The Plight of Small Market Teams in the NBA
Donovan Mitchell of the Utah Jazz
The 2022 NBA free agency has been wild with players signing with new teams left and right. However, there have been a couple of transactions that need to be brought to light due to the fact that teams are willing to spend more money than ever to retain their star players. First, the Washington Wizards and their star shooting guard Bradley Beal agreed on a five-year 251 million dollar supermax contract extension. Damian Lillard, the superstar point guard for the Portland Trail Blazers, also signed a two-year maximum contract extension for $122 million. Other teams traded away such players on large contracts. The Utah Jazz, after making the playoffs in each of the last six seasons but failing to advance past the second round, decided to trade away their All-Star center, Rudy Gobert, who was on a five-year $205 million contract, to the Minnesota Timberwolves for a slew of players and five future first round draft picks. Now, they are actively looking to trade their star guard, Donovan Mitchell to kickstart a rebuild. Other teams have had to overpay to keep a player because they knew replacing the player was going to be very difficult. Deandre Ayton, who was a restricted free agent in this year’s offseason, was offered a four-year $133 million contract by the Indiana Pacers, but the Phoenix Suns, his original team, matched the offer to keep him, a price that they were originally unwilling to pay.
The common theme for these teams is that they are having to overpay to keep their superstars. In the case of an aging star player, the team knows that their star will not be worth the contract that they gave out in a few years. However, they have no choice but to pay the superstar the money that he demands. This is because without the promise of a bigger contract, superstar players generally do not want to play for small market teams, which are teams that are generally located in less populated cities that do not receive much media attention. As a result, the revenue for these teams is often much less than teams in major cities such as Los Angeles or New York, where there are a lot more people and are home to many national media outlets, greatly compromising their ability to give out large contracts to lure good players to play for them. This makes it much harder for small market teams to be able to sign star players to their roster, meaning that
A small market team also might pay a young player a ludicrous amount of money relative to his current skill level to keep him, even if the player is injured, purely due to his potential of developing into a star player. Zion Williamson, the first overall draft pick by the New Orleans Pelicans in 2019, was injured for the entire season in 2021-22 and has only played a total of 85 games in three seasons while missing 117 games. Still, he managed to secure a five-year maximum contract extension worth a whopping $193 million with incentives that can bring that figure up to $231 million.
In paying a young player such a large amount of money, the team expects the player to stay on the team for the duration of the contract so that the team can build a good team around the player. However, if the player is not satisfied with the direction the team is going , he may demand a trade even after getting a luxurious contract. Anthony Davis, an all star center who was drafted by the Pelicans, demanded to be traded from the team even though the team had signed him to the five year $145 million maximum contract. Similarly, Kawhi Leonard, who was drafted by the San Antonio Spurs and eventually developed into one of the best players in the NBA, demanded to be traded to a team in a bigger city, despite also receiving a five year maximum contract extension from the Spurs.
In both cases, the players wanted to leave their respective teams that drafted them to go to a team in a larger city where they would get more media attention and more opportunities to expand their individual sponsorship deals. In these situations, the team is put at the mercy of its star player because if the team does not trade the player, he might refuse to play for the team, or just leave the team for nothing in return once his contract with the team is over.
Even when players want to stay, if the team consistently underperforms, small market teams are impacted much more dramatically. Take the Utah Jazz, for example. Despite winning a league best 52 games in the 2020-2021 season, they lost in the second round of the NBA playoffs to the Los Angeles Clippers despite the Clippers’ Kawhi Leonard, their best player, being injured for part of the series. Even though the team made six straight playoff appearances from 2017 to 2022, the team failed to advance past the second round, and with bigger contracts handed out to its stars Rudy Gobert and Donovan Mitchell, the team continued to get expensive, with ownership having to pay the luxury tax, additional money owed to the league for having a team payroll higher than the fixed amount a team is allowed to spend for the season, for a team that was not good enough to compete for a championship. For a team like the Jazz, due to its location in a city with a smaller population, the team generates less revenue than a team like the Warriors. One reason for the lesser revenue is due to a smaller number of fans attending the games which leads to less ticket sales. Furthermore, the team has less TV broadcast deals than other well-known teams in bigger cities because unlike teams such as the Warriors and Lakers, who are supported by fans around and have the star players that are well-known to fans around the world, not many people outside the state of Utah are interested in watching the Jazz, who have lesser known players. As a result, when the payroll of the team exceeds the salary cap and the luxury tax needs to be paid, the team’s ownership cannot afford to repeatedly pay the tax for multiple seasons in a row and eventually, it has to decide whether or not to move on from the players on large contracts to try to build a competitive team again with different players. On the other hand, teams like the Warriors, Lakers, and Nets, all of which are located in big cities, have larger sponsorship and broadcast deals, more fans, and have much richer owners, can afford to pay for the luxury tax that comes with giving players large contracts and stay over the salary cap for many years, making it much easier for them to build a winning team.
Still, there are success stories for small market teams as well, albeit rare. In the early 2010s, the Indiana Pacers, led by Paul George, were contenders in the Eastern Conference, reaching back-to-back Conference Finals in 2013 and 2014 but losing to the Miami Heat, led by LeBron James, Dwyane Wade, and Chris Bosh both times. The San Antonio Spurs are arguably the paragon of small market teams. With hand picked stars Tim Duncan, Manu Ginobilli, Tony Parker and later on Kawhi Leonard, they managed to win five NBA championships in a span of 20 years. A more recent example is the Milwaukee Bucks, who won the 2021 NBA Championship with homegrown superstars, Giannis Antetokounmpo and Khris Middleton, at the helm. However, prior to their title, there was a lot of speculation about where Antetokounmpo might sign in free agency in the summer due to the fact that despite having the best record in their conference for the past two seasons, they had not yet reached the NBA Finals.
The thing is, you need superstar players to win at the highest level in the NBA. However, these superstars are hard to come by for small market teams. Teams have to make good decisions across the board, from the players they choose to draft and sign to the contracts they give out to these players. Since it is difficult for them to sign good players to their team, it is more challenging for these small market teams to be in a legitimate position to compete for an NBA Championship than their richer counterparts. So next time you see a team that is from a city you may not be familiar with, cheer for them. It takes a lot more effort for them to become good than it does for teams in big cities.