Category: World Events

  • NBA Tanking Rears Its Head

    NBA Tanking Rears Its Head

    Tanking in the NBA is once again aggravating basketball fans around the world thanks to the Jazz and Wizards throwing games before the All-Star game. This topic has been hashed out time and time again, with many proposals being regurgitated and re-discussed for a new generation of NBA fans. These include the Draft Wheel, draft lottery elimination, as well as other wacky ideas such as an NBA Conclave

    The root cause of teams purposefully losing games is that the on-court outcome of each game directly affects the ability of teams to draft rookie players before other teams. This is not new to sports fans – in the current system, the three worst NBA teams evenly split a 42% chance at the first shot at picking from the rookie class. The three worst teams each have a 53% chance of a top-five pick, and in fact, the three worst teams in the league will have the top three picks more than half the time. The below chart shows the breakdown of lottery odds, by pick and by team. 

    Zach Lowe put it best when he wrote in the Wheel draft proposal: “Nearly the entire history of the NBA suggests that a team wishing to win the title must have one of the 10 or 15 best players alive — and preferably one of the half-dozen best”. This has remained true in the twelve years since that article was posted, and remains one of the clearest indicators that linking team record to draft order will keep tanking as part of an NBA fans vocabulary as long as the link exists. 

    There are other reasons to lose games on purpose. Rookie contracts are more valuable than max-contracts (dollar per unit of performance). This exacerbates the incentive to tank because the apron system for team cap sheets is highly restrictive. 

    A 1st overall pick’s salary will not exceed 7% of the salary cap in their 3rd year in the league. Even in the 5th and final year of a rookie contract cannot exceed 11% of the salary cap. Taking into account that most teams operate above the nominal salary cap every year reduces even further the rookie contract’s percentage of a team’s total cap sheet. 

    This contract ceiling can be far lower than a young player’s true worth. For example, Lebron in his 5th year in the league was already averaging 30 points a game, with the 6th best PER of his career. A non-lottery pick, Giannis Antetokounmpo was averaging almost 27 points per game in the last year of his rookie deal. 

    Rookies generally approach their career averages by the 4th and 5th year of their rookie contracts at a cost ceiling that can’t be matched in free agency. More than 120 players in today’s league command NBA contracts greater than the max possible value of a rookie deal, including Dillon Brooks, Kevin Huerter, and Josh Hart. NBA players are more-or-less who they are by the last few years of their rookie contract, but always make much more money as free agents. When this is the case, the chance at adding transformational stars, or just All-Star caliber players while at a discount provides a strong incentive to maximize chances at high draft picks. 

    In my opinion, flattening the difference between rookie and free agency contracts best reduces the incentive to tank while also minimizing changes to the fan’s experience of the game. This article about abolishing the draft was my original motivation to write this piece, and is one way to approach the equalization of contract value AND remove tanking incentives. 

    The draft is just one way an NBA team can improve its roster, some others being trades, free agent signings, and waiver pickups. Under the current CBA, trades are generally hard to make. This is because the league has a soft salary cap, and a roster that costs more than this cap penalizes the team by placing restrictions on trade options and free agency signings. As I mentioned above, most teams spend their seasons above the salary cap, so options become quite limited in terms of mid-season trades and acquisitions. 

    Teams in smaller cities, such as the Pacers or Cavaliers, do not believe they can attract high-end talent purely in free agency, since there’s a perception that NBA players would prefer to live in big cities such as NYC or LA. Because the talent level of the league is very high, a team needs a strong roster from top to bottom in order to compete for a championship. 

    If having just one star could be sufficient to compete for a championship, then it could be easier for small market teams to navigate the trade, free agency, and draft space to build a championship-caliber team. However, If we accept the premise that free agents are less likely to sign in small markets, this problem is compounded if the task of free agency signings must be repeated several times in order to build a competitive team.

    Eliminating the CBA/apron system while also decreasing max contract salaries (as a percentage of the cap) would allow for smaller market teams to more effectively use the trade market to build championship teams. Teams with one star would be less constrained by the star’s salary in making additional personnel signings, and a compressed salary distribution would also make matching salaries in a trade easier to manage for a team’s front office as well. 

    While this would limit the maximum pay of NBA superstars,  the NBA and player association could agree to reserve some portion of basketball revenue for players who achieve certain accolades (such as all-NBA selections, MVPs). This allows the NBA to reduce the max contract a team can offer while allowing a player like Giannis to keep a similar salary while remaining in Milwaukee, while ALSO giving the Bucks the chance to compete for more competitive contracts. 

    While there might be a few teams fielding sub-par rosters in February and March, there are enough competitive games night to night to keep any NBA junkie happy. In my eyes, the larger risk for the NBA is (as always) money outside the scope of league rules. The Aspiration scandal illustrates that owners as wealthy as Steve Ballmer can find ways to achieve their team goals without regard for league rules. Similarly, the gambling allegations facing Chauncey Billups and Terry Rozier (and subsequent shoulder shrug by NBA players) presents an even larger threat to the competitiveness of NBA games. Issues like tanking are truly small potatoes if we can’t trust that NBA teams operate on an even playing field with integrity. In that vein, it feels that basketball fans are being distracted by the issue du jour, and forgetting to focus on the longer term pathologies that threaten the NBA’s health.

  • ICE and Minneapolis

    ICE and Minneapolis

    Productive civic engagement has been on my mind for many years now – what does it mean to be civically engaged? What are effective, ethical methods of amplifying our opinions? How can we move society in directions that align with our idea of “right”? There are of course some obvious mechanisms of engagement: voting is important but a vote is not multiplicative. One vote is only one voice in an ocean of voices. Protest is essential but is difficult to sustain over long periods of time. There have been a few ideas churning in my brain for the last few months. My original intent was to incubate them longer and  turn each idea into a full piece as part of a mini-series.

    However, the murders of Alex Pretti and Renee Good (amongst others) by federal agents have shaken me deeply. Sitting in my apartment alone, so far away from the chaos in Minneapolis, I feel impotent and helpless, as do many many others! I’m not under any illusions that thoughts on a page will provide either consolation or a path to action, but this is one of my ways of processing grief and anger. Here are a few pathways to more effective civic engagement that have been on my mind recently.

    Increased Local Police/Community Cooperation: 

    Back in 2020, the divide between the Minneapolis populace and its police was starkly laid to national view with the killing of George Floyd. Historically speaking, law enforcement has been viewed by many policed communities as extortive, punitive, whose raison d’etre is to inculcate an atmosphere of fear and compliance within the community. This reputation has obviously been earned, as there are many many studies documenting the increased militarization of police forces over time, excessive uses of force, an attitude of “us v. them”, a lack of internal accountability. Generally speaking, the culture of police forces around the country seems to have shifted over time from protecting/serving others to protecting/serving themselves. 

    Given the antagonistic nature ICE and CBP have taken towards the residents of Minneapolis, there seems to be an opportunity to build some trust between the residents and the police force. One of the community-relations problems in recent years between cops and communities has been the lack of local representation in the police force. However, it’s certainly true that the police force in Minneapolis is more local than federal agents sent in to cause chaos. Off-duty police have been profiled and accosted by ICE agents, and there is a direct conflict of interest between ICE’s actions and the stated mission of police departments: “We in the Minneapolis Police Department gain our authority from the community. We recognize that public safety is not just the absence of crime but the presence of justice.”

    Clearly standing as a deterrent and defusor of tension between antagonistic forces and protesters is part of the police force’s mission. Could this form the basis for future policing in Minneapolis? Are there enough existing liaisons between the police and local community organizers that could facilitate new frameworks for police/community cooperation? 

    Activating Weak Social Ties: 

    I fear that many of those relationships, those which could have connected disparate groups in common cause, have eroded over the years. Over the past 15 years, and especially after the 2016 election, I witnessed the withdrawal of many friends into smaller social spheres. This has been the culmination of many decades worth of cynical inflammation of political tensions by right-wing media and politicians, and is one of innumerable sins that Trump, Murdoch, and McConnell (amongst others) will never answer for. 

    I definitely understand the urge to shed social ties that damage our mental and emotional well-being, but I say that as a person who genuinely enjoys having many far-flung casual friendships. To be fair, my personal tendency to try and maintain social connections probably comes from a resource hoarding mentality: isn’t it possible that anyone from our past can play an important role in our future?

    Spending some time in Hong Kong has been very helpful in illustrating concrete ways that weak social connections can be enlisted in service of effective civic engagement. Specifically, the massive community response to help those affected by the building fires in Tai Po showed me that it’s possible to mobilize individuals effectively and sustainably for specific goals. 

    The level of community support in the aftermath of the Tai Po fires has been so noteworthy it’s made international news. A short and incomplete list of this support includes: Banks offering financial support, temporary housing being made available for every affected unit, schools sharing resources and offering trauma-focused therapy, fundraisers being held, legal aid.

    How do such mechanisms come to be? 

    The government and corporate institutions played a large role in aiding fire victims, and I am planning to write more about that in the future. The mechanism that has been on my mind, however, is weak social ties between individuals, and by extension, organizations. 

    Volunteering for a few organizations after the Tai Po fires has shown me the diverse background of folks making time to help. Additionally, many of these people had heard of volunteer opportunities through different media, some through family, others on Whatsapp or TikTok, still others through their companies. The charity or organization is able to rely on folks with enough of a network to fulfill their logistical needs. While the technologies used in deploying this network varies, the main mechanism itself is weak positive social links (acquaintances). Folks who are involved in several organizations are able to link to these organizations and enable them to work in coordination to achieve their goals.

    What makes these mechanisms durable? The weakness of a social connection, paradoxically, seems like it may play an important role in our ability to activate it over time. This might be because the connections are not strong enough to be associated with polarizing emotions. Additionally, because we don’t often call on our weak social links for aid, I’d imagine there’s more of a willingness from people to engage when asked, since we don’t expect our casual friends to ask for help unless it’s a really big deal.

    What makes these mechanisms effective? I think the decentralized nature of weak social connections also allow them to reach further than centralized means of soliciting engagement. It might mean that social pressure to provide support  comes from many directions. The decentralized nature could also make it harder for outside forces to politicize engagement, or might provide some inoculation against the spread of misinformation. 

    How do these mechanisms provide for a healthy society? Do folks who engage with their acquaintances or distant family feel a stronger connection to their neighbors and community? Or do people living in a healthy, well socialized community just have more social links in general? I really am not in any position to argue correlation or causation here. At the end of the day, our willingness to participate in social connection demonstrates our inherent belief in the usefulness of those connections. Likewise, our willingness to participate in government implies our belief in the utility of that involvement, as well as our investment in its success. 

    If our goal is to have rich, fulfilling lives while making a positive impact in the world for the future, isn’t participation what life requires of us? Does not our desire for agency demand remit by way of engagement?  We can choose to participate when our environment and surroundings are frustrating, deeply disappointing, and even tragic – this is what brings meaning to the world around us. The protests and aid in Minneapolis are a clear example of participation in action and reflect the true heroism in Minnesotans this winter. 

  • SpaceX IPO Why?

    SpaceX IPO Why?

    Ashlee Vance’s biography of Elon Musk shows that Elon has always had strains of megalomania. My time at SpaceX began during a season where that character trait was already defining him. The Christmas party that year, which featured a chocolate fountain, an indoor train, and ceiling-suspended acrobats, was over the top, the subject of water cooler chatter for weeks, and seemed emblematic of Elon’s “work hard, play hard” mentality. This era of SpaceX was also characterized by Elon’s detailed involvement in the company’s goings-on. This remained the case for years, even after his wealth skyrocketed with Tesla’s success and his celebrity ballooned to stratospheric heights. There was an understanding at the company that SpaceX was Elon’s raison d’être, that more than anything, Elon Musk about humanity’s ability to access Mars reliably and regularly. 

    I mention all this because SpaceX has indicated that it will seek to go public over the next 18 months. This news has been met by many with bemusement; why would Elon want to expose his crown jewel to the whims of public investors? Why would he want to allow the incentive structure of the company to change in a way that doesn’t align with his stated civilizational goals? Won’t the distractions of being a public company throw a lot of sand in the gears that allow SpaceX to tolerate failure and achieve new heights? Historically, Elon has exercised a lot of control over the projects that matter most to him, and this move by SpaceX may portend a relinquishing of that control. 

    Of course, SpaceX’s leadership is not made up solely by Elon. The top brass has likely swelled significantly in recent years, but the old guard of Shotwell, Bjelde, Juncosa, and Johnson (amongst others) has capably led SpaceX over the two+ decades of its existence. While the company’s success is owed in large part to their efforts, there are costs to having unchanging leadership over such a long period of time. These individuals almost certainly have net worths reaching into the billions. While they surely gain a lot of personal satisfaction and validation by pouring their lives into the SpaceX project, I can’t imagine they want to be doing this forever. 

    I’ve watched many startups follow a similar funding pattern. Founders are able to raise money in early series funds, cash out a fair amount during growth years, then bail on the company when the projects don’t reach fruition, and finally start raising money for new ventures. While this works out just fine for those visionaries, this scheme also prevents rank-and-file workers from sharing in the liquidity and equity gains promised as part of their compensation packages. SpaceX has always been an exception to this rule – engineers (and to a lesser extent, technicians) have always felt like they could share in the financial prosperity of SpaceX. However, this continued benefit relies on proper stewardship of the company’s long term growth and financial situation. Allowing the public market to price the value of SpaceX’s equity feels like leadership has decided it’s time they reap the astronomical rewards of their long-time service to the company at the expense of newer employees who believed in the prospects of their long-term equity. 

    I quit SpaceX because Elon fired employees who accused him publicly over his enabling of an abusive and toxic culture at SpaceX. I don’t fault Elon for enforcing his vision of a proper company culture. There was an open letter published at the time identifying Elon as the primary driver for the company’s culture: 

    “Elon is seen as the face of SpaceX—every Tweet that Elon sends is a de facto public statement by the company. It is critical to make clear to our teams and to our potential talent pool that his messaging does not reflect our work, our mission, or our values.”

    This open letter made clear that SpaceX’s long term success depended on subjugating Elon to SpaceX’s mission, demanding that leadership “Publicly address and condemn Elon’s harmful Twitter behavior” adding that “SpaceX must swiftly and explicitly separate itself from Elon’s personal brand.

    At that time, SpaceX’s valuation was around $130 billion and Elon was seen by leadership as a large source of that valuation (and the source of future growth). In subsequent years, the SpaceX valuation has ballooned to $800 billion, which in some sense validates leadership’s decision to fire rank-and-file employees rather than rein in their CEO. However, as Elon has grown in scale, the risk to the company’s ability to achieve its goals has grown in kind. Taking SpaceX public is one consequence of that risk manifest, in terms of the deleterious effect it may have on the company’s ability and willingness to take on its long term goals. 

    Something I learned from my time at SpaceX: A company is a reflection of its leadership. SpaceX making moves to go public is indicative of Elon himself being a different creature than when I first joined in 2015. While I cannot speak with authority on who he is now, how exactly he has changed, it seems plausible to me that the cloak of intangibility conferred by his obscene wealth has warped his sense of self, sense of the possible, and sense of accountability. This can be seen in the myriad of distractions that have snagged Elon’s attention over the last few years: Thai cave rescues, Twitter, DOGE, LLMs. These incidents all reflect Elon’s ill-advised attempts to exert his agency on the world around him, based on his belief that he can achieve impossible goals. It seems to me that he has forgotten the investment and sustained focus that went into SpaceX’s success with him at the helm.

    Stated reasons for AI projects aside, taking the company public, at its core, feels like a move by Elon to inflate his own sense of self, reminiscent of the  “Number Go Up” crypto boom. Is this worth the price of SpaceX losing its own identity? If his net worth can crack the 1 trillion mark, maybe such questions just don’t matter anymore.