With the Milwaukee Bucks recently claiming their first NBA championship in 50 years, the conversation about small-market success has been reopened. In a season in which many pundits expected to see the Brooklyn Nets square off against the Los Angeles Lakers or Los Angeles Clippers in the NBA Finals, seeing the fourth-smallest television market in the league capture the title begs the question. How can the Charlotte Hornets replicate this success?
In order to properly evaluate NBA market size, an important distinction must be made between television market size and the valuation of the franchises per Forbes. These two are not always synonymous, as evidenced by franchises such as the Atlanta Hawks and the Phoenix Suns. Although the Hawks and Suns rank eighth and 12th in television market size, they are the 24th and 17th most valuable franchises, respectively. Thus, even though they are both big markets with over two million television households, they operate more like small-market franchises.
As the eighth-smallest television market, Charlotte faces the inherent disadvantages of being one of the league’s smaller cities. Professional sports is a business, and as a business, the primary goal is to make as much money as possible. The formula is simple; more people in a city tends to equal more television sets and more money, which in turn presents the most opportunity for the league to profit. This means that the franchises with the highest valuations and market shares are worth more, which leads to more wealthy owners or ownership groups purchasing these franchises. Such owners are not shy about spending money and are willing to pay the luxury tax and exceed the salary cap in order to lure superstars to their teams. Even with the supermax contract in place, many small markets struggle to retain their superstars. With the circumstances as they are, it is imperative that small-market teams make savvy moves in order to put themselves in the best position possible.
While there are multiple strategies for building a team, most often a small-market team blends multiple elements of roster construction in order to achieve success.
The Star
Examples – Cleveland Cavaliers, Milwaukee Bucks, San Antonio Spurs
Admittedly, drafting a star is easier said than done. In Cleveland’s case, it certainly helped that Ohio native LeBron James entered the league in a year in which Cleveland held the No. 1 overall pick. Even with this incredible good fortune, the Cavaliers failed to capitalize and win a championship during James’ first stint with the franchise. In these years, Cleveland operated more like a small-market team, building a roster of their own draft picks such as James and Zydrunas Ilgauskas alongside declining veterans such as Shaquille O’Neal and Antawn Jamison. In James’ second stint in Cleveland, the franchise operated more like a large-market team, with James exercising his clout to recruit other players and with the team acquiring Kevin Love to pair alongside James and Kyrie Irving.
Milwaukee has also benefited from a drafted star, although few could have seen Giannis Antetokounmpo’s rise to stardom when the team first acquired him. Milwaukee operates like a traditional small-market franchise, with their drafted star supported by a roster of savvy acquisitions such as Khris Middleton and Brook Lopez.
Perhaps no franchise is associated with small-market success more than the San Antonio Spurs, who drafted their star in Tim Duncan and surrounded him with excellent draft selections in Tony Parker and Manu Ginobili to form their championship core.
The main distinction to be made between small and large market teams from a star perspective is that large market teams are able to lure their stars in free agency, while small-market teams typically must draft their stars. The roster can be filled out through free agency, but the foundation must be built in the draft.
The Draft
Examples – Oklahoma City Thunder, Utah Jazz, Memphis Grizzlies
Success in the NBA draft is the lifeblood of a franchise, particularly for small-market teams who struggle to attract free agents. There are multiple examples of small-market teams drafting well and forming competitive squads, even if they never reach a championship level. Examples include the Utah Jazz, Indiana Pacers, and the “Grit and Grind” era Memphis Grizzlies. There is perhaps no better example of small-market draft success than the Oklahoma City Thunder, who drafted future league MVPs in three consecutive drafts. Although this draft performance did not parlay into a championship, the Thunder were one of the league’s most competitive teams for a decade and were consistently in contention.
Free Agency
Examples – Atlanta Hawks, Milwaukee Bucks, San Antonio Spurs
In addition to success in the draft, small-market franchises must also be calculated in free agency. The key for any team is to attract talent without putting future flexibility at risk. For a team like Charlotte, acquiring free agents oftentimes requires overpaying, a situation that must be navigated carefully.
As previously mentioned, the Hawks, Bucks, and Spurs have all found success as small-market teams, and all have also done well in free agency. Bogdan Bogdanovic and Danilo Gallinari were solid additions that helped to propel Atlanta’s postseason run, while Brook Lopez did the same for Milwaukee. Even San Antonio, known more for drafting players than signing them, has relied on savvy free-agent pickups such as Bruce Bowen and Robert Horry to lead them on championship runs.
However, the bottom line for small-market franchises remains that their stars typically must be drafted rather than acquired via free agency. Without being able to fall back on free agency to make up for poor drafting, small-market franchises must find success in the draft to find success on the court.
The Superstar Rental
Example – Toronto Raptors
The superstar rental itself is not new, but Toronto is the only franchise that has conveyed it into a championship. Toronto is another franchise that is small-market only in perception; they are both the 10th-largest NBA city by metropolitan population and the 10th-most valuable franchise. However, their location in Canada creates obstacles such as tax rates, weather, and culture that make it difficult to attract free agents and retain draft selections.
As such, Toronto tends to face the same issues that small-market teams. The Raptors are an example of a franchise that drafted incredibly well, built a strong culture, and then struck when the opportunity to acquire a superstar arose. In this unique situation, it was widely known that Kawhi Leonard preferred to be in Los Angeles, but Toronto decided to acquire him knowing that it was potentially only for one season. However, Toronto would never have been in position to acquire Leonard or to compete with him on the roster had they not drafted well up until that point. By having DeMar Derozan, the Raptors had an asset to include in the deal, and by having a solid roster including Pascal Siakam, OG Anunoby, and Fred VanVleet, Toronto capitalized and won a championship in the lone season that Leonard was on the team.
What does this mean for Charlotte?
The NBA is a league that is driven by stars. The only team in recent history to win a championship without a true superstar was the 2004 Detroit Pistons, a gritty team that relied on defense and chemistry to take down the star-studded Los Angeles Lakers. Charlotte appears to have an incumbent star in LaMelo Ball, and some of the other young pieces have star potential. The superstar rental strategy is seldom possible and is not a likely path for Charlotte to take. That leaves the draft, an area where Charlotte has historically struggled. However, recent history suggests that Charlotte is on the upswing in terms of draft success. Since Mitch Kupchak arrived as general manager in 2018, Charlotte’s draft night acquisitions have included Miles Bridges, P.J. Washington, and Ball. With the departures of Cody Zeller and Malik Monk this offseason, there are no players remaining from former general manager Rich Cho’s tenure.
Charlotte must also continue to do well in the free-agent market, balancing competitive aspirations with maintaining financial flexibility. The offseason signings of Ish Smith and Kelly Oubre are a solid start, as they add depth while being on reasonable contracts. Charlotte also did well to obtain a first-round draft pick in the sign-and-trade of Devonte’ Graham, adding a future asset rather than sacrificing future flexibility.
For Charlotte, the cornerstone is in place, and the objective now shifts to making moves in a way that allows the Hornets to be flexible in the long-term while also competing in the short-term. The primary goal should be to continue building a solid culture of winning in order to generate the momentum necessary to continue attracting valuable roster pieces.