Monday, July 6, 2009

Don't Wanna See No Blood

I am keen to convince the world that this is not an Orlando Magic blog, so let us today look at a different part of Florida. Dwyane Wade told the Associated Press today that he will re-sign with Miami next summer only if his team is poised to be a championship contender. As the article notes, the roster boasts little after Wade; 2008-09 rookies Chalmers and Beasley might make big strides in the coming season, but perhaps not. Jermaine O'Neal will be a free agent next summer, and is old and slow anyway. The glut of unrestricted free agents next summer will create an intensely complicated negotiating environment. Dwyane Wade would stay with Miami if his team could sign a good free agent from the pool of James/Bosh/Stoudemire/Nowitzki/J.Johnson/McGrady/Nash, but he would sign elsewhere (possibly with the existing team of one of those aforementioned guys) if Miami management cannot lure another star. Each of those other seven guys probably has precisely the same viewpoint as Wade.

Thus, each player's decision will hinge on what the other players in that pool do; and each team's strategy will be a frenzied effort to strike first before the competition strikes you. The general manager of, say, Dallas might promise Dwyane Wade that Wade can win championships playing with Dirk Nowitzki -- but meanwhile, Dirk Nowitzki might be negotiating to sign with the Bulls. Chris Bosh might explore signing with Cleveland to play alongside LeBron, but Bosh would be dismayed if LeBron were simultaneously talking turkey with New York. This dynamic lends itself to collusion and "side deals" whereby two players informally agree to form an alliance and collectively choose one team to play on. However, as we saw in the summer of 2008 with Baron Davis and Elton Brand, those alliances are often not credible; a player might defect from such a deal for economic or more mercurial reasons. The non-public and non-legal nature of such an agreement makes it easier to breach.

We could add to this analysis that teams who currently hold the rights to James, Wade, Bosh, etc. have an ability to trade such a player in the next 12 months if such team believes that the player will leave as a free agent. However, this is probably a bad strategy; there are very few players who give you a chance to win championships, and a team should do everything possible to retain such a player, even at the risk of a catastrophic outcome (losing the player for nothing). Other than the 2004 Detroit Pistons, every NBA champion boasts at least one Hall of Famer, and usually two. Consider the Minnesota Timberwolves, who traded Kevin Garnett for Al Jefferson and some low-value draft picks; two years later, they have virtually no hope of making the playoffs in the coming season, and probably not the season after that.

There is probably a more rigorous game-theoretic model to describe and analyze the scenario outlined above. I would appreciate any additional thoughts in the comments.

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