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Schröder and Icarus: Lessons from NBA Free Agency

In the last few years, it seems that NBA stars have been increasingly concerned about their legacies. It makes sense: whenever there are discussions about the greatest players in history, such as the debate about who is better between Michael Jordan and Lebron James, people are quick to bring up Jordan’s 6 NBA Championships Rings as the be-all, end
-all argument. This long-term outlook has led some NBA stars to form “superteams” — teams stacked at the top with several superstar players — to better compete for elusive NBA rings. Often, playing on a superteam comes with a cost for the superstar: they might have to player fewer minutes or play a different position/role on the team.

The modern superteam era kicked off when Dwayne Wade convinced both Lebron James and Chris Bosh to join the Miami Heat. They went to the NBA Finals in four straight years, winning two titles in 2012 and 2013. After the Golden State Warriors lost a heart-breaking NBA Finals in 2016, they convinced reigning MVP Kevin Durant to join the team; this type of concentration of power was unheard of, since never before had an MVP joined a team that was already considered one of the best in history. The Warriors won titles in 2017 and 2018 and lost a close NBA Finals in 2019 despite two of their three best players suffering season-ending injuries. There are currently two teams that have the superteam designation: the Los Angeles Lakers in the Western Conference and the Brooklyn Nets in the Eastern Conference.

Know Your Value

I want to say that every NBA player is desperate to join a superteam, but that is not the case. While most of the very top players are concerned about their legacies, other players in the tiers below the superstars have other prerogatives. One such player is Dennis Schröder. During the 2021 season, the Lakers offered Schröder 4 years for 84 million USD (21 million USD per year). Some thought that the offer was too generous given Schröder’s talent level, but the justification is that they wanted a solid point guard to support the Lakers superteam they had assembled. According to reports, Schröder that the offer was not generous enough, and decided to go test the free agency market in hopes of making between 100 and 120 million USD.

Schröder’s rejection of the Lakers’ offer was considered strange at the time, but some people defended the point guard. NBA players must have tremendous self-belief to reach the highest levels of an extremely competitive and unforgiving sport. That said, given the super team context, it did not make much sense. While superstars are taking massive pay cuts to join the Lakers squad, Schröder instead got a little greedy. But even though people know the free agency market is risky, few people expected the free agency period to go so poorly for Schröder. After contracting COVID towards the end of the season, Schröder played poorly during the playoffs, which diminished his value. In the end, it was decimated: Schröder was only able to sign a one-year deal with the Boston Celtics for 5.9 million USD. This one-year deal is 15.1 million USD less than he would have received had he stayed put on his superteam. By flying too close to the sun in sunny Los Angeles, Schröder ended up in Boston.