Justin Wolfers on the Quality of an NBA Denial

Somebody should make a timeline of every time the NBA has ever made some kind of blanket denial, unsupported by evidence, and then follow-up to see how it turned out.

The point would be, of course, that the NBA is asking us to trust blanket denials right now -- David Stern calls Donaghy's latest claims "baseless" and the desperate acts of a convicted felon -- in the face of some of the most serious charges imaginable, from a former referee.

I am open-minded to all sides of this debate at this point. These are dueling assertions, with precious little evidence. Certainly, you wouldn't want to believe Tim Donaghy without some supporting evidence.

The same goes, I'm afraid, based on recent history, for the NBA.

My mind turns to Justin Wolfers.
"On a personal level, having been on the receiving end of a blanket denial from the NBA," expalins Wolfers, "I know as a fact that it was not well thought through. Clearly, this business, like every business, is run by PR."

Wolfers is one of the most respected names in economics. And he was also the lead author of that paper about racial bias among NBA referees that got people so worked up a year ago.

That paper prompted the NBA to say all kinds of things about Wolfers' work, including calling is sloppy and ludicrous. From an Associated Press article of May 2007:

Speaking before Friday's Game 6 of a playoff series between Toronto and New Jersey, Stern said of the report: "My major concern about it is that it's wrong."

"This is a bum rap, that's all," Stern said. "This is a bum rap, and if it is going to be laid on us it should be laid on us by basis of some people who are purported to be scholars in a publication that purports to hold us up to a higher standard -- a little bit more should have been done."

And, of course, there was a blanket denial, that was backed with grand claims that the NBA had better information proving Wolfers wrong.

Much like during this referee scandal, the NBA conducted an internal investigation, and then pronounced the matter settled in their favor without taking the step of letting the public see what the people in the league office know.

The only problem was that the NBA was evidently not working with the best facts available, and in the final analysis was almost certainly wrong all along. That notion is supported by countless economists who have vouched for Wolfers' work, and even, apparently, the NBA's own secretive internal study, which was eventually handed over to Wolfers and media outlets.

Wolfers has given academic talks about how, upon further review, the evidence supports his initial assertions, despite the NBA's protestations. He plans to publish those findings at some point.

ESPN's Lester Munson did an excellent job, at the time, detailing the situation.

Why did the NBA suddenly give Wolfers its study? "I believe they were tired of the criticism that they had not given it to us," he said. "And I don't think they really knew what their study said."
An independent analysis of the two conflicting studies requested by ESPN.com confirms Wolfers' findings that referees favor their own race when they blow their whistles. Thomas Miles, who has a Ph. D. in economics from the University of Chicago and is a graduate of Harvard Law School, dissected the massive study completed by Wolfers, and compared it with the smaller study by an NBA consultant.

"I believe [Wolfers] has the better points," said Miles, a professor at the University of Chicago Law School. "His study focused on the interactions of the race of the referee and the race of the player. The NBA was more concerned with the number of fouls called on black players and comparisons with the number of fouls called on white players."

Wolfers says that by rushing to discredit its critics, the league may have had some short-term public relations victories, at the expense of long-term credibility.

"Supreme Court Justice Louis Brandeis said sunlight is the best disinfectant." says Wolfers. "The NBA is in a crisis of confidence here, and I think sunlight is very important for future credibility of the league.

"At the time of the referee race study, other economists looked at my original study, and then the NBA's study, and said that the future credibility of the League would be shot if the League didn't acknowledge that they had erred in their initial statements.

"Now the allegations the League is facing are much more serious. But they do have data on every referee. They have in internal database that they use to grade performances on each game. It would be valuable to know if the game in question had been questionable by the NBA's own metrics. I'm thinking that a data snoop, people like myself, could be very helpful in going through the information to see if there is anything to be found.

"When I taught business ethics at Stanford, we talked about how businesses all record everything. They keep paper trails of almost everything they do. And there is always a student or two who questions that. Why not shred everything? Delete the files! The reason is because a clean paper trail is a complement to an ethical business strategy. If you're doing the right thing, then you want the longest paper trail you can possibly get."