The question this post may try to answer might seem like a joke. In fact, history later might prove that it is a big joke.
After all, Otis Smith oversaw the second highest payroll in the league and then took the roster apart and built it back up without replacing the talent or production. In essence, he paid the same amount for a team that was undoubtedly worse the last two years. It was something of a folly to watch Orlando's payroll continue to increase while the team's winning percentage continued to drop. Flexibility and versatility were thrown out the window the last few years.
So when this Bloomberg BusinessWeek survey studying the smartest spenders in sports ranked the Magic as the 19th smartest spenders in all of sports and fourth smartest in the NBA. The survey attempted to determine how much a team spent per win and compared that number to the league average. The rankers adjusted the wins number for wins against teams that were above .500 and for playoff wins and championships.
In the last five years, there is no doubt the Magic have had the most successful run in the franchise's history. A blog post about Dwight Howard's recent ad in the Orlando Sentinel reminded me that it was just three years and three months ago that the Magic were in the Finals! Three seasons ago, Orlando put up one of the most incredible 41-game stretches in the league's history (33-8 heading into the Playoffs which started 8-0) and reached the Eastern Conference Finals for a second consecutive year.
Certainly those wins were at a time when the Magic were spending wisely. And that is what makes this ranking extremely deceptive.
The last two seasons Orlando has not spent wisely. It threw millions of dollars at Jason Richardson, Hedo Turkoglu, Quentin Richardson and Chris Duhon -- all players who were on the downsides of their careers and vastly underperformed. Dwight Howard can only save so much -- and he is gone now anyway. Orlando has a lot of work to do to get back to where it once was.
This is a post looking at the past and evaluating in a different way where things fell off.
Quite clearly, Bloomberg BusinessWeek's survey of cost-effectiveness is weighed heavily toward the good four-year run the Magic had from 2008-2011. Mediocre seasons in 2012 and 2007. Right now, the survey has two mediocre season bookending the greatest four-year run in the franchise's 23-year history. So these results are misleading.
Let us try to untangle them a bit more then, attempting to use part of Bloomberg's methodology.
The place to start is a comparison of the averages Bloomberg uses, separating out the Magic's results from the last two years:
|ORL 5-Year||ORL 2-Year||League 5-Year|
|Reg. Season Wins||51.80||48.98||39.40|
|Wins over .500||12.40||17.25||5.37|
When you look at these numbers, the first thing that becomes clear is that the Magic have paid significantly more per win in the last two years. In fact, the team has fallen above the league's average in terms of wins while the team's payroll has climbed. The Magic could not afford to be mediocre with the payroll the team had.
Even if these numbers are not exactly in line with Bloomberg's methodology, the evidence for Orlando in the last two years is pretty damning. The Magic needed to go deep into the Playoffs to justify the spending bing they went on. In 2010, when Orlando first joined the ranks of the big spenders, it certainly did work.
In 2011, the wheels fell off. The payroll ballooned and the production went down. Magic fans saw it coming and that leaves the franchise where it is now.
The Magic certainly will be judging success by a different metric. And you can look at this runaway spending with worse production -- if you look at Basketball-Reference's trade evaluator tool, Orlando traded 25.1 past win shares for 16.2 future win shares, a 35.5 percent decrease while Phoenix saw a modest 5.6 percent increase -- as a key reason why Orlando fell.
Simply put, the Magic were not smart with their money. They built a payroll to win a championship immediately and it nearly worked. But that second year, things fell apart and then a panic trade worked to increase salary while bringing in less productive players. The desire to appease Dwight Howard then made things worse as spending was not cut and production decreased too.
It is not that hard to figure out:
Orlando was not smart with its spending.