavericks have accounted for 22 championships, with the other seven belonging to the Spurs and Detroit Pistons.

So answering the question “How will big market teams fare next season?” is less about correcting a history of misguided spending than it is reclaiming their status as the unquestioned NBA elite.

Can San Antonio repeat as champs? Might the Portland Trail Blazers or Indiana Pacers emerge as small-market contenders? Could the Philadelphia 76ers—a booming media market, if not a team steeped in championships—build the league's big-spending powerhouse of the future?

Tony Gutierrez/Associated Press

That’s certainly what newly-minted Commissioner Adam Silver is hoping will happen. Following the lockout-shortened 2011-12 season, Silver—then serving as deputy commissioner—spoke with USA Today’s Jeff Zilligitt about what he hopes will prove to be a more equitable league landscape:

"It's still too early to predict what the behavior will be of our teams when you combine the new salary system with revenue sharing," Silver said. "We're hopeful, based on the early results, that we've achieved much of what we set out to accomplish in collective bargaining."

Larry Bird, Indiana's president of basketball operations and three-time champion with the Celtics, echoed Silver’s optimism:

You'll see a big difference in two to three years. This luxury tax that they put in, there's very few teams that will go over that, and I think the only way they go over that is if they get that one player who can get them to the next level. The gap is going to start closing, and it's not only going to be good for the owners it's going to be great for competitive balance. It's going to be great for the players, too.

Was San Antonio’s championship merely a prelude to a brave new world of permanent small-market insurgence? Or—the league’s superstar-dependent structure being what it is—will we look back on the 2010s as just another decade of big-market dominance peppered with feel-good interludes?

As for the NBA's heaviest payroll hitters, their prospects are about as diffuse as the people filling their arenas.


A Tale of Three Cities

Uncredited/Associated Press

Of the league’s four New York and L.A.-based teams (which, not surprisingly, boasted four of the NBA’s top-five largest payrolls), only two—the Clippers and the Nets—cracked the 2013 playoffs.

Of the four, the Clippers stand the best chance of making ultimate good on their $73 million investment: Coming off a franchise record 57 wins, L.A. stands to return most—if not all—of its core players. As such, depending on how the Spurs and Oklahoma City Thunder bolster their ranks, the Clippers could easily emerge as legitimate title contenders this time next year.

Meanwhile, despite Kobe Bryant’s imminent return and nearly $30 million in cap room to spend, the Lakers could once again be facing the prospect of a lost season. With links to this summer’s free-agent class speculative at best, L.A.’s first franchise could be looking to 2015 to make their next big move.

Kathy Willens/Associated Press

Over in New York, the outlook is two shades of bleak. By now, it’s safe to say the Knicks’ frontcourt gambit—pairing Carmelo Anthony with Amar’e Stoudemire and Tyson Chandler—has backfired spectacularly. And with 'Melo poised to test free agency, New York’s near-future prospects remain about as bright as they have for the better part of the last 40 years—which is to say, subway-tunnel dark.

Across the river in Brooklyn, Prokhorov’s record-setting shell-out proved to be what cynics suggested from the start: a one-year run with little chance of succeeding and even less margin for error.

The Heat? Depending on whether or how LeBron James, Dwyane Wade and Chris Bosh restructure their current deals, we could be looking at another season of steadfast contention or—if the Big Three abandon ship—a lottery-doomed disaster.

And while the Bulls seem like the perfect candidates to pair their core of Derrick Rose and Joakim Noah with some cap-exceeding pieces, owner Jerry Reinsdorf has long been loathe to line the league’s coffers.

Even Dallas—three years removed from its first title and boasting an owner not afraid to pull the tax trigger—has the look of an aging team content with dying a slow standings death.


Barbarians at the Gates?

Eric Gay/Associated Press

Given how the league’s moneyed elite are shaping up, you can’t help but wonder whether Stern and Silver’s gamble—of reimagining the NBA along more egalitarian lines—might be poised to pay off sooner than expected.

Back in 2013, right around the time when the Heat, Pacers, Spurs and Memphis Grizzlies were battling it out in their respective conference finals, Forbes' Patrick Rishe encapsulated the philosophical debate at the heart of the NBA’s most recent lockout:

Whether a preponderance of smaller-market franchises comprising the NBA’s Final Four is good for raising the general profile and long-term revenues for the league is tough to say.  Indiana versus either Western Conference foe in the 2013 Finals will surely attract fewer eyeballs to the screen, rendering casual sports fans indifferent to the proceedings, which is never good.  However, if small-market teams are on a more level playing field today than 5 years ago, this could boost hope and consumer demand in such markets across the league.

Rishe’s remarks invite an interesting counter: If small-market success results in greater overall revenue, won’t the New Yorks and L.A.s of the world have more incentive to eschew the luxury tax for the sake of a one- or two-year spending spree?

Would that, in turn, make the next collective bargaining agreement an even more caustic slog than the last one?

In the face of such a vicious cycle, the mind recoils.

Eric Gay/Associated Press

And yet, it’s impossible not to appreciate how, out of such seeming collaborative chaos, you could get such simple dueling truths:

First, the biggest of the NBA’s big markets are no closer to championship glory than they were two years ago.

And second: San Antonio’s emergence as a model of creative frugality—where even future Hall of Famers will take a pay cut for a chance at a championship’s more esoteric rewards—might just be the best thing that could’ve happened to the league.


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