Sports Business

Dollars say Dwyane Wade a better investment for Bulls than Derrick Rose

Dollars say Dwyane Wade a better investment for Bulls than Derrick Rose

The NBA offseason has been a bull market for free agency. The league's massive new television agreement virtually triples the amount of money the NBA makes from rights fees, compared to its previous deal. With a higher salary cap, teams could spend millions of dollars on new players during the free agency period. The question for all teams became: how could it most effectively spend this new money on players that would have the greatest overall impact on their organization.

The Bulls made several notable free agent moves this summer. The biggest transactions involved a trade between the Bulls and New York Knicks headlined by Derrick Rose and Robin Lopez, the signings of Dwyane Wade and Rajon Rondo, and not re-signing Joakim Noah or Pau Gasol. Many fans are still debating whether these moves will help the Bulls return to their winning ways and enable them to once again make the playoffs.

However, Block Six Analytics Revenue Above Replacement (RAR) model shows that the Bulls should be a clear winner in acquiring new players that can generate more potential revenue for the team. RAR evaluates how an individual player’s on-court and off-court performance impacts a team’s ability to make money. Why on-court and off-court factors? While winning is important, NBA teams don't only generate revenue based on their on-court performance. For example, the Bulls had the highest overall attendance this year despite not reaching the postseason. Therefore, players should not be judged solely by their on-court performance.

[GROSSMAN: Kevin Durant's Golden State decision is a winner for the NBA]

To evaluate both factors, RAR uses regression analysis to determine what percentage of a team’s revenue is generated by its on-court and off-court performances. For on-court performance, RAR uses one of the most common on-court analytics called win shares to determine an individual player’s impact on a team’s ability to win games. According to Basketball-Reference.com, a “win share” is a “way to divvy up credit for a team’s success” to each individual player based on how his offensive and defensive production — essentially his points produced – points allowed — compare to league averages. For off-court performance, we examine a player’s individual revenue contributions via jersey sales, media exposure, social media presence, and fan engagement. We then apply a player’s on-court and off-court impact to his team’s revenue streams to determine his overall value.

The Bulls added $8.6 million in value through the players they signed based on 2015-16 results. Gasol generated the most of the three major players no longer with the Bulls at $31.4 million last season. Rose was second at $23.5 million and Noah was third at $7.8 million. This means that these players contributed a combined total of $62.7 million for the Bulls. In contrast, Wade generated $29.3 million for the Miami Heat, Rajon Rondo generated $22.4 million for the Sacramento Kings and Lopez generated $19.6 million for the Knicks for a total of $71.3 million.

[SHOP: Gear up, Bulls fans!]

We also used RAR to examine how the new and old Bulls should perform next season. What we discovered is that our 2016-17 projections create an even larger gap. Wade, Rondo, and Lopez are projected to generate a combined $104.3 million for the Bulls. Rose, Noah, and Gasol are projected to generate a $63.2 million combined for their respective teams. Part of the increase in value is due to the NBA’s new television deal, however, each team receives an equal share of this revenue. That means the increase in television rights fees does not explain the difference in value. It is Wade and Co.’s ability to generate interest, excitement, and engagement among fans, media, and sponsors that is the primary driver of the Bulls projected revenue success.

The no. 1 priority for the Bulls is to have a winning team. However, the Bulls are also business, and the team’s business does not rely solely on how it performs on the court. The players should also not be solely measured by how they perform on the court. By taking on-court and off-court factors into account, the Bulls maximized the team’s likelihood of business success through offseason moves.

Ross Chumsky also contributed to this story.

Adam is the CEO and Founder of Block Six Analytics. He is also a lecturer for Northwestern University's Masters of Sports Administration and the co-author of The Sports Strategist: Developing Leaders For A High-Performance Industry. Ross is a Partnership Analyst at Block Six Analytics.

The Daily Line: Week 10 Football Picks

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NBC Sports Chicago

The Daily Line: Week 10 Football Picks

By way of introduction, I am Eric Olson. I played football for Northwestern from 2012- 2016, started over 30 games at Right Tackle, got a Master’s in Predictive Analytics and love to look at football through the eyes of a sports bettor. I will be writing up my weekly NFL, and a few college picks here at NBC Sports Chicago. With the legalization of sports betting in a handful of states already, and possibly growing to others soon, there will be a lot of new interest and increased awareness on the sports betting factors around the games this year.  The best pieces of advice I can give you are: #1 Don’t bet what you can’t afford #2 If it feels too good to be true, it probably is. And #3 If it feels ugly when you place it, good. Other than that, let’s have some fun and hopefully have some success along the way.

YTD record: 24-15 against the spread 

Jacksonville Jaguars vs Indianpolis Colts 11/11 12:00pm CT

Line: Colts -3 
Betting Percentages Split: 53% on Jaguars 
The play: Jaguars +3

There is a very simple philosophy in the NFL that simply works when handicapping games. Buy low, sell high. If you blindly bet against teams that had overachieving performances the previous week and bet on teams that underperformed, over time, you will be successful. The NFL is a ‘regress to the mean’ league and the discrepancy amongst teams is much smaller than the public perceives it to be. Well, here we are. Everyone is off the Jaguars bandwagon. I sat here and in my first article of the year I wrote: “I am just not ready to pencil the Jaguars in as the AFC title contenders that everyone seems to think they are for years to come”. Yes, I am happy with myself for calling the regression of the Jaguars. However, the pendulum has shifted too far in the other direction after a myriad of disappointing performances from the Jags. Take a step back for a second, this roster is a 3 POINT UNDERDOG TO THE COLTS. Fade this extreme recency bias and bet that the Jaguars are somewhere in between title contender and bottom feeder. 

New Orleans Saints vs. Cincinnati Bengals 11/11 12:00pm CT

Line: Saints – 6
Betting Percentages Split: 77% of tickets on the Saints
The play: Bengals +6

Alright folks. Listen here. After going 11-1 over a two-week stretch in October, this article has not done well in the last two weeks. That has also coincided with the two of the worst Sunday’s Vegas has had in the last 10 years. Guess what? That trend will not continue. Every year there are about two to three Sundays where the public players win and the house loses. If those are also the first Sunday’s that I lose, I can live with it. Bet with the house and over time you will win money (this article is still over 60% on the year, we’re doing just fine). So here we go again, we are fading the public hard here. The Saints are a very good team, my favorite future I placed before the season was Saints to win the NFC at +700, I really, really liked this roster. However, public perception of this team has never been higher after a string of marquee wins that included the dismantling of the previously unbeatable Rams. So, what do we do? We bet against them. The Bengals are a quietly solid team capable of beating any team in the NFL and getting six points at home, in a noon game following the Saints primetime slot last week is an auto bet from me. Take the Bengals and the points.

Detroit Lions vs. Chicago Bears 11/11 12:00pm CT

Line: Bears -7
Betting Percentages Split: 63% of tickets on the Bears 
The play: Lions +7

Look! Again! Another overreaction to recent results! This line is simply too big for two divisional teams that, realistically (cover your ears Bears fans), are relatively close to one another in terms of talent. The Bears are a very solid team. Nothing more, nothing less. They will find their way to 9 wins. The Lions are about one (maybe ½) notch below that and will find their way to 7 or 8 wins. Can we agree on that? No? Okay, you know I am right and that disparity just does not warrant a 7-point spread. The Lions threw up a stinker against a surging Vikings team and I expect them to move back closer to the mean and play the Bears close. 

Atlanta Falcons vs Cleveland Browns 11/11 12:00pm CT

Line: Falcons -6.5
Betting Percentages Split: 82% tickets on the Falcons 
The play: Browns +6.5

I sat and stared at my computer screen for a very long time just looking at this line. The Browns meet every criteria I look for in a game. They played a game with a deceiving score last week (they played the Chiefs closer than the score indicates). They have less than 20% of the bet tickets. They are an NFL team (yes, I know, ground breaking) catching significant points at home. They are better than their record indicates, swaying public perception. The line has, multiple times throughout the week, shifted against the public bet tickets, indicating that professionals are betting on the Browns. But, it’s the Browns and this bet felt disgusting. Then I remembered, if it feels gross when you place it, good. So, hold your nose, bet the Browns and the points. 

Bonus College Game: Northwestern vs Iowa 11/10 3:30pm CT

Line: Iowa -11
Betting Percentages Split: 69% of tickets on Northwestern 
The play: Northwestern +11

Do I hate that the public is on Northwestern? Yes. Very much so. This line is WAYYYY too big and frankly, that scares me a little. However, I know the guys in that locker room, I know what their mindset was going into the ND game last week (we cared A LOT more about this week) and I know how much we LOVE playing at Kinnick Stadium. Could you play the angle that we only need to win 2 of our last 3 games to go to the Big Ten Championship? Sure, but, if we win this game we all but lock up our spot. If we lose, we still have to win on the road in Minneapolis and then play an Illinois team that would love nothing more than to knock us off. We do not want to leave this up for chance. We finish it this weekend in Iowa City and win outright, take the Cats and the points.  

The Daily Line Podcast: The Bears head into week 10 as 6.5-point favorites

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NBC Sports Chicago

The Daily Line Podcast: The Bears head into week 10 as 6.5-point favorites

The Bears head into Week 10 as 6.5-point favorites against the Lions. Sam Panayotovich of VSIN and Joe Ostrowski of the Early Odds podcast join Paul Aspan and Ryan McGuffey to discuss why that line looks like too many points for the Bears (3:15).

Plus, we look into the future to see how Vegas would handicap an NFC title game between the Bears and the top teams in the NFC, the Rams and the Saints (13:00).

The guys make their weekly picks (16:00) and what are the chances that baseball’s biggest free agent lands in Chicago (27:00)?

Listen to the full episode at this link or in the embedded player below: