Hello all. This is going to be a long, depressing fanpost, and in the end it's going to concern why the Knicks needed to trade Iman Shumpert, and how labor relations in the United States have caused this. Darren Rovell will also cast in a positive light. If you absolutely 100% feel that Shumpert should not be traded, and don't care about why it could actually have helped the Knicks, don't bother reading this. In fact, if you don't want to get bummed out at all, please don't keep going. I mean that in the nicest way, but this is gonna be a debbie downer post.
Since the 1950s, unions in the United States have been slowly losing power to the point where some politicians in America have instituted measures to get rid of the one policy that is most important: collective bargaining. Collective bargaining is a powerful tool if used effectively. Unions, at their height, would threaten strikes to get increased wages for the jobs they feel are very important. No one wants to realize that their garbagemen are well compensated compared to them (there is a whole class argument here which I am NOT trying to get into don't worry), so politicians reduce the wages of public works employees. Employees who don't feel they are being compensated enough can then threaten a strike when its time to renew the contract stipulating wages for these employees. People say "well I don't want my garbagemen making 80k a year thats ridiculous! Anyone can do that job!" Then, said people, realize when their garbage isn't being picked up and sitting there to rot, maybe just compensation is important for these workers. Since the 1950s legislation has been introduced to limit the power of collective bargaining, which has had two effects.
1. Strikes have mostly been eliminated because workers rarely take that measure because they don't have the power necessary to pull off such pressure.
2. I can get fired from my job if my boss doesn't agree with an arbitrary part of my personality because I am not in a union. (I write for a website for a living, there is no union for that)
But what does this have to do with sports? Well, one of the last major powerful unions in America are professional sports unions (and teachers.). Unlike most other unions, since the 1970s, sports unions have used the courts, and collective bargaining to gain power for their clients. By power, I mean money. The rapid rise of player salaries caused owners plenty of trouble because they could no longer keep player salaries down with an iron first, which meant there needed to be other ways for owners to make the exorbitant amounts of money they were used to on sports. The aftermath of the 1970s were really the dawn of the second rise of professionalism in sports (the first being the shift from amateur leagues to professional leagues around the turn of the 20th century).
The overarching consequence of this is this: in the end sports are a business, no matter how we try to escape it. The nail in the coffin was the history 1981 Baden-Baden decision by the International Olympic Committee ended amateurism at the Olympic game, officially making all Olympic athlete professionals so they could make a living while training.
As a result of these movements, sports fandom has been increasingly affected by the decisions made by everything I laid out has led to three distinct categories of fandom within sports: Those who love the business aspect, those who breakdown the game through its statistics, and those who just like to watch the spectacle. Most sports fans, myself included, are combinations of all three. Darren Rovell would be an example of someone who is at the extreme of liking the business spectacle. Your casual fan who loves watching football every Sunday, but does not read deeper into the games besides what the New York Times prints in its box score would be an example of someone who enjoys the spectacle. Finally, Bill James, the founder of sabrmetrics, would be an extreme example of breaking down the game through statistics.
All three of these types of fans are important. Say what you want about Darren Rovell, but sports ARE a business, and despite the fact we don't want to be seen as a lifeless money grubber, his analyses are not wrong most times. The NBA likes to promote itself as having fans as a combination of stats lovers and spectacle enjoyers. Their recent marketing campaigns have shown how the league is very analytical, but also you know you love a good posterizing dunk when you see one. The Phoenix Suns have a GM who started in the Boston Celtics video room and is only 33 years old. The installation of SportVU cameras in all NBA arenas shows how deeply engrained analytics is in the game, and no writer will get on an NBA beat without having mastered Synergy scouting tools.
But you already know all of this. While the NBA has been distracting itself with shiny new stats toys, dress codes, and exciting play, the league was fucking its players with two lockouts and imposing very strict rules for which teams have to operate. In 1998 NBA players had the largest average salary in professional sports. They also had ineffectual leadership in Billy Hunter (who would be around through this past season before he was finally fired) and had failed at bringing suit against the NBA in 1995. Long story short, two lockouts later the players only control 51% of revenue, player salaries have been contained despite starting to grow after the 2005 CBA, and revenue is much more directed at small market teams, severely punishing teams who go over the Luxury Tax. The NBA has never been able to institute a hard salary cap (only the NHL accomplished this of the four major professional sports leagues, and to do that they cancelled an entire season and lost the trust of most of the general public).
[it is at this point I learn Iman Shumpert has not been traded. I will go forth with my original point]
Thus in order to win in today's NBA you either need to work within a very constrained set of rules, or have LeBron James. The Miami Heat have done the latter giving them back to back championships, while the Dallas Mavericks had to immediately blow up their team (hey look Tyson Chandler is now a knick!) as a result of the CBA. We have not seen another
The Knicks used to spend a lot of money on the luxury tax, which was fine under the 2005 CBA. We saw how the new rules have done to the Knicks when they let go of Jeremy Lin. James Dolan, who is the CEO of a large corporation (no matter how evil Cablevision is, James Dolan is still CEO) so he has to have some business acumen, despite what you want to believe. He also wants to see a championship franchise in New York sooner rather than later. Now as someone who appreciates how the Indiana Pacers built their most recent squad, this is a bit troubling. Personally, I feel that teams should work within the CBA framework to acquire young, cheap talent, and then when that talent is developed adding complementary pieces to put yourself in championship contention. It worked in San Antonio (the cornerstones of their franchise since the late 80s have been David Robinson and Tim Duncan, both acquired in the draft). The problem with this philosophy is its risky. You can suck for years and the talent may never pan out (see the Cleveland Cavaliers of today's NBA) or you may luck out with franchise saviors in drafts. Big market teams do not usually go this route, because they can afford to lure free agents, or lure superstars through trades and they can build franchises through them. Los Angeles (the Lakers) have proven they are successful in this route (Kareem Abdul-Jabar, Wilt Chaimberlin, and Kobe Bryant were all acquired in trades).
Bill Simmons wrote a fantastic column in the aftermath of the Carmelo Anthony trade (pre-2011 lockout alert) on why you always trade 4 quarters for a dollar in the NBA. The Knicks looked to get a superstar for spare parts, despite some of the complementary parts being pretty good.
Then the 2011 lockout happened
After the lockout, teams now face the challenge of having to get a return on investment, or pay out of their ass considerable amounts of money that small market teams will benefit from because of the luxury tax rule. Thus every contract becomes much more important because of the percentage of the salary cap it takes up. Teams will no longer be able to afford 3 max contracts, unless a Russian Billionaire would be willing to pay $17 million dollars extra just so you could add a complementary player with limited talent like Jordan Hill. It also shows that championship cycles have limited shelf life unless your assets are managed properly.
The 2012-13 Knicks are a prime example of that. That team will represent the peak that the Knicks championship cycle the Amare' Stoudamire signing started. The Knicks leveraged potential future assets for proven commodities to surround a core of Tyson Chandler, Carmelo Anthony, and Amare' Stoudamire with as much help as possible to compete for a title. The Knicks gave their mini-mid exception to Jason Kidd, signed a ton of veteran minimum contracts, then gambled with an unknown in Chris Chopeland. All of the signings paid off. The Knicks did as much as they could to keep as many of those assets for as long as possible. Then Kurt Thomas, Jason Kidd, Rasheed Wallace, Chris Copeland, James White, and Earl Barron left. Looking at the roster Steve Novak and Marcus Camby (who had 2 years left on his deal and barely played) were deadweight, so they were shipped off in a panic move for Andrea Bargnani. The Knicks also don't have a bi-annual exception because they are always in the luxury tax. With or without Bargnani the Knicks have zero flexibility and very limited room to bring in necessary assets to complement the departures. This was the year that everything had to go 100% right again in order to capitalize on the inflexible foundation that was laid on this team.
Before everything went wrong, the Knicks brought in Steve Mills to replace Glen Grunwald is GM. Mills represents the business side of basketball executive operations and is known for his rolodex and networking prowess. The Knicks took a look at their payroll and realized that it was possible to maybe repeat the success of 2012-13, but flexibility will no longer come back to the Knicks until the summer of 2015. This is important.
With the Knicks sitting at 21-33 its becoming apparently this is a lost season. In economic terms its what is known as a sunk cost because we cannot go back and reverse the moves that were made this offseason or at the end of 2012-13. The Knicks can't undo giving up assets for Carmelo Anthony, Tyson Chandler, Marcus Camby, or most importantly Raymond Felton. Raymond Felton at this stage in his career is a below average point guard. Raymond Felton is also signed for 2 more years after this season. For arguments sake the last year is a player option. Player options are usually not exercised unless the player doesn't think he will get more money if he opts out. Raymond Felton will be 32 then and have been declining since 2010-11. A player that caliber will usually demand veterans minimum contracts, which are considerably lower than the 3.9 million dollars that Raymond Felton would make that year. The Knicks have no control over this, and Raymond Felton will probably take the money and stay with the Organization he loves. At the time of this contract, Raymond Felton was acquired in a sign-and-trade. According to reports, not many teams were dying to get Raymond Felton at the time, and the Knicks kinda gave up a lot of assets that could have been used in different trades to match salaries.
Four million dollars for a non-bird rights, non-max, non-team controlled player is a lot.
There is where all the ramblings about labor relations and sports being a business are important. Contracts in the NBA are pigeon holed into different types of contracts in the soft salary cap to keep player salaries regulated and more importantly down. Assets are ranked based on how they fit into these different types of structures. For example signing Jason Kidd to the mini-mid level exception for the same amount of money (slightly less) than Raymond Felton was great because it fit this contract stratification and because even if a team is over the luxury tax threshold they can sign a productive player for 3 million a season despite what their overall payroll is. Raymond Felton did not qualify for any exceptions because he was sign-and-traded. Here is the collective bargaining agreement if you want to look at all the exceptions in the NBA salary cap. Hint: there are a ton.
Thus Raymond Felton's contract is onerous to the Knicks in 2015-16 as it is 4 million towards the salary cap. If the Knicks sign Carmelo Anthony to a 5 year 129 million dollar contract, its going to cost roughly around 24.3 million on the Knicks Salary Cap. Without Raymond Felton and Iman Shumpert's qualifying offer, the Knicks will have 9.4 million on the books for 3 players. So that is 35.7 million for four players. Two of those three players are valuable assets (Prigioni and Tim Hardaway Jr.) while the other is JR Smith, who may or may not opt out of his deal (player opt out in 2015). That means the Knicks have roughly 28 million dollars to toy around with in Cap space. That will get a max-free agent and then room to get a 10-12 million dollar player before heading into the luxury tax zone. The Knicks can then acquire more pieces and go over the luxury threshold (Dolan has paid it before) and only have 6-8 spots to deal with on the roster. Teams can go up to $19.99 million over the salary cap, but that will cost teams $3.25 for each dollar over it meaning Dolan would have to pay $65 million in taxes if the Knicks want to do that. The Knicks will have a draft pick in 2015 that also will be a team controlled asset. So in essence we have 10 million dollars, before we have to pay insane taxes, for 4 contracts before using our exceptions. We can sign one or two minimum contracts, and acquire some bargain deals to fill out the roster. The Knicks could in theory field a great team in 2015 and only spend $9.99 million into the luxury tax threshold because more and more good players are taking the mini-mid level exception because teams cannot afford to sign them due to salary cap constraints (teams MUST spend 85% of the cap, this is up from 75% in the 2005 CBA). The Knicks before sign and trades must be 4 million under the tax threshold, which they easily can do, otherwise they can not perform sign-and-trades (which is why we can't do it this year. The Knicks are 17 million over the tax threshold).
The 85% rule means that teams don't have the room to just "add" bad contracts before heading into the luxury tax threshold. Nobody wants to pay luxury tax because the Knicks want only a second rounder for Raymond Felton. Essentially because of the 2600 words I typed before this Raymond Felton's contract is untradeable...unless we package an asset with him. Trading for Iman Shumpert, a young wing, gives teams a cheap asset under team control for the considerable time being. He is under contract next year, and then he only has a 3.5 million qualifying offer before he becomes a restricted free agent. If a team does not accept the QO he becomes an unrestricted free agent and will get paid because he is young and has potential and that's what happens in today's NBA. Young players, and established superstars, are the only ones who have the potential to make lots of money.
When Shumpert becomes a restricted free agent he can sign up to a 4 year deal, with strict rules on salaries (the poison pill provision has been toned down since the Omer Asik and Jeremy Lin debacles), meaning he is cost controlled up to the 2020 offseason when he can finally become a free agent. That is a valuable asset to many teams. We can debate for hours on Shumps merit (I don't think he's that good, but for once it does not matter in my argument), but he is the Knicks only really good cheap asset outside of Tim Hardaway Jr. The Knicks want to keep Hardaway's rookie contract, so Shump is really the only asset we can use to get rid of Raymond Felton. If the Knicks want to stick to their philosophy of building through free agency (again, it can work especially for big markets) they needed to have traded Shump and Felton for shorter contracts regardless of who the players were. That would allow the Knicks to realize they aren't going to compete next year, and to slog through hoping Carmelo Anthony understands that a 25 win ball club in 2014-15 has nothing to do with the new championship cycle in 2015-16. The Knicks would actually walk away with (hopefully) another decent cost-controlled asset with a top 10 pick, and an open roster to retool through sign and trades and free agency with very good players.
Businesses operate in cycles. The sign of a good business is when they realize that what is happening right now isn't working, and preparing to remedy those mistakes in the next cycle. The Knicks actually, in my humble opinion, had the opportunity to prepare themselves for another run at a championship. They just had to sacrifice next year and tank it. It's really fucking depressing the NBA did this and created such a complicated beast just to control player salaries, but the man always wins, and in the end sports are always a business. Too bad none of it came to pass. Hopefully running the club like a business is the best thing to happen to us given the complexities of today's NBA. Maybe it will work, maybe it won't. Man, remember when sports were just fun?