How Bad are AKME?

[kodo]

I can't judge based purely on record, with .500 being a C or .250 being a F. In Seattle the first season was Kevin Durant was 20 wins, the next season was 23 wins. That wasn't an F front office, and the fans didn't think the team was garbage. Likewise, I can't call the 41-41 Pistons led by Reggie Jackson and post-injury Blake Griffin a C even though they got 41 wins. That team was headed nowhere clearly, and they made the right choice to blow it up.

I'm still sticking w/ D, but F if we commit to 3 more years of Demar/Vuc.

[chefo]

I can write a novel, and have before, and was one of the original machinists of the 'AKME are t'rbl' train, but the best comparison is that they're the VDN of front offices. Brought the 'play book', sold ownership on how awesome they are... but they are just out of their depth. And it shows.

[chicago paxsons]

I gave them a c cuz c- wasn't an option, but after doing nothing this trade deadline i'm changing my vote to d. If akme's plan is to resign derozan and just run it back again then my vote is official an f.

[NecessaryEvil]

AK is getting THRASHED by the Bulls fanbase on Twitter.

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[dougthonus]

No, the right view to look at is "Cash". That's the actual payroll that teams are paying out, which includes dead money. So the Mavs, for example, are only at $162M (less than the Bulls) for the luxury tax calculation. But their actual payroll is $164M (more than the Bulls). And when you factor in the insurance, the Bulls are actually only paying out $147M.

I don't think that's the right way to look at it.

I'm going to guess the constraint of management is:
You cannot exceed the tax until you are top 8 team (or something like that).

Is that a reasonable or unreasonable constraint?

It's a reasonable constraint that is in place for probably every team in the league without significant extenuating circumstances. A quick look around the league since the crazy tax heights went into affect will show that's how everyone is operating (generally speaking).

If you want to discuss cash outlays, be my guest, but do you think that's the constraint placed on the team or do you think the constraint is some variant of what I just said? When discussing whether or not AKME has unreasonable constraints or not that are holding him back, defining the actual constraint is important.

[RSP83]

I think this presser is the finale reveal of what is AK.

I didn't believe he was that clueless. Apparently he is that clueless about running this franchise. He thinks and operates like a small town rec league team manager.

[MrSparkle]

Feels like he went full steam with the Titanic, hit the glacier, and is now completely flabbergasted as to what to do.

[MikeDC]

No, the right view to look at is "Cash". That's the actual payroll that teams are paying out, which includes dead money. So the Mavs, for example, are only at $162M (less than the Bulls) for the luxury tax calculation. But their actual payroll is $164M (more than the Bulls). And when you factor in the insurance, the Bulls are actually only paying out $147M.

I don't think that's the right way to look at it.

I'm going to guess the constraint of management is:
You cannot exceed the tax until you are top 8 team (or something like that).

Is that a reasonable or unreasonable constraint?

That's a reasonable constraint, but it's very unreasonable to say that constraint is the beginning and end of the discussion. No business operates that way. Definitely not the NBA. That's why the majority of trades are financial moves that don't have much on-court impact. If you listen to NBA people talk, and even guys who were former GMs like Hollinger, they all point this out.

But really, it's something everyone who's involved with any kind of business understands.

but do you think that's the constraint placed on the team or do you think the constraint is some variant of what I just said?

I think talking about constraints is irrelevant to the point I'm making, which is why I didn't bring it up.

When discussing whether or not AKME has unreasonable constraints or not that are holding him back, defining the actual constraint is important.

I didn't even bring up the luxury tax or dispute the reasonability of any "constraints". That's all stuff you're bringing up that's totally beside the point.

My point is, even if you take your constraints as a given, the Bulls are very much not actually spending up to them. You are saying, if I understand you correctly, that the ONLY thing Reinsdorf says is, "Hey, if you spend more than $165,294,000 (the luxury tax threshold), I'm going to fire you. Otherwise, you have a blank check".

I am pointing out that the Bulls actual payroll is around $147M. And Jerry Reinsdorf would strongly prefer to only pay $147M to get the same thing that he might otherwise pay $165M for.

Is that a "constraint"? Maybe? But it's kind of irrelevant, because whether it's a "hard" constraint or not, it's an obvious preference.

Is it an ownership preference to make as much money as possible? Absolutely! I don't even think it's an unreasonable preference. No owner is indifferent right up to the point of any absolute constraint they lay down. That's a ridiculous assumption.

Constraints just aren't the right way to think about it. If the Bulls actually were good and really had a chance to contend, then would the luxury tax still be a constraint? Maybe, maybe not. But that means it's not actually a constraint at all. It's a matter of preference and negotiation. But again, I'm not arguing for or against that. I'm just saying that there's a simpler, more realistic way of looking at things. Reinsdorf wants to maximize profit.

If AKME can deliver $200M in revenue based on a $147M payroll, that is going to get him more credit than delivering $200M in revenue based on a $163M payroll. That $16M in avoided payroll is, by itself, probably bigger than the revenue from a couple of play-off games.

To Jerry Reinsdorf, CPA, that's an acceptable outcome. You might be right that Reinsdorf would have been willing to accept the $37M profit scenario. But given the choice, he and every other owner in the NBA will be happy take the $53M option if it's on the table and they'll appreciate the GM who makes it happen.

That's just common sense. Of course, AKME might not make it happen. If his low payroll team flops, revenues will go down eventually. It's a classic bad-management strategy to "cut costs" at the expense of the long run health of an enterprise by hollowing out it's development pipeline. That's pretty much exactly what AKME has done.

[Dominator83]

AK is getting THRASHED by the Bulls fanbase on Twitter.

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We're reaching pre-Thibs Knicks level of comedy fast

[kyrv]

I can write a novel, and have before, and was one of the original machinists of the 'AKME are t'rbl' train, but the best comparison is that they're the VDN of front offices. Brought the 'play book', sold ownership on how awesome they are... but they are just out of their depth. And it shows.

Most comparisons I see on the Internet are bad, I feel this one is pretty apt. Very slick but they are as you said, out over their skies. Maybe learning at our expense will make them better in the future

[Peelboy]

How bad via letter grade is hard. But I’m pretty sure one grade is “worse than Garpax.”

At least garpax knew talent and tried to audible/adjust to obvious circumstances. These clowns know organizational harmony, but apparently little about scouting/development and don’t know the meaning of the word ‘adjust.’

I miss GarPax. That’s how bad they are.

[TheJordanRule]

D+… they don’t make trades. Three years of essentially standing pat at trade deadlines and doubling down on a failing roster. The reason I can’t give them an F is because that Lonzo plan was lit until he got hurt. But why would you ever hold onto the Big Three after last year? It became an exponentially more leaky plan with each year. Please tell me that AKME are not planning on holding onto all of them again unless they get an offer for Zach that blows them outta the water.

[GoBlue72391]

I wish I was allowed to change my vote. After today I would change it from a D to an F.

[dougthonus]

That's a reasonable constraint, but it's very unreasonable to say that constraint is the beginning and end of the discussion. No business operates that way. Definitely not the NBA. That's why the majority of trades are financial moves that don't have much on-court impact. If you listen to NBA people talk, and even guys who were former GMs like Hollinger, they all point this out.

I think it's totally a reasonable constraint as it is the actions of all of their peers, and it is largely the beginning and end of the discussion for all their peers when in the same context.

Sure, teams make financial moves and many of them are due to this constraint and following it and none violate it.

But really, it's something everyone who's involved with any kind of business understands.

Yes, and anyone involved in business would understand the points I made above. No one in business makes massively expensive moves that don't have an impact. That's really what we're saying here. The complaint is often that Reinsdorf runs the team like a business instead of a fan.

think talking about constraints is irrelevant to the point I'm making, which is why I didn't bring it up.

You replied to my point. So I was clarifying what it was. If you don't want to talk about it, feel free to not reply. I don't care about the Bulls cash outlay unless we're talking about its impact on building a team, in which case my point is more specific and relevant to team building than yours is.

I didn't even bring up the luxury tax or dispute the reasonability of any "constraints". That's all stuff you're bringing up that's totally beside the point.

You engaged with me on my point, not the other way around, so again, I don't care about your point, because it's without any basketball merit or limitations that AKME has.

Do you think if Lonzo's money wasn't covered by insurance that the Bulls would have behaved any differently? Of course you don't.

My point is, even if you take your constraints as a given, the Bulls are very much not actually spending up to them. You are saying, if I understand you correctly, that the ONLY thing Reinsdorf says is, "Hey, if you spend more than $165,294,000 (the luxury tax threshold), I'm going to fire you. Otherwise, you have a blank check".

I am pointing out that the Bulls actual payroll is around $147M. And Jerry Reinsdorf would strongly prefer to only pay $147M to get the same thing that he might otherwise pay $165M for.

The constraint isn't about cash flow. The constraint is the luxury tax. You cannot exceed the tax without achieving at least <insert loftier goal that you know we aren't even close to meeting here>. I think I've stated that pretty clearly. It's also the way all the other teams look at it.

Is that a "constraint"? Maybe? But it's kind of irrelevant, because whether it's a "hard" constraint or not, it's an obvious preference.

It is the preference held by every one of the Bulls peers in their business, but I agree, it's a preference. It is not a preference that meaningfully stops them from success as it is also a preference acted on by everyone else.

Is it an ownership preference to make as much money as possible? Absolutely! I don't even think it's an unreasonable preference. No owner is indifferent right up to the point of any absolute constraint they lay down. That's a ridiculous assumption.

Constraints just aren't the right way to think about it. If the Bulls actually were good and really had a chance to contend, then would the luxury tax still be a constraint? Maybe, maybe not. But that means it's not actually a constraint at all. It's a matter of preference and negotiation. But again, I'm not arguing for or against that. I'm just saying that there's a simpler, more realistic way of looking at things. Reinsdorf wants to maximize profit.

If AKME can deliver $200M in revenue based on a $147M payroll, that is going to get him more credit than delivering $200M in revenue based on a $163M payroll. That $16M in avoided payroll is, by itself, probably bigger than the revenue from a couple of play-off games.

To Jerry Reinsdorf, CPA, that's an acceptable outcome. You might be right that Reinsdorf would have been willing to accept the $37M profit scenario. But given the choice, he and every other owner in the NBA will be happy take the $53M option if it's on the table and they'll appreciate the GM who makes it happen.

That's just common sense. Of course, AKME might not make it happen. If his low payroll team flops, revenues will go down eventually. It's a classic bad-management strategy to "cut costs" at the expense of the long run health of an enterprise by hollowing out it's development pipeline. That's pretty much exactly what AKME has done.

I agree that Reinsdorf would rather have more money then less. Of course.

He is not enforcing that in a way that prevents his management from building a top 8 team. The constraints he places on his people in regards to cost in pursuit of profits in this instance are the same constraints that exist for all of his peers and are not unreasonable.

To clarify, I have _very_ significant doubts about the willingness to spend tax money like the top 5 teams in the league right now whom are all legit contenders, but those teams made those payrolls after they had the pieces not before. When we get to that point, I may have very pointed criticisms about our lack of willingness to spend.

I've just said that isn't today's problem. From a cap perspective, we're 10th in resource allocation and 19th in the standings. Factor in the roster age, future assets, and current talent pool (and where it was sourced), and the problem is pretty clearly incompetence by our front office.

If I wanted to complain about ownership, my complaint would not be at creating a hard cap at the tax when you have no shot in hell of winning a playoff series, it would be not firing these guys last year (and likely not firing them this year either).

[chefo]

The Bulls bring in darn near $400M of revenue. It's like managing the Coca Cola brand. A trained monkey can do it. You have to really screw it up to make ownership pay attention. Remember GarPax did not get in trouble until the bottom line started suffering.

AKME are not there yet. As we've discussed, it will get much worse once re-signed DD and Vuc start eating $50M per for less efficient production, to go with older and more oft injured Zach. That's your 'core' the next 3 years, whether us fans like it or not.

That's also $100M of payroll a year. Doesn't leave much to work with. If they don't re-sign DD, I'd reserve the right to change my mind, but given how deeply they've committed to running it back, looks like it's just a matter of getting close on the $.

Old guys don't get better with age. Most fall off a cliff. Having highly paid old guys is about as close to NBA purgatory as it gets.

[MikeDC]

You engaged with me on my point, not the other way around, so again, I don't care about your point, because it's without any basketball merit or limitations that AKME has.

Well, that's jerkish of you. You had a factual inaccuracy in your post. A point that's obvious but is still not clicking with you. I was trying to point it out in a non-confrontational way that furthered a useful discussion. You're seeking confrontation.

From a cap perspective, we're 10th in resource allocation and 19th in the standings.

The factual inaccuracy is that the "cap perspective" is not "resource allocation".

They're actually 23rd in resource allocation. Resources being what they are paying to field a team. Their actual payroll is the actual amount of resources they are spending. The "cap perspective" is an accounting fiction that includes $16M that's being paid by a third party.

Literally, the are Bulls paying $147M to field a team and some insurance company paying $16M to Lonzo Ball.

To say the Bulls are allocating $163M to the players is factually incorrect. In fact, they are only allocating $147M to the players. Which is significantly less than most teams.

Which gets back to the point. There are lots of valid criticisms of AKME, but this particular one is not.

They knew going into this year (and should have known last year) that Lonzo wouldn't play a minute for them, but the cost of his contract would mostly be covered by insurance. Rather than try to trade him, AKME said, "Hey, I'll give you a playoff team on a rebuilding team budget" and Reinsdorf said "cool".

---------
Going to make this clear.
You say the salary cap says the Bulls are 10th in resource allocation, at $163M. Team 11 was the TWolves at $162.9M according to BBRef.

How much are the TWolves spending to put a team on the court this year? $162.9M.
How much are the Bulls spending to put a team on the court this year? $147M.

I don't know how to be any more clear than that. Your number is incorrect.

[dougthonus]

The factual inaccuracy is that the "cap perspective" is not "resource allocation".

They're actually 23rd in resource allocation. Resources being what they are paying to field a team. Their actual payroll is the actual amount of resources they are spending. The "cap perspective" is an accounting fiction that includes $16M that's being paid by a third party.

Literally, the are Bulls paying $147M to field a team and some insurance company paying $16M to Lonzo Ball.

To say the Bulls are allocating $163M to the players is factually incorrect. In fact, they are only allocating $147M to the players. Which is significantly less than most teams.

Which gets back to the point. There are lots of valid criticisms of AKME, but this particular one is not.

They knew going into this year (and should have known last year) that Lonzo wouldn't play a minute for them, but the cost of his contract would mostly be covered by insurance. Rather than try to trade him, AKME said, "Hey, I'll give you a playoff team on a rebuilding team budget" and Reinsdorf said "cool".

---------
Going to make this clear.
You say the salary cap says the Bulls are 10th in resource allocation, at $163M. Team 11 was the TWolves at $162.9M according to BBRef.

How much are the TWolves spending to put a team on the court this year? $162.9M.
How much are the Bulls spending to put a team on the court this year? $147M.

I don't know how to be any more clear than that. Your number is incorrect.

What you are discussing is a managerial accounting problem.

When viewing roster costs, the NBA doesn't count insurance payments as part of its calculus for team cost, so from a team building perspective, neither should you. There are restrictions on spending and rules around the tax, various aprons, and salary cap, and none of them consider insurance paybacks.

From a front office perspective of managing the cap allocation and salary rules, insurance is not factored in, and this is a thread about AKME and what he has done with the money under the tax. You say what I'm doing is wrong, it probably isn't explicitly right or wrong unless you are extremely precise about what you're saying, but my viewpoint is operating from a front office perspective and under league rules for salary calculation using cap numbers not cash flows which is why I'm choosing to use them. I'm not talking about owner profit models.

I don't believe Lonzo's insurance money had any impact on spending whatsoever. Ie, if there were no insurance, I don't think we would have spent any less money. We are following the rules, from a spending perspective, as the league sets them up from a cap allocation perspective not from a cash flow perspective. Do you feel differently? I bet you don't. I bet you agree exactly that Lonzo's insurance money has no impact on the decisions and that if we weren't getting it the costs would be identical, because they follow a long set of historical norms of both the Bulls and all other organizations in acting this way.

When gauging management (purpose of my post and this thread), the league rules are a more relevant metric than cash flows. If you want to get into cash flows we can talk about millions of other things, and that may be a totally relevant topic in an ownership thread, but it's not what I was talking about nor what I am interested in talking about at this moment in time.

At this moment in time, our front office is operating under the same constraints as every other front office and has done a crap job. They have had the ability to go up to the tax line and won't get more unless ownership feels there will be playoff series wins, and that is probably true of how every owner in the league runs their team, and that statement is probably true whether the other cash flows of the org are massive or not massive, and it's even more true today due to the addition of structural penalties and not just financial penalties.

If you want to continue talking about cash flows be my guest, but I don't think it's relevant and I don't care about it. That is not an indictment of you or the topic, it is a statement of my personal interest of the topic and meant to be taking literally (as in, cash flow discussion does not matter to me) and not as an insult to you.

[DuckIII]

AK is getting THRASHED by the Bulls fanbase on Twitter.

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We're reaching pre-Thibs Knicks level of comedy fast

We’re safe from that level of embarrassment unless AK starts sexually harassing employees and then tries to blame his failed suicide attempt on his daughter.

[MikeDC]

The factual inaccuracy is that the "cap perspective" is not "resource allocation".

They're actually 23rd in resource allocation. Resources being what they are paying to field a team. Their actual payroll is the actual amount of resources they are spending. The "cap perspective" is an accounting fiction that includes $16M that's being paid by a third party.

Literally, the are Bulls paying $147M to field a team and some insurance company paying $16M to Lonzo Ball.

To say the Bulls are allocating $163M to the players is factually incorrect. In fact, they are only allocating $147M to the players. Which is significantly less than most teams.

Which gets back to the point. There are lots of valid criticisms of AKME, but this particular one is not.

They knew going into this year (and should have known last year) that Lonzo wouldn't play a minute for them, but the cost of his contract would mostly be covered by insurance. Rather than try to trade him, AKME said, "Hey, I'll give you a playoff team on a rebuilding team budget" and Reinsdorf said "cool".

---------
Going to make this clear.
You say the salary cap says the Bulls are 10th in resource allocation, at $163M. Team 11 was the TWolves at $162.9M according to BBRef.

How much are the TWolves spending to put a team on the court this year? $162.9M.
How much are the Bulls spending to put a team on the court this year? $147M.

I don't know how to be any more clear than that. Your number is incorrect.

What you are discussing is a managerial accounting problem.

When viewing roster costs, the NBA doesn't count insurance payments as part of its calculus for team cost, so from a team building perspective, neither should you.

Every NBA team counts insurance payments as part of its calculus for team cost, so from a team building perspective, so should you.

From a front office perspective of managing the cap allocation and salary rules, insurance is not factored in, and this is a thread about AKME and what he has done with the money under the tax. You say what I'm doing is wrong, it probably isn't explicitly right or wrong unless you are extremely precise about what you're saying, but my viewpoint is operating from a front office perspective and under league rules for salary calculation using cap numbers not cash flows which is why I'm choosing to use them.

And that is why you are wrong. You are saying you operating from a front office perspective, but excluding a detail that no font office would exclude from consideration.

I don't believe Lonzo's insurance money had any impact on spending whatsoever. Ie, if there were no insurance, I don't think we would have spent any less money.

Quite the contrary, there we would have spent $16M more! But we didn't.

We are following the rules, from a spending perspective, as the league sets them up from a cap allocation perspective not from a cash flow perspective. Do you feel differently? I bet you don't. I bet you agree exactly that Lonzo's insurance money has no impact on the decisions

I do not agree at all. And don't understand why you're taking such an obscurantist view. A $16M swing very much has an impact on decisions. The fact of Lonzo's insurance gives the Bulls a built in reduction of $16M in cost. The Bulls have several choices as to what to do with that, limited but not including:

• Use that money to offset the impact of increased spending (e.g go over the luxury tax by a little, and offset some of the hit with the money we don't have to pay Lonzo).
• Trade Lonzo's insurance covered contract for a player or players that can actually play. I recall in the past you saying this was an interesting ideal. If the insurance had "no impact on decisions" this wouldn't be an interesting idea.
• The could make the decision they actually made, which was to minimize their costs for what was obviously going to be a mediocre season anyway. Which is what they did.

and that if we weren't getting it the costs would be identical, because they follow a long set of historical norms of both the Bulls and all other organizations in acting this way.

LOL... but we are getting it. And there's "a long set of historical norms of both the Bulls and all other organizations" considering it valuable to get out of paying a player's salary even he remains on the cap.

That's why, for example, we traded Larry Hughes for Jerome James (and Tim Thomas). James couldn't play anymore and, just like Lonzo, his contract was covered by insurance. So in effect, the Bulls used the insurance to claw back money they'd otherwise have paid out to Hughes. Made them several million dollars.

Other teams do it too. That's why Houston was willing to trade for John Wall knowing he was probably broken. Because they were getting out of Westbrook's huge deal.

If you want to get into cash flows we can talk about millions of other things, and that may be a totally relevant topic in an ownership thread,

Not cash flows, even though you keep saying that. Actual team salary, which is totally relevant to the GM topic, because the GM (with guidance and input) is the guy who's deciding how much the team spends on player salaries.

It's only an "ownership" topic because you seem to think owners don't consider how much GMs actually spend. But they totally do.

[dougthonus]

Every NBA team counts insurance payments as part of its calculus for team cost, so from a team building perspective, so should you.

The NBA does not. I am speaking about the league, not the individual decisions about how various owners may or may not allocate cash, but their behaviors also all back my opinion on the topic, which is that they also won't exceed the tax threshold without a chance to win in the playoffs.

The NBA sets rules for spending. Those rules do not account for insurance paybacks. It's explicitly defined as not counting as cap relief. There are structural rules in place for spending and penalties for various thresholds. Insurance is not counted there.

I'm not sure how much more clearly I can state it. I am not talking about cash flows. I am talking about structural rules governed under the collective bargaining agreement and how salaries work to define thresholds for teams actions and the limitations they possess for going above them or not.

Quite the contrary, there we would have spent $16M more! But we didn't.

If the insurance money were counted as cap relief and not just as cash in hand, do you think we would have spent more money in FA? I think we would have done so.

Which is my point. We are guided by the league cap rules, not the cash rules. The amount of profit is not determining the spend, the cap and league thresholds are. If we lose a 20M dollar marketing deal tomorrow, we won't lop off 20M in roster costs, we'll still spend up to the tax threshold even though profits are worse. If we make a 100M dollar improvement in TV revenue we won't spend more on the roster, we'll still cut it off at the luxury tax line until we reach a talent threshold.

Whether you think that is right or wrong is a different discussion point, but it is my opinion that this is how we would behave. We behave with salary expenses by looking at the cap rules not the cash flows / profit/losses.

My opinion on this subject explains 100% of the Bulls behavior for the entire history of the luxury taxes existence, and I would guess it is highly predictive for all future years as well, which is why I'm using it as a gauge. It also probably explains 98%+ of the use of luxury tax of every other team in the league's spending habits and is similarly predictive there.