Jokic Is The Best Player, James Is The Most Valuable Player
BY ADAM GROSSMAN
The NBA All-Star game player selection announcements are typically the times when the media, fans, and sponsors start debating in earnest about who is the league’s Most Valuable Player (MVP). The MVP award recipient 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. Block Six Analytics' (B6A’s) Influencer Analysis Platform (IAP) has found that Denver Nuggets center Nikola Jokić is the NBA’s best player and Los Angeles Lakers forward LeBron James is the NBA’s most valuable player for the 2020-21 season to date.
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 based on their holistic ability to generate revenue.
Therefore, IAP was created in part 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?
IAP is built upon the use of 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 are then multiplied by the weights (coefficients) in our IAP model to determine how much each player impacts his team’s revenues.
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 23rd. 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. Jokić is having the best season to date, however, James is the player that drives the most revenue to his team. The reason for James’ 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). While James’ off-court value exceeds his on-court value, every player in our top-five has generated millions of dollars in off-court value for their teams.
YTD IAP 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 carryover from the Lakers winning the NBA Championship last season and accelerated start to this season. 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 caused by COVID-19.
However, the main takeaway is that IAP builds on core concepts that come from B6A’s approach to asset valuation focused on revenue generation whether it comes from players or partnerships. 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 holistic approach, rather than focusing on one factor such as on-court performance, is typically a better way to determine value.