The Strange Market for NBA Coaches

Moneybox
A blog about business and economics.
June 13 2013 8:30 AM

The Strange Market for NBA Coaches

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NEW YORK, NY - MAY 7: Jason Kidd played so poorly in this series he had to retire.

Photo by Jeff Zelevansky/Getty Images

The Brooklyn Nets are hiring Jason Kidd as their coach. I love Kidd as a player and he has a great history with the Nets franchise. But it underscores the strange nature of the NBA coaching market. Technical analysis by economists (PDF) has shown that very few NBA coaches are associated with a statistically observable improvement in player performance. That could be because coaching just doesn't matter very much, but it looks to me in many ways like bad management.

After all, even though this analysis involved methods that are pretty far removed from NBA conventional wisdom, it reaches the conclusion that the best NBA coaches in recent history are ... Gregg Popovich and Phil Jackson, which is not exactly an earth-shattering revelation. Along those lines, the Atlanta Hawks recently announced that Mike Budenholzer—Popovich's longtime deputy with the San Antonio Spurs—will be their new coach. That, it seems to me, is roughly how you would expect a labor market to behave. Owners would look at the top coaches' organizations and give opportunities to those coaches' key lieutenants. Probably lots of assistants to great coaches would end up doing poorly, but surely some of them would do well. And indeed New Jersey considered going down this road with their coaching vacancy, giving serious thought to hiring Brian Shaw, who collaborated with Jackson for years. But ultimately they went with Kidd instead.

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And you see this time and again in the NBA. Either teams hire a retread coach who's been a not-particularly-successful head coach in the past, or else they tap a veteran former player who has some kind of ties to the organization. The retread strategy, in particular, makes just about zero sense unless you can hire Jackson. The Hawks, I think, have this right. And it's probably no coincidence that their new general manager is a former member of the Spurs organization as well. But that only pushes the mystery back another level. Everyone thinks the Spurs are the best-managed organization in the league, but lots of teams are failing to hire members of that organization to go work for them.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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