Giannis Is The Best Player, Lebron Is The Most Valuable Player
BY ADAM GROSSMAN
The NBA All-Star game is typically a time when the media, fans, and sponsors start debating in earnest about the league’s Most Valuable Player (MVP). However, the MVP award is arguably one of biggest misnomers in sports in general and the NBA specifically. For example, Block Six Analytics' (B6A) Revenue Above Replacement Model (RAR) has found that Milwaukee Bucks forward Giannis Antetokounmpo is the NBA’s best player and Los Angeles Lakers forward LeBron James is the NBA’s MVP.
Why is MVP a misnomer? The MVP award is typically thought of as the best player in the league. Yet, sports teams are businesses and businesses typically have maximizing revenues as a top strategic goal. B6A’s research has found that both on-court and off-court factors have a statistically significant relationship to revenue. From an economic perspective, teams should be valuing employees (such as players) in large part on their wholistic ability to generate revenue.
Therefore, our RAR model was created to determine the MVP from both an on-court and off-court perspective. This means answering the following questions:
On-court – what is a player’s impact on winning and what is winning’s impact on revenue
Off-court – what is a player’s star power and what is star power’s impact on revenue?
RAR is built upon multiple regression analyses to determine the factors that drive winning and star power. For winning, shooting, offensive rebounding, assists, usage rates, and defensive plus / minus were determined to have a statistically significant impact on NBA teams on-court performances. The aggregation of these factors was used to determine how many wins a player generates for his team in a proprietary metric called B6A Wins. For star power, jersey sales, social media conversation, and media mentions were found to have statistically significant impact on NBA teams off-court performances.
B6A Wins and star power metrics were then multiplied by the weights (coefficients) in our RAR model to determine how much each player’s impact on his team revenues. The weights come from our past regression analyses across multiple teams and players that determined the relative impact of on-court and off-court factors on revenue.
To demonstrate why teams should not focus solely on on-court performance when determining value, B6A created a team with the five players with the highest B6A Wins total by position year to date (YTD). YTD means on-court and off-court performance through February 11th. In addition, our team was selected to have a composition of a typical NBA five-man, starting roster.
As the table above shows, the best player is not the most valuable player. Giannis is having the best season to date by a substantial margin. However, James is the player that drives the most revenue to his team by a substantial margin. While James is having a terrific on-court season, it is lowest of the players on this team. The reason for James’s success is that he has the highest individual value for every factor that drives star power (i.e. he has the highest jersey, social, and media values). Three out of the five players on the team also have off-court values are greater than on-court values.
The converse to James is Rudy Gobert. While he is having the second best on court season YTD by a substantial margin, Gobert currently has the lowest off-court value by a substantial margin. The reason for his relatively poor RAR performance is that Gobert has the lowest values of any player on this team for every star power factor by a significant margin.
YTD RAR results may not be a perfect reflection of a full season’s performance. For example, James had by far the most social media traffic and media mentions of anyone in this analysis. That is likely due in part to the attention James received after the tragic death of former Lakers guard Kobe Bryant. While James is typically one of the highest performers on these off-court metrics every season, his off-court value may have lower trajectory going forward than it has had YTD given the unusual circumstances.
However, the main takeaway is that RAR builds on core concepts that come from B6A’s approach to asset valuation focused on revenue generation whether it comes to players, partnerships, or influencers. More specifically, it is critical to determine all factors that drive revenue growth to fully understand the value of an asset for a specific team, league, or company. Taking a wholistic approach, rather than focusing on one factor such as on-court performance, is a better way to determine value.