Hinkie's letter to Sixers shareholders

[jbk1234]

http://espn.go.com/pdf/2016/0406/nba_hinkie_redact.pdf

Interesting read. What concerns me about his own analysis, beside the transparent false modesty and putative self-criticism, is that he doesn't appear to understand that basketball is a business that is subject to the human condition and that you cannot discount the impact that a record level of losing has on players to zero. It's odd that he recognizes how subconscious and emotional factors can skew decision making at the management level, but simultaneously fails to grasp how players (who are assets in his detached analysis) are susceptible to the same type influences. A top five pick isn't an AAA bond on a balance sheet. Losing 87% of your games your first couple of years can negatively impact development. Branding and culture, additional human considerations, also cannot be discounted to zero. If your organization is perceived as a hot mess, then attracting talent, developing good habits, and avoiding morale problems becomes difficult. Dysfunction can beget dysfunction.

I also found it odd that he understood that basketball was a zero sum game where you can only win at the expense of one your competitors, and yet, he gave away how many wins to acquire his assets? It seems that he overpaid for his own team's lottery picks in that regard. In the last thirty years, three No. 1 picks have won championships by my count - Shaq, Duncan and LBJ. So if you have the worst record, you have a 25% of landing the No. 1 pick. If you have the No. 1 pick, you have a 10% chance of actually landing a franchise changing player (this number could go higher with Towns and AD but they're not there yet). Using Hinkie's own analysis, he paid 70 wins this year alone for a 2.5% chance at a franchise changing player. Except even that seems high because the years when Shaq and LBJ were draft eligible, they were deemed generational talents. If you're paying 70 wins in a year when Ben Simmons is the likely No. 1 pick, then you might paying those wins for a less than 1% chance. I'm not at all convinced that Hinkie, for as smart as he was said to be, was accurate in analyzing the data.

[azwfan]

http://espn.go.com/pdf/2016/0406/nba_hinkie_redact.pdf

Interesting read. What concerns me about his own analysis, beside the transparent false modesty and putative self-criticism, is that he doesn't appear to understand that basketball is a business that is subject to the human condition and that you cannot discount the impact that a record level of losing has on players to zero. It's odd that he recognizes how subconscious and emotional factors can skew decision making at the management level, but simultaneously fails to grasp how players (who are assets in his detached analysis) are susceptible to the same type influences. A top five pick isn't an AAA bond on a balance sheet. Losing 87% of your games your first couple of years can negatively impact development. Branding and culture, additional human considerations, also cannot be discounted to zero. If your organization is perceived as a hot mess, then attracting talent, developing good habits, and avoiding morale problems becomes difficult. Dysfunction can beget dysfunction.

I also found it odd that he understood that basketball was a zero sum game where you can only win at the expense of one your competitors, and yet, he gave away how many wins to acquire his assets? It seems that he overpaid for his own team's lottery picks in that regard. In the last thirty years, three No. 1 picks have won championships by my count - Shaq, Duncan and LBJ. So if you have the worst record, you have a 25% of landing the No. 1 pick. If you have the No. 1 pick, you have a 10% chance of actually landing a franchise changing player (this number could go higher with Towns and AD but they're not there yet). Using Hinkie's own analysis, he paid 70 wins this year alone for a 2.5% chance at a franchise changing player. Except even that seems high because the years when Shaq and LBJ were draft eligible, they were deemed generational talents. If you're paying 70 wins in a year when Ben Simmons is the likely No. 1 pick, then you might paying those wins for a less than 1% chance. I'm not at all convinced that Hinkie, for as smart as he was said to be, was accurate in analyzing the data.

Good post, and i agree 100%. On top of that also consider that LBJ and Shaq won their titles (so far) with teams who did not draft them.

[bryanwithawhy]

It's scary how few people understand what he was doing. It just goes to show you how stupid the average person is.

[Domejandro]

It's scary how few people understand what he was doing. It just goes to show you how stupid the average person is.

I'm guessing this is a swipe at Sam Hinkie, but I guess I am an idiot, haha. He did an excellent job compiling assets and remolding the team. They are in a great position now.

[jbk1234]

It's scary how few people understand what he was doing. It just goes to show you how stupid the average person is.

Meaning...

[LofJ]

I agree in principle with your argument, but you omitted a major factor in what makes the lottery appealing. While there haven't been many number one picks whom have won championships, there are a ton of top 7 picks that have done so.

KG
Curry
Ray Allen
Kidd
Bogut (he seems to have been forgotten)
Gasol
Bosh
Chandler
Wade, etc,

The importance of the number one pick is massively overrated though, you are right on the money about that.

[Arp590]

It's scary how few people understand what he was doing. It just goes to show you how stupid the average person is.

I'm guessing this is a swipe at Sam Hinkie, but I guess I am an idiot, haha. He did an excellent job compiling assets and remolding the team. They are in a great position now.

No just the opposite. I read this as the average person is too stupid to comprehend Hinkie's master plan, which I believe has worked out great.

[jbk1234]

It's scary how few people understand what he was doing. It just goes to show you how stupid the average person is.

I'm guessing this is a swipe at Sam Hinkie, but I guess I am an idiot, haha. He did an excellent job compiling assets and remolding the team. They are in a great position now.

But by his own analysis, the currency of the NBA is wins. It seems to me that he paid a premium in current wins in order to increase his odds by a minuscule percentage at future wins. I mean if I buy one million lottery tickets for a billion dollar payoff, that's not a good investment. It doesn't matter that I reduced the odds from one in five billion to one in five thousand. The odds are still heavily stacked against me and I have $1 million at risk. It's an admittedly imperfect analogy because every team in the NBA, even the Warriors, lose a game and "pay" a win. Bad teams, who aren't trying to be bad, are going to "pay" wins whether they want to or not. But in terms of determining whether Hinkie paid more than he had to, I think it works. He uses the Warriors as an example of long-term results, but neglects to mention that none of their key players was a top 5 pick.

[PDX MM]

In the last thirty years, three No. 1 picks have won championships by my count - Shaq, Duncan and LBJ

You forgot about Andrew Bogut for the past 30 years part.

I am sure I am missing some but going back to the late 50's these are the #1 picks that I know won championships:

Hakkem Olajuwon
Elgin Baylor
Oscar Robertson
Kareem
Bill Walton
James Worthy
David Robinson
Magic

So yeah winning it all as a #1 pick isn't all that common and I will admit this does surprise me some.

[Renegade_H]

In the last thirty years, three No. 1 picks have won championships by my count - Shaq, Duncan and LBJ

You forgot about Andrew Bogut for the past 30 years part.

I am sure I am missing some but going back to the late 50's these are the #1 picks that I know won championships:

Hakkem Olajuwon
Elgin Baylor
Oscar Robertson
Kareem
Bill Walton
James Worthy
David Robinson
Magic

So yeah winning it all as a #1 pick isn't all that common and I will admit this does surprise me some.

We got the next Olajuwon. We good.

[jbk1234]

I agree in principle with your argument, but you omitted a major factor in what makes the lottery appealing. While there haven't been many number one picks whom have won championships, there are a ton of top 7 picks that have done so.

KG
Curry
Ray Allen
Kidd
Bogut (he seems to have been forgotten)
Gasol
Bosh
Chandler
Wade, etc,

The importance of the number one pick is massively overrated though, you are right on the money about that.

Even a top three pick is overrated given how the lottery is structured and how bad you have to be to get one. You can get good talent outside of the top three and double or triple your win total. The value of deliberately racing to the bottom doesn't seem to be there.

[Devilzsidewalk]

All these long, rambling letters remind me of the long e-mail I sent to the first girl I really fell for when she dumped me. Just thinking about it gives me embarrassment chills.

The Sixers dumped you Hinkie - man the **** up - she was just an immature whore anyways. She tried to get you to have a front office threesome that includes a father/son duo, that is sick. You should be counting your blessings.

[jbk1234]

In the last thirty years, three No. 1 picks have won championships by my count - Shaq, Duncan and LBJ

You forgot about Andrew Bogut for the past 30 years part.

I am sure I am missing some but going back to the late 50's these are the #1 picks that I know won championships:

Hakkem Olajuwon
Elgin Baylor
Oscar Robertson
Kareem
Bill Walton
James Worthy
David Robinson
Magic

So yeah winning it all as a #1 pick isn't all that common and I will admit this does surprise me some.

Bogut who the Warriors benched after they were down 2-1 in the Finals last year?

[Froob]

All these long, rambling letters remind me of the long e-mail I sent to the first girl I really fell for when she dumped me. Just thinking about it gives me embarrassment chills.

The Sixers dumped you Hinkie - man the **** up - she was just an immature whore anyways. She tried to get you to have a front office threesome that includes a father/son duo, that is sick. You should be counting your blessings.

lol did you use Warren Buffett quotes and compare yourself to great NFL coaches? "Your decision to dump me reminds me of when John Harbaugh decided to bench Alex Smith for Colin Kaepernick."

[PDX MM]

Bogut who the Warriors benched after they were down 2-1 in the Finals last year?

You didn't state that the player had to play big minutes to get on that list. He was a #1 pick and was on a championship winning team.

[Ghostly11]

When people say RealGM posters can be better GMs than the actual GMs I believe this letter from Hinkie validates that statement. I understand that Hinkie is an incredibly intelligent person, and capable of a lot of but sometimes it takes a basketball mind to really understand basketball. Not only a high business intelligence.

He took 13 pages to basically say his strategy was tank and acquire young assets. This isn't exactly a revolutionary approach. His in-depth analysis is great and I learned a lot from it, but at the end of the day a GM that can understand basketball as a sport and develops a culture of high player morale, and considers strategic offenses/defenses when making personnel decisions will be far more successful.

GMs like Morey and Hinkie while very intelligent, focus on business/data too much while neglecting the intricacies of the sport itself and don't realize that there is more to winning in basketball than acquiring personnel. A lesson I believed would have been learned after the Knicks and Nets attempted to create a contending team by force and built teams that barely made the playoffs.

[jbk1234]

Bogut who the Warriors benched after they were down 2-1 in the Finals last year?

You didn't state that the player had to play big minutes to get on that list. He was a #1 pick and was on a championship winning team.

That's literally true but irrelevant. The Warriors didn't even draft Bogut and he isn't the type of player that Hinkie was hoping to get when he decided to pursue the 1 in 4 odds of getting the No. 1 pick by losing as many games as possible.

[Slava]

I agree in principle with your argument, but you omitted a major factor in what makes the lottery appealing. While there haven't been many number one picks whom have won championships, there are a ton of top 7 picks that have done so.

KG
Curry
Ray Allen
Kidd
Bogut (he seems to have been forgotten)
Gasol
Bosh
Chandler
Wade, etc,

The importance of the number one pick is massively overrated though, you are right on the money about that.

Except Wade, none of them won with the franchise that drafted them. KG, Kidd & Ray Allen effectively had to migrate at the end of their careers to win one.

[Snotbubbles]

http://espn.go.com/pdf/2016/0406/nba_hinkie_redact.pdf

Interesting read. What concerns me about his own analysis, beside the transparent false modesty and putative self-criticism, is that he doesn't appear to understand that basketball is a business that is subject to the human condition and that you cannot discount the impact that a record level of losing has on players to zero. It's odd that he recognizes how subconscious and emotional factors can skew decision making at the management level, but simultaneously fails to grasp how players (who are assets in his detached analysis) are susceptible to the same type influences. A top five pick isn't an AAA bond on a balance sheet. Losing 87% of your games your first couple of years can negatively impact development. Branding and culture, additional human considerations, also cannot be discounted to zero. If your organization is perceived as a hot mess, then attracting talent, developing good habits, and avoiding morale problems becomes difficult. Dysfunction can beget dysfunction.

I also found it odd that he understood that basketball was a zero sum game where you can only win at the expense of one your competitors, and yet, he gave away how many wins to acquire his assets? It seems that he overpaid for his own team's lottery picks in that regard. In the last thirty years, three No. 1 picks have won championships by my count - Shaq, Duncan and LBJ. So if you have the worst record, you have a 25% of landing the No. 1 pick. If you have the No. 1 pick, you have a 10% chance of actually landing a franchise changing player (this number could go higher with Towns and AD but they're not there yet). Using Hinkie's own analysis, he paid 70 wins this year alone for a 2.5% chance at a franchise changing player. Except even that seems high because the years when Shaq and LBJ were draft eligible, they were deemed generational talents. If you're paying 70 wins in a year when Ben Simmons is the likely No. 1 pick, then you might paying those wins for a less than 1% chance. I'm not at all convinced that Hinkie, for as smart as he was said to be, was accurate in analyzing the data.

Magic Johnson #1 pick won titles in 86-87 & 87-88
Hakeem Olajuwon #1 pick won titles in 93-94 & 94-95
Mark Aguirre #1 pick won titles in 88-89 & 89-90

So by my count 17 of the past 30 NBA championships have been won with a #1 pick making a major contribution to the team. If you bump that to top 3 pick it becomes something like 24 out of 30. So yeah, drafting in the top 3 is pretty significant.

[jbk1234]

http://espn.go.com/pdf/2016/0406/nba_hinkie_redact.pdf

Interesting read. What concerns me about his own analysis, beside the transparent false modesty and putative self-criticism, is that he doesn't appear to understand that basketball is a business that is subject to the human condition and that you cannot discount the impact that a record level of losing has on players to zero. It's odd that he recognizes how subconscious and emotional factors can skew decision making at the management level, but simultaneously fails to grasp how players (who are assets in his detached analysis) are susceptible to the same type influences. A top five pick isn't an AAA bond on a balance sheet. Losing 87% of your games your first couple of years can negatively impact development. Branding and culture, additional human considerations, also cannot be discounted to zero. If your organization is perceived as a hot mess, then attracting talent, developing good habits, and avoiding morale problems becomes difficult. Dysfunction can beget dysfunction.

I also found it odd that he understood that basketball was a zero sum game where you can only win at the expense of one your competitors, and yet, he gave away how many wins to acquire his assets? It seems that he overpaid for his own team's lottery picks in that regard. In the last thirty years, three No. 1 picks have won championships by my count - Shaq, Duncan and LBJ. So if you have the worst record, you have a 25% of landing the No. 1 pick. If you have the No. 1 pick, you have a 10% chance of actually landing a franchise changing player (this number could go higher with Towns and AD but they're not there yet). Using Hinkie's own analysis, he paid 70 wins this year alone for a 2.5% chance at a franchise changing player. Except even that seems high because the years when Shaq and LBJ were draft eligible, they were deemed generational talents. If you're paying 70 wins in a year when Ben Simmons is the likely No. 1 pick, then you might paying those wins for a less than 1% chance. I'm not at all convinced that Hinkie, for as smart as he was said to be, was accurate in analyzing the data.

Magic Johnson #1 pick won titles in 86-87 & 87-88
Hakeem Olajuwon #1 pick won titles in 93-94 & 94-95
Mark Aguirre #1 pick won titles in 88-89 & 89-90

So by my count 17 of the past 30 NBA championships have been won with a #1 pick making a major contribution to the team. If you bump that to top 3 pick it becomes something like 24 out of 30. So yeah, drafting in the top 3 is pretty significant.

Well I said drafted in the last 30 years. Those guys weren't. But if you want to go back and recalculate the odds over 40 years the percentages are rougly the same. The fact three guys in 30 years, or 5 guys in 40 years (I'm not including Aguirre) had the ability to lead their teams to multiple Championships doesn't increase your odds of getting one in a single year.