The clammy desk jockey on the TV is describing a disaster: the worst single-day point drop in the stock market's history. As he watches, Rockets general manager Daryl Morey shakes his head and says dryly, "Sounds like a buy-low opportunity."
Spoken like a man who recently invested in some discounted Ron Artest. The 36-year-old MIT MBA often sees opportunity where others see alarm. Conventional wisdom says Artest is toxic. Morey has the numbers to show that the talented head case can reinforce an already vicious defense (Houston was second in efficiency in 2007-08) while boosting a middle-of-the-pack offense. And that makes him worth the risk.
Several teams, including the Nets, Nuggets and Cavaliers, consult a statistical analyst on personnel decisions, but the Rockets are the first to have built a division of numberjacks, and Morey is the league's first GM who is committed to the new science. His group's research is geared toward not only draft night and player acquisitions but also on-court combinations and coaching strategies.
Morey grew up reading Bill James' Baseball Abstract and later worked for the stats guru, but his geekier tendencies might actually have more to do with his boyhood love of comic book antiheroes who cut against the grain, figures like Frank Miller's Dark Knight. "In a league in which 30 teams are competing for one prize, you have to differentiate yourself somehow," Morey says. "We chose analytics."
That choice stems from the understanding that a traditional box score reveals only a fraction of what happens in a given game and that the information therein is often misleading. "Your eye is drawn to dramatic events, to scoring and getting scored on," says David Berri, an economics professor at Southern Utah and the lead author of The Wages of Wins: Taking Measure of the Many Myths in Modern Sport. "So it looks like the scorers are the best players."
Real fans know that's not necessarily the case. Quantitative analysts can prove it. They treat a basketball game as a fluid event in which pace of play, lineup combinations and interactions among players all contribute to how points are scored and prevented. "On a typical scoring play, you can divvy up the credit much more precisely than we've done in the past," says Dan Rosenbaum, a part-time adviser to the Cavaliers who is also a senior economist in the White House Office of Management and Budget. "You need to account for the guy who set the pick, the guy who made the pass, the guy who set up in the corner to spread the floor, the guy who cleared space by moving down the lane—and that's just the offense."
Morey grabs some scrap paper from his office table and begins to diagram a halfcourt. He plots an x, representing point guard Rafer Alston, outside the top of the key, then draws an arrow to a spot deep in the lane. From the arrow's tip, he draws three or four sharp lines in a burst of directions. One is a shot, another a pass under the basket, another a kickout. "We want to measure something closer to a whole play, the true impact of an action like getting to the paint," he says. Stabbing the arrow tip with his pen, he asks, "What happens here?" The possibilities fly. How often does Alston shoot, and what is the result? What about passing? Drawing fouls? Turnovers? And how does the formula change if that x is Tracy McGrady?
"Imagine what you'd want to know if you could," Morey says, leaning back from the table. "That's what we're working on."
In 2005-06, the Rockets won just 34 games. This season, many expect them to contend for the championship. Morey's ascent hews to that abrupt trajectory. He spent three years running numbers as senior VP of operations and information under Danny Ainge in Boston before the Rockets hired him to be their assistant GM, in 2006. By May 2007, he had the corner office. "I was a complete unknown when I started here," he says with a laugh. "Now I'm just a relative unknown."
If at times Morey sounds as if he is protecting a secret, it's because he is. His group closely guards its complex methods in an attempt to maintain an advantage in what Roland Beech, founder of the website 82games.com, calls "a young field with a wide range of what people are trying to understand." But you can reverse-engineer some of what the Rockets' quantitative analysis reveals by studying their roster. Morey inherited T-Mac and Yao Ming; his priority has been to surround them with championship-level support. The current crew includes several guys whom their boss affectionately calls "basketball players": Shane Battier, Carl Landry, Chuck Hayes. Back when he was assistant GM, Morey helped to direct the draft day deal that sent Stromile Swift and the rights to Rudy Gay to the Grizzlies for Battier because Morey's numbers showed that when the fundamentally sound forward is on the court, his team is better at scoring, rebounding, shooting, limiting fouls and stopping opponents from scoring.
"Everyone wants Kevin Garnett—he's got the perfect height, body, mentality—but most times, you're going to have to do with less," Morey says. "Behind Yao and Tracy, we've been willing to give up an inch of height, let's say, for more skill, a person who plays harder and creates for others, who defends and rebounds well." Morey's "basketball players" don't pop off a stat sheet, but they give coach Rick Adelman interchangeable and versatile parts that are capable of creating offensive and defensive advantages. "Chuck can guard anyone from 1 to 5; Shane can play 2, 3 or 4; Luis Scola can play 3, 4 or 5; and Brent Barry can go 1, 2 or 3," Morey says. "We're limited only by our strategic insight."
There's a framed sheet of uncut ABA basketball cards leaning against Morey's office wall, a tangible reminder that before he was an analyst, he was a fan. He chats casually about one wild uniform, then an even wilder hairdo. While Morey's playing career peaked in high school and much of his view comes through a statistical prism, he has an intuitive feel for the game. "Daryl loves basketball," says Battier. "That's what comes across when you talk to him. He wants to talk about the game, about what we're doing on the floor."
Statistical analysis has instigated a culture war in baseball, with math whizzes positioning themselves against the status quo, hell-bent on puncturing long-held theories. But the hoops version of Moneyball is far more complementary. In fact, the analytics of the NBA often reinforce old-school concepts such as the "glue guy." The Battiers of the hoops world can be praised for more than their intangibles. In fact, their value can be concretely expressed. And that value often argues for a share-the-ball game that Norman Dale would adore. "Often, what Daryl presents us supports things we already feel are working or could work," says Adelman.
As Morey himself stresses constantly, his metrics are a tool—rather than the tool—for evaluation, one of many he and his coaches use. He is no robot churning out streams of data, nor is he a slave to his numbers. "There is more than one way to win, more than one way to see things," he says. "Through analysis, we're trying to give ourselves one more way to answer questions. But we combine those answers with what our coaches, players and scouts tell us."
Now is as good a time as any in Houston to put those answers to work. The injury-plagued Yao has gone three straight years without playing 60 games. Despite McGrady's being only 29 years old, his back, knee, and shoulder ailments make him feel much older. Last season, the Rockets won 22 straight games from late January through mid-March and still couldn't get out of the first round. With Artest stepping in to round out a Celtics-esque big three, these are critical days for the great analytics experiment. And Morey knows it. "Don't think we've hung the moon," he cautions. "There's a lot of work to be done. We haven't won anything yet."
Of course, even the best-computed plans can go awry; sports is inherently unpredictable. Injuries, unforeseen improvement by opponents (see last season's Hornets), a game-changing trade (Pau Gasol, anyone?) a blown call or pure luck can separate genius from duncehood. Still, a Houston championship is no reach, so if the team falls short again, someone—or something—will have to be held accountable.
Then again, should the Rockets succeed, it would be a watershed moment for analytics. In a copycat league, other teams would surely follow Morey's winning model. "The commitment Houston has made makes them a test case," says Ken Catanella, the Nets' coordinator of statistical analysis. "How well they do could say a lot about how this field develops."
Biting into a Caprese at a lunch joint across the street from the Toyota Center, Morey shrugs off the suggestion that he is a standard-bearer. But he does feels the gravity of the moment. "There's a palpable sense … ," he says, then waits a beat, trying not to get too far in front of his skis. "We feel like we're working on something unique and hopefully special. Time will tell if that's the case."
Time and the moods of Ron Artest. No numbers can project if the much-traveled star will keep his cool or stay on task or be content to play third banana. That data can be collected only fresh each day. Morey knows he's given up potential (Donté Greene and a 2009 first-rounder) and taken on a potential headache. He also knows it's the kind of chance he has to take. "A Wall Street fund manager needs to stay ahead of the S&P, and he has about a 50% chance of doing that," he says. "As an NBA franchise, you're trying to be the one team that wins. To do that you have to be more risk-seeking."
Morey is confident that he's made as educated a bet as is possible. He has a good feeling about how Artest will take to Adelman, his former coach in Sacramento, and about the way he'll mesh with McGrady, Yao and the other "basketball players." The GM absolutely thinks this is the right call at the right time.
In the end, part of this moment goes beyond numbers. It's also about a leap of faith. Morey is good with that, too. "We have to keep pushing the envelope," he says.
"There is an opportunity here."