Wednesday, January 4, 2017

Short-termism is inefficient

The Knicks basketball team have only a three-year contract with their best young player.  As a result, they have less incentive to worry about his long-term viability, and have increased his playing time from 28 min/game to 35 min/game.  Somewhat predictably, Kristaps Porzingis got injured.
“He’s just turned 21,’’ said the NBA scout, who has worked for multiple teams. “They’re draining Kristaps, putting more minutes on him than anyone. Physically he grew in the offseason. It’s a tremendous amount of strain on new material — ligaments, tendons, knee joints for a big guy. It’s unbelievable stress on his body.’’
There seems to be an unconsummated wealth-creating transaction here: if the parties signed a longer-term contract, the team would potntially benefit from any additional longevity (they would reap the rewards from investing in his future), which could make the team, and the player, both better off.

HT:  Marginal Revolution


  1. According to the article this young 21 year old basketball star namely Kristaps Porzingis who is being pressured by his team. He is considered a star player however, his team the Knicks are overusing him instead of letting him grow as a successful player. They believe that a guy with his height has a lot of strain on him like “ligaments, tendons, and knee joints”. Marc Berman believes that he is overworked by playing extra minutes per game. They should look to preserve him and let him grow into the star he is supposed to be, they are pressuring him.
    According to the author, the team believes that he is not going to last long. I believe that he was drafted/ picked to make the team win, he needs to play more. The more he plays, the more jerseys he get, the more endorsement and the bigger the contract.According to the author, the team believes that he is not going to last long. I believe that he was drafted/ picked to make the team win, he needs to play more. The more he plays, the more jerseys he get, the more endorsement and the bigger the contract.

    1. It doesn’t seem that the term of the contract is a direct relation to the amount of playing time for basketball players. Let’s look at the top two Knicks players and their minutes played per game:
      Carmello Anthony, 34.0
      Kristaps Porzingis, 33.1
      Knicks players Stats 2016-2017 per game
      Knicks players Stats 2016-2017 Totals
      Anthony has played at a top level with the Knicks for 7 seasons at a high level. Each year he has played an average of more minutes than Porzingis. Anthony is 32 years old and currently in a 5 year / $124,064,681 contract. (
      Carmello Anthony NBA Statistics
      Porzingis was a rookie when he signed with the Knicks in the 2015 season. Kristaps Porzingis signed a 2 year / $12,953,040 contract initially. (

      If I were to analyze the value of these two players for the 2016-2017 season, I see that Anthony got paid a base salary of $24,559,380 and Porzingis got a base salary of $4,317,720. Yet, their MPG was not even a minute apart. Either way, wealth is created for the players and the franchise.
      I disagree that because Porzingis is 21 years old that the team is wearing him out. When Anthony was 21, he played 36.8 MPG and has constantly played over 30 minutes per game his career. Carmello Anthony NBA Statistics
      You can’t determine the future value of a player and predict an outcome based upon wear and tear, every individual is unique. There could be injury and many other factors, but the Knicks as a franchise have a duty to play their best guys and win. It’s a business and they are not in it to lose or play safe. The players understand the risks and the great reward in terms of financial gain.

  2. Because the 21 year old player had only signed a contract with the Knicks for three years, the Knicks have decided to play him harder than they would a player with a longer contract. Kristaps Prozingis is their best player on the team therefore they will work him harder knowing his stay is only three years. By putting more minutes on him they are potentially putting him at risk of injuring himselves, but the team doesn't seem to care because they want him to excel the team in his three years on the team. They gave him this incentive to motivate him to perform at his best helping the team to up its rank. Although Porzingis is being played more than most, he is helping the team win as well as showing his performance off to receive contracts from other teams, or with his own. It is apparent that the coaches don't care about their player or his long term career as a basketball player. They are more worried about their team rank and the revenue the best player on the team will bring in by being in the game more. The coaches could have easily used the approach marginal analysis in making their decision. Analyzing the benefits and costs of different alternative they found signing Porzingis for a three year contract would keep their cost low and benefit themselves by having the best player they could and cutting ties with him once the contact ended leaving him a tired overworked played.