"The Extra 2%" and the NBA

In many ways, Michael Lewis’ "Moneyball" revolutionized the way people see baseball, while kick starting the advanced analytics movement in other sports. "The Extra 2%" by Jonah Keri details the improbable success of the Tampa Bay Rays and will undoubtedly become the next must-read tale for savvy sports fans -- and its lessons can be usefully applied to basketball as well as baseball.

Finishing last place in their division in nine of their first ten seasons with an average record of 65-97, the Tampa Bay Rays were a perennial laughingstock in MLB. Until two seasons ago when, armed with innovative Wall Streeters making personnel decisions, the Rays underwent a dramatic turnaround, making it to the World Series in spite of a payroll just one fifth that of their in-division rivals, the New York Yankees.

While baseball and basketball have many differences both in how the games are played and how teams are built, there are some common threads, one of which was highlighted by NBA decision makers this past weekend at the MIT Sloan Sports Analytics Conference: you don’t want your team to be stuck in no man’s land. While conventional wisdom may suggest the more games a team wins, the closer it is to a championship, there is little value in a veteran-laden, cap-strapped roster winning 40 to 45 games in a season, as it will likely be in a situation with little room to improve itself.

When Andrew Friedman took over as GM of the Rays in the 2006 season, he quickly recognized this concept “Winning 66 or 71 games didn’t make a dramatic difference to us," he says in Keri's book. "It was about putting ourselves in position to win 92-plus.”

Preaching patience, Friedman stuck to that mantra the next season as well: “It wasn’t about constructing an optimal 25-man roster. A move we didn’t make in 2007 allowed us to make certain moves in the offseason.”

Building a championship team is an incredibly difficult task no matter the sport. Ultimately only one team can win each season, and the margin for error is so small that in order to have a chance, every move a team makes needs to be made in direct or indirect furtherance of that goal. Sacrificing flexibility and assets for short term gain may placate media and fans, but if the goal is more than mediocrity it’s not in a team’s best interest. As Rockets GM Daryl Morey said at the Sloan Conference, “Having a bunch of coachable guys is just enough to get beat.”

In the MLB, small market teams are at a major disadvantage, often having a fraction of the big clubs' budgets. To bridge the gap, teams like the Rays have to spend wisely, finding any market inefficiency they can to exploit. In the book’s foreword, Mavericks owner Mark Cuban explains the Rays’ strategy:

So they dream up new ideas, whether it’s to find a new relief pitcher, improve their brand, or build their profit margin. No one idea is likely to make a huge difference. But collectively, those ideas make the difference between winning and losing, or between winning a little and winning a lot. Those ideas, working together, result in that little edge the Rays are constantly looking for.

The Rays used a variety of methods to gain an edge over their opposition, many of which are applicable in one way or another to the NBA. The most noteworthy of which is their emphasis on player development. Keri writes:

The Rays needed more than raw talent, or even the ability to spot talent, to topple the Yankees and Red Sox. It took a player development system that could mold those draft picks, international signings, scrap-heap free agents, and trade targets into big league contributors. To that end, they employed two roving minor league instructors for the three biggest specialties -- two field coordinators, two hitting coordinators, two pitching coordinators -- instead of the standard one per skill.

“They’re throwing more resources at the minor leagues, emphasizing it more, than anyone else,” said Baseball America writer John Manuel.

While the NBA’s minor league system is considerably less useful when compared to the MLB’s, it’s clear that certain teams have long been at the forefront in experimentation, namely the Spurs, Mavericks, Rockets, and Thunder, each of whom runs their own D-League affiliate. It’s no coincidence that those are likewise among the teams most likely to use their flexibility to acquire additional draft picks and are usually regarded as having some of the highest emphasis on player development at the NBA level (along with a handful of others).

Looking at other unconventional ways NBA teams can get an edge, investing in statistical analysis is certainly atop the list, something more and more teams are getting involved in, with over 20 teams sending employees to the Sloan Conference this past weekend. Still, the level of investment varies among teams, and it’s no surprise the four teams mentioned above are also among those investing the most assets in analytics and have been doing so for quite some time.

Like their NBA counterparts, the Rays, too, are heavily invested in statistical analysis and a slew of other areas in their never-ending quest to find an edge:

For a fraction of the cost of a major league minimum salary, the team can benefit from cutting-edge statistical analysis, a physicist’s view of the game, or innovative psychological techniques. Richer rivals can build palatial stadiums, pay nine figures for Alex Rodriguez, or draw on the fandom of an entire region. Upgrading a terrible defense, addressing bad base running, providing counsel for talented, young players -- all of these steps have been pointed toward a more modest, but equally important and beneficial goal: wiping out weaknesses.

Ultimately, though, just as in the story of Billy Beane and the Oakland A’s in "Moneyball," what’s important about the Rays and those following a similar path in the NBA is not statistical analysis or psychological testing or any other individual method. To focus on one specific issue is to miss the forest for the trees, as it’s really about the overall approach.

“We’re constantly assessing what we’re doing,” Friedman said. “After we make decisions, we postmortem them at a later date. We keep copious notes on the variables we know, everything we knew going in. Then we go back to review the process. It’s something we’re continuing to refine and will be in perpetuity. I hope to never get to the point where we’re content, or we feel great about everything and go into autopilot mode.”

In the NBA as in any sport, it’s all about having a plan, working towards the end goal, staying open-minded, constantly learning and further developing the process. The simultaneous importance and scarcity of stars combined with the extreme difficulty of acquiring them makes the margin of error in building a contender in the NBA extremely small, and no matter how well a team executes, the odds are still stacked against them. That’s why it’s important to find any possible edge, something that can give "The Extra 2%."