By: Preston McClellan ('14), SportsBusinessU.com
On Jan. 30 of the current NBA season, the Memphis Grizzlies sent Rudy Gay to Toronto as part of a three-team deal that shocked many around the league. How could Memphis trade its most talented and arguably most productive player while the team was in the midst of becoming a formidable power in the Western Conference? Analytics.
For those that had been paying attention to the ownership transition going on in Memphis, the trade came as no surprise. Newly minted owner Robert Pera, a former Apple engineer that struck it big with Ubiquiti Systems, took control of the team and immediately started shaping the front office in his mold. Gone were old-school talent evaluators like Tony Barone, Jr., and Jason Levien, a former NBA agent. John Hollinger, ESPN.com’s numbers guru and godfather of the PER rating, came in as the new Director of Basketball Operations.
Since the trade, Memphis is 16-5 (.761) as of March. 20 after going 29-15 (.659) to start the season. The offensive numbers explain it: As Table 1 shows, Memphis is a more efficient team without Rudy Gay. Memphis is averaging 4.6 less shots per game while making 1.4 more shots per game. That results in a positive 4.13 percentage increase in shooting. Couple that with a nearly seven percent increase in three-point accuracy, and it is easy to see why Memphis has had success.
The analytical approach taken by Memphis is not uncommon for NBA teams. Daryl Morey, General Manager of the Houston Rockets, is widely considered to run the most analytics-based front office in basketball. Morey recently hosted “Morey’s Classroom” at the 2013 Sloan Sports Analytics Conference at MIT and leads a front office team in Houston that makes a lot of basketball and business decisions based off advanced numbers. In Morey’s world and the realm of analytics, finding the best value-based contracts on up-and-coming players is a key component of running a successful front office.
Outside of Houston, the Toronto Raptors are on the forefront of another side of the analytics movement. As outlined in Grantland’s recent piece “Lights, Camera, Revolution,” Toronto is using a new piece of software called SportVU to better plan for opponents. SportVU is a camera tracking system that 15 current NBA teams have already purchased. The cameras are installed in the teams’ arenas, and they record the X-Y coordinates of the movements of every player on the floor for the entire game. These recordings produce incredible data sets on players and teams that allow us to predict what certain players may do in certain situations or when teams are more likely to run particular sets. It is an incredible advantage for players that use it because they can better predict what the player they are guarding might do.
Behind these analytical minds are advanced data sets that take basketball statistics to another level. A lot of “old school” basketball stats such as field goal percentage, assists, blocks, etc. fail to take into account the true impact of a player while on the floor. That’s what initially led Hollinger, now the Grizzlies’ Director of Basketball Operations, to develop the PER rating for ESPN. The PER rating measures a players per-minute productivity. The formula allows us to compare players that may play a different amount of minutes, eliminating the skew or bias that traditional stats naturally present. Two important things to remember about the PER are that it is per minute and pace-adjusted.
Using this basic statistical evaluation, it is easy to see some of Rudy Gay’s shortcomings in basketball efficiency. Ranked as the 23rd-most efficient small forward in the league, Gay was earning nearly the same about of dollars as LeBron James and Kevin Durant (Nos. 1 and 2 in the PER small forward rankings). Gay was not performing anywhere close to the level of his contract. So, Memphis traded for Tayshaun Prince, who is just 10 spots lower on the small forward PER list than Gay at a fraction of the cost. In one trade, Memphis was able to dump a max contract, get under the luxury tax threshold, AND get better. The trade also freed up cap space that will allow the team to re-sign Tony Allen this offseason.
Teams across the league are realizing the value of analytics in many different areas. Aside from player evaluation, teams like the San Antonio Spurs are using data called “injury analytics” to understand how to best use aging players like Tim Duncan and Manu Ginobli. Remember earlier this NBA season when Spurs’ head coach Greg Popovich caught so much heat for resting his entire starting lineup? That was more than likely an analytics-based decision.
The question with the analytics movement is whether or not it has staying power. There is a clear divide between talent evaluators and numbers gurus. Often times, this disconnect presents itself when the coach on the floor is more concerned with the intangibles of basketball while the people in the front office are crunching numbers in order to make things work. Do coaches become more analytical or do front offices start using more qualitative information? Teams have to find a happy medium in order to be truly successful.
