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Perfect Matching in the NBA

“Perfect matching” is a phenomena that can be observed in pretty much any system that have identifiable buyers, sellers, and prices, and the National Basketball Association (NBA) is no exception. The NBA consists of teams with varying agendas that all operate under the salary cap (or try to). Some teams are perennial contenders and prioritize winning now while others set their sights towards the future (Link 1). Teams also differ in the types of players they already have. Because of this, teams have different preferences in what they look for in a player. For example, a team with one of the best and durable point guards in the league will not waste their precious cap space to sign another talented point guard, but will allocate their cap space to fill other needs. In comparison, a team with a need in the point guard position could end up paying well above the market value for the same player.

An interesting aspect about the NBA market, however, is that at times the role of buyers and sellers change depending the talent level of the player. In a recent article, Zach Lowe covered the dilemmas that some teams and players have over upcoming contract extension decisions (Link 2&3). Players who are highlighted are those who have shown potential to blossom as an impactful players but also have glaring holes in their games. Each of these players could flourish in some circumstances, but struggle mightily in others because of their imperfect skill sets. Because of this reason, their worth would vary from team to team. For some players, like Eric Bledsoe (Link 4), their worth is defined by not just them but by other players playing the same positions and their respective values. Although most would agree that Bledsoe is a talented player, the running consensus in the NBA is that there are plenty of players playing the same position as Bledsoe who are on cheaper contracts.

However, players who are considered to be the best in the game are treated as buyers, with teams serving the role of commodities. They do not need to concern themselves with their value and finding a team that wants them because any team would do anything to acquire their talents. Although the pool of players that this applies is small, they certainly exist and can change the entire balance of the league. Recently, LeBron James, considered to be the best player in the league, moved from the Miami Heat to the Cleveland Cavaliers. Although the Heat have advanced to three straight finals, most have crossed them off as contenders while the Cavailers, who couldn’t even make the playoffs last season, are now labeled as contenders. These rare players can evaluate teams based on several things. Does the team provide a good supporting cast to contend for a title? Is the team in a big city (New York, Los Angeles) with a huge market? Is the situation right for their family? Can the team offer a good amount of money? Will they be able to be “the man” in their potential destination? In the past couple of years, we have seen players such as LeBron James (2010 and 2014) and Dwight Howard (2013)  meet with teams to have them market themselves as a potential destination and address these types of questions to make their decision-making process easier (Links 4, 5& 6). For a league that has had criticism regarding the distribution of talent among teams, these irregular yet influential role reversals of buyers and sellers seems to be the core of the problem.


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September 2014