The myth of Reinsdorf's cheapness

[Mech Engineer]

I agree with the "cheap" as in run like a business categorization. I just don't agree that it's such a bad thing, especially in the NBA, where reckless spending can sabotage a franchise.

But not because the business can't afford it. The sabotage comes from the constraints enforced by the salary cap, which is another matter altogether.

It is also a lot about what happens when you cut corners. Look at Miami's decision to amnesty Mike Miller or giving up a pick for Joel Anthony to be gone. If Miami had won the championship this year, that news wouldn't be a big deal for LeBron or anyone. Now, the perception is out that Arison was trying to save money when they a chance for a championship.

The same way, the perception about Reinsdorf being cheap(or whining about money) when the Bulls were winning championships is out there. Myth or not, everytime you hear a national reporter...they are talking about the Bulls spending habits.

Paxson has kind of tried to address this many times in interviews but this is something which doesn't go away with interviews or small actions. It will take an event like winning a championship with a high payroll for that opinion to go away.

The only worry/impact is something we don't know. Does this factor in a Melo or LeBron type players when they make their free agent decisions? If it does, the Bulls are in trouble.

[85Bears]

Since 2010 bulls have been top 5 in payroll. They don't make bad roster decisions just because they are profitable. Spending the most money doesn't buy you the best team in the Nba.

Bulls are in a very good flexible position this year and it is not because they are cheap. They expected Rosé to have 3-4 shots a title with the team we have had with the flexibility to change things up this summer as players aged (Deng boozer).

I am glad we don't have joe Johnson, stoudamire oj mayo, Eric Gordon, Ben Gordon, jr smith. We would have an owner that isn't cheap, but would be considered an idiot.

[coldfish]

Since 2010 bulls have been top 5 in payroll. They don't make bad roster decisions just because they are profitable. Spending the most money doesn't buy you the best team in the Nba.

Bulls are in a very good flexible position this year and it is not because they are cheap. They expected Rosé to have 3-4 shots a title with the team we have had with the flexibility to change things up this summer as players aged (Deng boozer).

I am glad we don't have joe Johnson, stoudamire oj mayo, Eric Gordon, Ben Gordon, jr smith. We would have an owner that isn't cheap, but would be considered an idiot.

Unless your owner is James Dolan and you don't have a brain, there is a strong correlation between spending and winning. You are right though that intelligence is a bigger factor than spending. What we want is a smart owner who is willing to spend. We really don't have that.

[McBulls]

Since 2010 bulls have been top 5 in payroll. They don't make bad roster decisions just because they are profitable. Spending the most money doesn't buy you the best team in the Nba.

Bulls are in a very good flexible position this year and it is not because they are cheap. They expected Rosé to have 3-4 shots a title with the team we have had with the flexibility to change things up this summer as players aged (Deng boozer).

I am glad we don't have joe Johnson, stoudamire oj mayo, Eric Gordon, Ben Gordon, jr smith. We would have an owner that isn't cheap, but would be considered an idiot.

'85 Bears made a bad roster decision when the let Gault go to LA.

Multiply that bad move by 10 or so when you talk about the Bulls.

[coldfish]

I'll give a hypothetical. This year the Bulls traded Deng for Bynum and some garbage. Bynum was the only contract in the NBA that allowed the Bulls to get under the tax barrier. So, OK, fine, Deng is gone. Was there a team out there who was willing to give the Bulls an expiring contract and more valuable assets for Deng and his bird rights? Probably.

Now, someone is going to bring up repeater tax or something. Wrong. The Bulls have virtually no shot of being over the tax barrier for the next two years. Repeater tax was never a possibility. So, if Chicago had traded Deng for better assets they would have paid tax, but they would have been in a better position this year to do something like get Carmelo in sign and trade.

These are the type of scenarios we can't discuss because we don't know what is really on the table. We can't point to hard and firm instances of cheapness because we don't have the information. All we have is the undeniable data that season after season, the Bulls spend less than the big boys, despite being one of the big boys themselves.

JR's cheapness does have an underlying impact on the on court team.

.....

Oh, and the Boozer amnesty doesn't really cost the team that much versus a normal season. Your total player expenses will be the same as in a sign and trade scenario. There are two scenarios where the Bulls move outside of that $75M or so total cost:
- They go the ultra cheap route and refuse to amnesty boozer. I think JR is cheap, but I don't think he is "slit your own throat" cheap, which is what that would be.
- They do something like amnesty boozer and then do a sign and trade using a lot of the non guaranteeds and then spend the MLE and biannual. That would push total player costs well over $80M and would be impressive.

[Red Larrivee]

The Pau Gasol trade negotiations years ago sticks out to me mainly. It sounds like Chicago essentially had Gasol in the bag and all they had to do was sign P.J. Brown to an $8 million contract with his bird rights to match up the salaries. They told Memphis no, because they weren't interested in going into the luxury tax to do so.

Q. When did you realize that a financial deal had to be made?

A. I realized it when we tried to negotiate with Chicago. They weren't interested in giving us financial relief. We had other conversations with teams and the people they were giving us back were veterans with substantial money left on their contracts. They were not of the same quality that Pau was.

We didn't feel like we had a trade that was going to give us quality for quality or someone that would change the direction of the team that much. We had conversations with Chicago which were non-satisfactory. They didn't want to take on the luxury-tax situation and Los Angeles was. In this league, if you're in a big-market area you can afford to do those things. We negotiated as hard as we could for quality players and (Chicago) refused to give up anybody in their core group. What they offered us were guys who play on the second and third team, so we turned them down.

Brown's reluctance to play in the NBA might actually be moot anyway. If the Bulls were to do a sign-and-trade with Brown, they would be facing a luxury-tax hit by adding to their payroll the full amount of any players acquired in the deal. According to Grizzlies owner Michael Heisley, one reason Gasol wasn't traded to the Bulls was because of Chicago's unwillingness to pay the luxury tax.

That just doesn't sound like doing what it takes to put the best basketball product on the floor (within reason). It looks even sillier now given that luxury tax rules are going to be much stricter going forward.

[PJ Brown]

I agree with the "cheap" as in run like a business categorization. I just don't agree that it's such a bad thing, especially in the NBA, where reckless spending can sabotage a franchise.

But not because the business can't afford it. The sabotage comes from the constraints enforced by the salary cap, which is another matter altogether.

My point is that the salary cap is what matters. Cap management isn't as important as talent evaluation but it's right up there. Making prudent decisions in a salary cap situation and keeping your options open is generally to your advantage, and spending like money is no object generally isn't.

[bledredwine]

It's not a myth. Jerry Reinsdorf is cheap. He isn't an outright owner like Cuban, therefore his bottom line is more important to his investors. Remember, he is chairman of a group of investors who expect return on their coin. I don't think he is terminally cheap, but the Sox and Bulls have consistently been run very frugally by Reinsdorf. When the respective fanbases clamored for spending, though, he has answered the bell at times. I think as a default he is thinking about ways to cut costs rather than add that extra player.

It has always been this way and it will always be this way until someone else own the Bulls.

Bingo. We generally stick with rookie/1st contracts and cheap roll players for a reason. And on top of this, there have been numerous occasions where we didn't want to pay a player who could help. Red mentioned one with the Pau incident. Jamal Crawford was a pathetic example as well.

[mostek]

The Bulls signed the non-guaranteed guys for a reason. In a S&T, where NY forces the Bulls to take back Smith, with Melo, and Melo got near the max, and the Bulls used their exceptions, the Bulls would be way over the tax threshold.

Boozer, Dunleavy, 3 contracts, picks -> Melo ($22.67M), Smith

With a cap hold for the 12th player, that totals $77.7M, with a hard cap of ~$81M, not enough to use the full MLE. Trading Randolph into cap space, and adding a cap hold, gets to $76.4M, enough to use the full MLE, if Melo took slightly less. That takes you all the way to the hard cap, without enough to use the BAE, or even the required 13th player, even on a minimum salary deal. You can see how easy it is to pay the tax this season.

Avoiding the repeater tax was a big deal, not only for the willingness to go into the tax this season, but even if they stay under this season, the clock would be ticking, with a 4 year potential impact. Since they paid on 2012 - 2103, if they would have paid in 2013 - 2014, the repeater tax would come into play if they exceeded the tax in either of 2014 - 2015, or 2015 - 2016, and still been part of the calculation, until 2016 - 2017.

[85Bears]

Bulls have has the 5th highest pYroll the last 2 yearspayroll

[dice]

With Pippen, they had the MLE and they spent it on a guy who only wanted 2 years. Back then, MLE deals could be up to 6 years. They *saved money* by giving that MLE to Pippen instead of someone else.

or they could've given it to nobody and pocketed 10 mil instead of paying a guy to do very little for one season and then waiving him

[dice]

It's not a myth. Jerry Reinsdorf is cheap. He isn't an outright owner like Cuban, therefore his bottom line is more important to his investors. Remember, he is chairman of a group of investors who expect return on their coin. I don't think he is terminally cheap, but the Sox and Bulls have consistently been run very frugally by Reinsdorf. When the respective fanbases clamored for spending, though, he has answered the bell at times. I think as a default he is thinking about ways to cut costs rather than add that extra player.

It has always been this way and it will always be this way until someone else own the Bulls.

Bingo. We generally stick with rookie/1st contracts and cheap roll players for a reason. And on top of this, there have been numerous occasions where we didn't want to pay a player who could help. Red mentioned one with the Pau incident. Jamal Crawford was a pathetic example as well.

jamal crawford held out for a bigger contract and ended up settling for less after everyone else, including the bulls, had moved on and signed other players

[coldfish]

With Pippen, they had the MLE and they spent it on a guy who only wanted 2 years. Back then, MLE deals could be up to 6 years. They *saved money* by giving that MLE to Pippen instead of someone else.

or they could've given it to nobody and pocketed 10 mil instead of paying a guy to do very little for one season and then waiving him

Then people like you would call them cheap. It would be counter productive for them to start absolutely cutting the team to the bone because they could only save so much and doing so might jeopardize the cash cow that is the Chicago media market.

What they continually do is this salary treamdmill as they bring in a player and then move someone out the back door and give vague basketball reasons like "flexibility" for doing so while intentionally not pursuing any talent upgrade that might cut into their budgeted profit margin.

.....

I can't find the link right now, but according to Forbes, the Bulls were the most profitable team in sports from 2000 on (when they started tracking it). That doesn't bother people? The Bulls are in the 3rd largest market and play the 3rd most popular sport. The fact that they have generated more operating income than teams like the Yankees, Knicks, Cowboys, Red Sox, Giants, Lakers, etc. doesn't strike some people as . . . odd?

Edit:
http://www.chicagonow.com/chicago-bulls ... f-profits/

Sorry, 2nd most profitable behind the Redskins. And this might not be true anymore with the NFL's new deal. NFL teams have been killing it lately. The Bulls still had a 12 year run where they were playing way above their grade though.

And yes, the White Sox are run completely differently. A break even team.

[SHO'NUFF]

Imagine if JR was the owner of the Cavs or Bucks.

[dice]

With Pippen, they had the MLE and they spent it on a guy who only wanted 2 years. Back then, MLE deals could be up to 6 years. They *saved money* by giving that MLE to Pippen instead of someone else.

or they could've given it to nobody and pocketed 10 mil instead of paying a guy to do very little for one season and then waiving him

Then people like you would call them cheap

there would be more evidence of it then, yes

It would be counter productive for them to start absolutely cutting the team to the bone because they could only save so much and doing so might jeopardize the cash cow that is the Chicago media market.

sure. but the average fan, who reinsdorf would be catering to as a businessman, doesn't particularly care whether he gives scottie pippen a $10 mil parting gift. the pure business move would be to give that money to a mediocre but exciting player to watch. like a nate robinson. the pure business move would be to hire mike d'antoni rather than tom thibideau. to bring in j.r. smith instead of jimmy butler

What they continually do is this salary treamdmill as they bring in a player and then move someone out the back door and give vague basketball reasons like "flexibility" for doing so while intentionally not pursuing any talent upgrade that might cut into their budgeted profit margin.

melo wouldn't even be a name on our radar if that was the case

there's a difference between avoiding luxury tax and cheapness

I can't find the link right now, but according to Forbes, the Bulls were the most profitable team in sports from 2000 on (when they started tracking it). That doesn't bother people? The Bulls are in the 3rd largest market and play the 3rd most popular sport. The fact that they have generated more operating income than teams like the Yankees, Knicks, Cowboys, Red Sox, Giants, Lakers, etc. doesn't strike some people as . . . odd?

that's what happens when you have years of sellouts on the books from a just dismantled dynasty. they were able to field **** teams with low payrolls and rake in dough for years. the first 3 post-dynasty years the bulls were under the salary cap, i believe. you could argue they were tanking for draft picks, but really that was the only stretch of time they weren't looking to put a quality product on the court

And yes, the White Sox are run completely differently. A break even team.

the ultimate evidence reinsdorf isn't cheap

[FecesOfDeath]

I can't find the link right now, but according to Forbes, the Bulls were the most profitable team in sports from 2000 on (when they started tracking it). That doesn't bother people? The Bulls are in the 3rd largest market and play the 3rd most popular sport. The fact that they have generated more operating income than teams like the Yankees, Knicks, Cowboys, Red Sox, Giants, Lakers, etc. doesn't strike some people as . . . odd?

Edit:
http://www.chicagonow.com/chicago-bulls ... f-profits/

Sorry, 2nd most profitable behind the Redskins. And this might not be true anymore with the NFL's new deal. NFL teams have been killing it lately. The Bulls still had a 12 year run where they were playing way above their grade though.

And yes, the White Sox are run completely differently. A break even team.

Just because Chicago is behind only NYC and LA in market terms doesn't mean it's in the same tier as NYC or LA.

http://en.wikipedia.org/wiki/List_of_metropolitan_areas_of_the_United_States

[coldfish]

I can't find the link right now, but according to Forbes, the Bulls were the most profitable team in sports from 2000 on (when they started tracking it). That doesn't bother people? The Bulls are in the 3rd largest market and play the 3rd most popular sport. The fact that they have generated more operating income than teams like the Yankees, Knicks, Cowboys, Red Sox, Giants, Lakers, etc. doesn't strike some people as . . . odd?

Edit:
http://www.chicagonow.com/chicago-bulls ... f-profits/

Sorry, 2nd most profitable behind the Redskins. And this might not be true anymore with the NFL's new deal. NFL teams have been killing it lately. The Bulls still had a 12 year run where they were playing way above their grade though.

And yes, the White Sox are run completely differently. A break even team.

Just because Chicago is behind only NYC and LA in market terms doesn't mean it's in the same tier as NYC or LA.

http://en.wikipedia.org/wiki/List_of_metropolitan_areas_of_the_United_States

Not sure what your point is. Are you backing me up that its really, really, really strange that a basketball team out of Chicago could be top 2 in profit for all sports franchises?

[FecesOfDeath]

Not sure what your point is. Are you backing me up that its really, really, really strange that a basketball team out of Chicago could be top 2 in profit for all sports franchises?

It means that Reinsdorf doesn't have the inherent advantage of generating revenue though mega-dollar cable TV deals that owners of sports franchises in NYC and LA can, and since he's not a billionaire like the other two thirds of the NBA owners are, he has to run the Bulls like a business. However, that's still much different from being cheap. Donald Sterling was cheap (pre-Griffin). Herb Simon (Pacers owner, net worth $2.05 billion) is cheap. Reinsdorf (net worth $280 million) is not cheap. Even Michael Jordan has more net worth than Reinsdorf does.

Anyway, there were already numerous examples of Reinsdorf's non-cheapness mentioned earlier in this thread.

[transplant]

This is one of those cases where it's not worth arguing, because the POVs are already so strongly set that "truth" becomes meaningless.

This said, I need to state my POV (again) for the record.

Bulls management isn't and never has been "cheap," even using a relative standard. It disappoints me that there are some posters for whom I have a great deal of respect who clearly disagree with my position. I believe they are misguided.

In today's NBA, there's really only one wild-spending owner and that's Prokhorov. If you like his team's cap position and future, you need to re-think your position. Not being Prokhorov isn't being cheap. As a fan, you really don't want Prokhorov as your owner and if you don't understand why this is true, you shouldn't be in this discussion.

Reinsdorf hates what he considers stupid spending. He rightly believes that it hurts the game. He won't spend stupid and if this makes him cheap, then he's cheap.

But ask yourself when Reinsdorf's money let you down. Asik's the only one that comes to mind for me. If Asik's $15mil was on the Bulls books right now, would the team be better off?

Anyway, have at it, kids, but put my vote firmly in the "myth" column.

[coldfish]

Not sure what your point is. Are you backing me up that its really, really, really strange that a basketball team out of Chicago could be top 2 in profit for all sports franchises?

It means that Reinsdorf doesn't have the inherent advantage of generating revenue though mega-dollar cable TV deals that owners of sports franchises in NYC and LA can, and since he's not a billionaire like the other two thirds of the NBA owners are, he has to run the Bulls like a business. However, that's still much different from being cheap. Donald Sterling was cheap (pre-Griffin). Herb Simon (Pacers owner, net worth $2.05 billion) is cheap. Reinsdorf (net worth $280 million) is not cheap. Even Michael Jordan has more net worth than Reinsdorf does.

Anyway, there were already numerous examples of Reinsdorf's non-cheapness mentioned earlier in this thread.

The Bulls make roughly 50m a year in operating income. Probably more last year. If the Bulls were run like most NBA teams and the White Sox (ie break even), the Bulls could take on huge amounts of salary. If spent wisely, this would have a significant and positive impact on the performance of the team. They could do things like buying draft picks like several teams just did on draft night. There are many other ways the team could upgrade itself.

All of this could be done without Reinsdorf spending one bit of his personal wealth on players.

Quite frankly, none of those other guys are either. It doesn't work like that. Teams take on debt against their valuation, which is huge. No owner is dipping into his own pocket to pay players.

As I noted, we really don't have the ability to evaluate Reinsdorf's cheapness on a case by case basis because we have no idea what is getting turned down due to monetary reasons. The Gasol potential trade where Heisley went public with the Bulls' refusal to take on salary was a rare event. Normally that stuff stays quiet.