A Heady Process vs. Steady Progress Part II: Celtics’ and Sixers’ spending habits

If you missed Part I, I wrote about the respective situations that the Boston Celtics and Philadelphia 76ers found themselves in that led them to blow up their teams. I also detailed how the Celtics carried an expensive roster in 2014 and made a flurry of moves in 2015 to create a short term competitive team. In Part II, I’ll detail the Sixers cost-cutting strategies and the Celtics spending patterns.

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Low Costs and Second Round Picks

In 2014 the 76ers saved money by sending out Jrue Holiday’s mid-sized deal for the $6M-cheaper Nerlens Noel. The team was coming into a sizable amount of cap space after not resigning Andrew Bynum. However, Sixers General Manager Sam Hinkie did not use the cap space, instead signing a variety of players to player minimum contracts with heavy team control. This on it’s own is not bad and is usually the path forward for second round picks and undrafted players to claw their way into the league.

When a roster is capped out and ways to add talent are limited, it makes sense for a team exchange opportunity with control for the young players who might not have had the draft juice be selected in the first round. The most famous example of this for the Sixers is Robert Covington, a low-end starter on a good NBA team. Covington was undrafted in 2013, but signed with the Houston Rockets for part of his rookie year before being waived. The Sixers signed Covington to a “Hinkie special” four-year player minimum contract rife with non-guarantees and team options. Covington stuck and the Sixers got tremendous surplus value, culminating him receiving a new four-year $62 million dollar contract.

This is the opposite of what happened when the Sixers selected KJ McDaniels 32nd in the 2014 draft. McDaniels and his agent were unhappy with the “Hinkie special” deal that the Sixers had offered him. McDaniels demanded a one-year, player minimum deal that the Sixers had to honor or risk losing his draft rights. Because of this, the Sixers traded him to the Rockets for Isaiah Canaan in order to recoup their losses.

I tell you all of this to develop an understanding for how young players were getting squeezed by a Sixers organization that didn’t need to squeeze that hard.

It would be disingenuous to suggest that low compensation for second round and undrafted young players is a problem unique to the Sixers, when many teams, (including the Celtics) are guilty of this. The difference between the Sixers and other organizations is that many other teams had spent well up to the salary cap, could only offer player minimums under cap rules, and, as a result, were interested in the young players to fill out the fringes of their rotation. In the case of the 2014-2015 Sixers, these young players were the rotation. Players like Covington, Jakarr Sampson, Hollis Thompson, Jerami Grant, and TJ McConnell all logged season of 1000 minutes or more while signed to these long rookie minimum deals.

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This would be understandable if the Sixers had a bloated cap with a ton of dead money in waived players, or were suffering from an enormous amount of injuries. Instead, this was simply because the Sixers did not want to spend money on players. The team was well below the salary floor at various point from 2013 to 2017. Putting these players on long cheap contracts and handing a large responsibility of the franchise to them achieved two things. It made the Sixers bad and it made them cheap. I think the latter was more important to management than the former.

The NBA has a salary floor for teams, which they must spend up to in a given year. If they don’t, the money they did not use is distributed to the players on the team. However, because salary cap floor calculations used to be done exclusively by payroll at end of the year, the Sixers were able to use that to actually pay less the floor each of the four years of The Process. Because player contracts are prorated, when teams trade players, they are only responsible for the portion of salary in a players contract in which they were on the team. As a result, teams can make trades at the deadline for big contracts to “spend up to the floor” but in reality only end up paying about a third of that contract.

For example, in 2013-2014, the salary floor was $52.8M dollars. Philadelphia made a deadline deal to send Lavoy Allen and Evan Turner to the Indiana Pacers in exchange for a second round pick and Danny Granger’s monster deal. After buyout talks with Granger, the Sixers had added about $4.5M to their books and would end their season with their payroll at $53.7M. However, because they were only paying a percentage of Granger’s prorated deal, they were spending actual money below the rate of the salary floor. This would continue happening with the contracts for JaVale McGee and Andew Bogut.

My point here is that the Sixers’ cost cutting was viewed by many to be a smart, practical move, and it was... for the owners.

There’s a lot of hooting over the Sacremento Kings trade that Hinkie completed (a one-sided deal which gave them the ammo to get Markelle Fultz) and how that wouldn’t have been possible if Philly didn’t have cap space. That’s true, and similarly the team was able to nab the first round pick that became Furkan Korkmaz in exchange for taking on the last two years of McGee’s contract. And yet, I hardly think it’s coincidence that all of these “salary dump deals” ended up with the Sixers at or right near the salary floor for four years straight.

The case could be made that I’m veering into conspiracy territory here, and maybe the Sixers really did just happen to have their flexibility line up exactly where they could pay the least money into the players’ union and still qualify for revenue sharing and get a top draft pick. That’s a decision everyone will have to make for themselves.

Anyway, let’s take a look at how the Celtics handled player salaries.

Flexible Spending

Like Philadelphia, Boston also traversed the 2014-2016 seasons without a fully formed roster. I detailed previously how the Celtics 2013-2014 season focused on absorbing losses and creating valuations on players, and similarly, the Celtics 2014-2015 season was about reshaping the roster, trimming costs, and finding a path back to competitive basketball.

At the start of the 2015 season, Boston had some decisions to make. The previous year, the Celtics signed Avery Bradley to what was considered a large contract, above market contract at the time and had decisions to make about a roster that had made a surprise playoff appearance.

Trading away Rajon Rondo and Jeff Green while Brandon Bass’s midsize contract had expired had given the Celtics nearly $18M in cap space. The Celtics could cut costs in order to maintain flexibility, or they could spend and see what their plucky new squad could do with a full year. They did both, giving Amir Johnson and Jonas Jerebko above-market deals that were non-guaranteed for the following year. They made a big commitment to Jae Crowder, giving a player who had been only been in fringe rotation a few years ago a 5-year $35M contract. The Celtics solidified their roster by trading the bloated final year of Gerald Wallace’s contract for the more bloated contract of the playable David Lee. The Celtics were once again above the cap, but had potential expiring contracts all over the roster to provide flexibility, should the occasion arise.

The Celtics suffered a six-game defeat at the hands of the Atlanta Hawks in that postseason, and it seemed to justify what many critics had said of the Celtics—that there was little point to having a middling team, even with an emerging star like Isaiah Thomas.

However, in an offseason where the Celtics had a chance to pitch to Kevin Durant, the Celtics signed All-Star Al Horford, something that likely would not have been possible had the Celtics been a lottery or fringe playoff team. One of the greatest surplus values a team can receive is adding an All-Star caliber player via free agency. This proved true for the Celtics as they ended up the #1 seed in the (albeit weak) Eastern Conference and appeared in the Eastern conference finals the following year. The Celtics were once again able to chain that success and flexibility in similar circumstances to sign Gordon Hayward.

Now, there’s a lot of luck involved here. If the Atlanta Hawks don’t decide that Kent Bazemore and Dwight Howard are more important to their future than Al Horford or if he decides instead to sign with Washington in 2016, Boston likely looks like an entirely different team. If the new media deal that allowed for the salary cap spike had kicked in a year earlier or later, it’s also possible the Celtics might have had trouble clearing the space for Horford. Kyrie Irving asking for a trade is another stroke of luck for a Celtics team that happened to have the resources. However, Boston put themselves in a position to be lucky by spending money and winning games. If the Celtics had not signed Amir Johnson and instead had Jared Sullinger protecting the rim, I wonder where they end up? The Celtics got lucky, but the first step in having good luck is putting yourself in a position to reap the rewards.

Philadelphia themselves will actually be entering a similar situation next year, having established themselves as top Eastern Conference team and with JJ Redick’s expiring to giving them flexibility. Chances are the Sixers will be one of the top free agent destinations, much like the Celtics themselves were last year. If the Sixers are able to nab a player of a Paul George caliber, it’s likely they will also enjoy a leap from the conference’s upper middle class to the elite tier, if they haven’t already.

How teams spend money in the NBA is always going to be one of the most important aspects of team-building. The Celtics and Sixers took polar opposite approaches from 2013 to 2017 and the results were the Celtics winning two playoff series and losing three and the Sixers picking in the top three each year. One was a lot more fun to watch and hurt draft pick value and the other alienated players, eased the burden on Josh Harris’s wallet, and brought home Joel Embiid, Jahlil Okafor, and Ben Simmons.

The direct result of how the two spent their money ends up being an argument of Al Horford, Gordon Hayward, and half of Kyrie Irving versus Joel Embiid and Ben Simmons. Philly will eventually have a free agent player-to-be-named-later joining their ranks in the next two years, and I think most people would still take the young players on the rookie contracts. The Sixers were pitched on the idea that there is no point in spending money when a team is bad or average. I question the motives behind that philosophy, but it’s one that most of the NBA media seems to agree with. However the Celtics spent their way through atrocity and mediocrity alike and as a result would up with two All-Star free agents.

The point here is that both methods worked, but the Sixers tanking strategy was seen as more legitimate because it was seen as relying less on luck. Is that true? Is tanking a better path to true championship contention than the “treadmill of mediocrity”.

We’ll look at that more in Part III.