How Sam Hinkie Makes the NBA Money

As has been amply written about, the 2014 NBA offseason has proceeded among fans at a speed not seen previously. The offseason has always embodied speculation and hope, but never has it felt as central to the NBA fan experience as it does today. Once upon a time fans wanted to know who was signed. Then who was being neogiated with. Then who was considered. Then what the backup plan was. Once upon a time fans wanted updates once a day. Then in the morning and at night. Then during every episode of SportsCenter. Now they want an update every minute.

The traditional understanding is that the quality of the product on the field, and how it is presented, is what drives sports popularity. If a league can attract and develop better and more interesting players—or can find innovative and improved ways for fans to watch—they will be more successful. But as this offseason helped make apparent, the potential exists for offcourt intrigue to indirectly drive league revenue. By generating more pageviews and clicks, and engaging fans for longer, offseason drama is a profitable endeavor.

And if that’s the case, couldn’t tanking be a net positive for the league?

Despite the league’s official stance, its unofficial stance is “of course tanking exists, you dolts”, which is why there is increased chatter around potential changes to the lottery. Tanking comes in the blatant multi-year tanking form (76ers), intentionally losing to hold onto a draft pick (2011-12 Warriors), or taking your sweet ass time to rebuild form (Jazz). The monetary argument against tanking is that a tanking team is terrible to watch, which will lead fans to stop watching and going to games involving that team.

Wins and losses are the biggest predictor of NBA attendance, as well as the biggest predictor of television ratings, along with market size. It also stands to reason that a competitive losing team is more attractive than a noncompetitive losing team; one of the biggest factors in the NFL’s success over the past decade is its extreme amount of parity. Thirteen teams have made the Super Bowl in the last decade, while only nine NBA teams have made it to the NBA Finals. It would be better for the NBA’s bottom line for every team to at least be somewhat competitive, and with this view in mind, tanking hurts revenue.

But if we take a more expansive view of what drives revenue, things are a bit murkier. I would contend that Sam Hinkie’s 76ers generate outsize interest for how bad they are. By my reading of basketball media, the 76ers are talked about more than the middling but still bad Magic, Celtics, Pistons, Jazz and Kings, and maybe more. Everything they do is talked about more because of clear-eyed and rigid strategy the team pursues.

The 76ers also serve to increase the amount of activity that goes on in the NBA transaction market. If every team pursues the same strategy, the homogeneity of opinions and values makes deals less likely to occur. But with the 76ers willing to make every single deal a threesome if they can acquire picks, young players and money, as well as simply valuing players differently than the rest of the league, they gin up the trade and free agency market.

Of course this benefit isn’t really measurable. We could count social media mentions of the team or something dumb like that, but any conventional measure of revenue would conclude that tanking is bad for attendance and television numbers, as well as for the perception of the league. That is all probably true. But to the extent that the draft, free agency and trades drum up fan interest and knock over the first domino that eventually leads to revenue, the 76ers play a large role. Tanking plays a large role.

About Kevin Draper

Kevin “Franklin Mieuli” Draper was born and raised in Oakland, California, and loves it more than you can possibly imagine. Follow him on Twitter @kevinmdraper
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One Response to How Sam Hinkie Makes the NBA Money

  1. Andrew says:

    The tanking is a bit of “perception is reality” fallacy, in that people think its a great strategy and it drives up the perception that it works. Thus making the league want to adjust it the odds. Unless a team can predict with significant proficiency about draft picks (even then you might as well compete and game the market that way because you adequately assess the value at each pick), then “trying” is optimal. We agree but just wanted to point out that interest in the draft is silly. Free agency and training camp should be covered more like the NFL, not that I would care but the NFL is the king of off season interest. So taking a page from their book wouldn’t be a bad idea.

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