Monthly Archives: February 2013

The accuracy of rumor reporting

I just read an article from Dylan Murphy at looking at the accuracy rate of NBA reporters for reporting rumors at the trade deadline. He looked at the rumors reported by Adrian Wojnarowski, Chris Broussard, Marc Spears, Marc Stein, Sam Amick and Ken Berger, comparing the number of reports to the number of deals that actually came to fruition.

The results, unsurprisingly, were dismal. Spears had the best hit ratio at 40 percent, but he also had the smallest sample size — with two of the five rumors he reported actually going down.

In fact, the hit rate was pretty much a function of the sample size — there’s a statistical function called r-squared that measures the extent to which the y values in a set of x-y data pairs are influenced by the x values. Put the number of predictions on the X axis and the hit rate on the Y axis and calculate r-squared — the result in this case is 0.96596, or close to 97 percent. This is very high indeed — a perfect correlation is 1.0 or 100 percent.

So Murphy’s article doesn’t measure how accurate the reporters are at all — it measures how many rumors they report. Continue reading

Useless trade exceptions

Eric Pincus wrote a piece for the LA Times explaining that two of the Lakers’ trade exceptions are now “functionally expired,” meaning that the trade deadline has passed and these exceptions will expire before the team is allowed to trade again.

As I describe in my FAQ, trade exceptions are the result of non-simultaneous trades. If a team trades a single player away, it has a year in which to acquire up to 100 percent plus $100,000 of the outgoing player’s salary. For example, if a team trades its $10 million player for a $5 million player, it has a year in which it can acquire another $5.1 million in salaries, which is charged to the original trade (i.e., salary matching requirements are ignored). This $5.1 million credit, which lasts a year, is commonly referred to as a trade exception.

Many trade exceptions go unused and simply expire, or are partially used and the remaining balance expires a year after the original trade. Since many trades usually occur right before the trade deadline, you always see a clustering of trade exceptions that expire right around the following season’s deadline. However, since the 2011-12 season was played under an altered schedule due to the lockout, the 2012 trade deadline fell on March 15 rather than its usual late February. This means that trade exceptions from last season’s deadline have not expired, even though they can’t be used.

Teams can start trading again once their season ends — so teams that don’t make the playoffs can start trading again on Thursday, April 18 (all 30 teams play on April 17). Playoff teams can begin trading once they are eliminated (or for the NBA champions, the day after the Finals ends).

Eric reported on the Lakers’ exceptions. Here are the exceptions for all NBA teams which are still active, but will expire on or before April 17. Continue reading

The trade deadline and the hard cap

The trade deadline is at high noon (Pacific time) today, and some teams are going to be on the outside looking in.

Not necessarily by choice – some teams have a distinct need to shake things up, or are missing a key piece for the stretch run and the playoffs. It’s by necessity. They’re hard capped. And their options are limited. Continue reading

New FAQ update

There a new FAQ update online now at In addition to adding links to this blog, there are a couple minor revisions:

  • I was unclear about the exclusion for 50% of a player’s salary lost to a league (but not team) suspension. It is removed from calculations such as escrow and luxury tax, but it doesn’t generate additional cap room the team can use to sign another player. I updated question numbers 14 and 104 to clarify.
  • In question number 21, I clarified that the team salary used for calculating the luxury tax does not include cap holds and exceptions.
  • I fixed the chart at the end of question number 25. The entry for maximum raises for the Disabled Player exception still said 4.5% — a remnant of the previous CBA. Since this exception can only be used to sign a player for one season (or acquire a player in the last season of his contract) I changed the entry to “N/A.”

The cumulative effects of the luxury tax

One of my friends in the media hit me up today for information on the all-time luxury tax standings. I whipped up a spreadsheet showing each team’s luxury tax payments in each year, and sent it off to him.

After that I started to think a little more about the topic. The spreadsheet I did for my friend just showed the amounts each team paid in every season for which there was a tax. But that tax money (well…a lot of it) is distributed back to the non-taxpaying teams. So what’s the cumulative net effect of the luxury tax — money paid netted against money received?

I got to work on the problem, and what you see here is the result. In the table below money paid by teams is in red and money received by teams is in green. Under the 2005 and 2011 agreements teams were either taxpayers or beneficiaries; however under the 1999 agreement teams could be both, and the figures you see represent their net payment or receipt. Continue reading

Can Dwight end up a Net this summer?

then-a-miracle-occurs-cartoonChris Sheridan wrote a piece for saying that Dwight Howard can leverage the Lakers into doing a sign-and-trade this summer which would result in Howard ending up a Brooklyn Net.

It’s a difficult proposition. One of the features of the new CBA is stiffer penalties for taxpaying teams — and here “taxpaying” is defined to mean more than $4 million above the tax line, a point called “the apron.” Why $4 million? Because that’s what they negotiated.

One of these penalties, starting this summer, is restricted access to sign-and-trade transactions. A team cannot receive a player in a sign-and-trade if, at the conclusion of the trade, the team is above the apron. They can still send a player away in a sign-and-trade transaction, and they can receive a player who himself is not signed-and-traded. But they can’t trade for a guy who is signed by another team if their team salary is a penny above the apron after the trade is done.

The salary cap, tax level, and apron won’t be known for sure until this July when the league concludes its annual audit. However, the league periodically provides the teams with forecasts, and teams also project their own amounts internally. Most of the teams I’ve talked to are using a figure of $71.5 million to $73 million for the tax line, which would put the apron at $75.5 million to $77 million.

So here’s Sheridan’s proposition — the Nets will be able to complete a sign-and-trade transaction for Dwight Howard, which will result, at the conclusion of the trade, in the Nets’ team salary being $77 million or less (let’s use the high end of the range, in order to be as generous as possible).

Sheridan acknowledges the difficulty, writing, “…my cap guru said it would be difficult but NOT impossible.”

Well, yeah. So’s winning the lottery. Continue reading