What Could the Pelicans be Waiting for with Dell Demps?

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Published: May 6, 2016

The Pelicans caught some flack last week when reports surfaced that the team supported and would retain general manager Dell Demps. They caught even more flack when they seemed to backtrack this alleged commitment by canceling his end of season press conference without explanation. Of course, the cancellation could have been over nothing, but why not just tell us what the reason? Assuming it was nothing personal related to Dell or his family, which we don’t deserve to know about, simply spilling the beans on why they cancelled the press conference may have improved the optics of the situation.

Suppose, we did get an honest answer about Dell’s future, and suppose, Mr. Benson or Mr. Loomis said, “We aren’t sure yet. We are going to wait until we have all the relevant information before making a final decision.” The outrage among the vocal portion of the fanbase would be enormous, but would that rage be justified? As always, it depends, but here’s a valid justification for the wait and see approach.

The core issue here is information. Basic economics and decision theory, tells us that in a situation where information is imperfect, incomplete, or asymmetric, more information is preferred to less. In other words, if we don’t already know everything, then we’d like to know as much as we possibly can before making a choice. For example, imagine you’re at a restaurant and you’re deciding between a steak and chicken entree. Let’s say your indifferent between the two dishes, and then your friend tells you that the chef is world famous for his ability to prepare and cook a steak. Before this piece of information, you were indifferent. Now, wouldn’t it seem reasonable to switch your preference to the steak entree given this new information? In short, one piece of new information turned your preferences from indifferent to strictly preferring the steak over the chicken.

In statistics and logic, this is inference and updating. Basically, you had a prior belief (i.e. the two meals were of similar quality to you), which was updated when you were given legitimate and relevant information (i.e. the steak will be more expertly prepared).

But what does this have to do with the Pelicans? After all, if the issue is information, don’t the Pelicans have a statistically or reasonably significant amount? The Hornets hired Dell Demps in 2010. That’s six seasons worth of data. What could possibly be left to learn about Mr. Demps? Well, nothing. The real unknown, significant variable, in my opinion, is the Pelicans 2016 1st round pick.

Right now, the most likely value of that pick is 6th overall. If it falls in that area, I think the Pelicans are likely to trade the pick for whatever they can get. In that case, we aren’t bringing back a ton of value, and it isn’t really exciting. But given the probabilistic nature of the NBA lottery system, it is possible that the Pelicans end up with a top three draft pick. In the case it is the 1st or 2nd overall pick, the Pelicans are likely to select Brandon Ingram or Ben Simmons.

Think about how that would change the perception of the franchise. Instead of being a team with injury issues, poor roster construction, and whatever else, the Pelicans are now pairing Anthony Davis with another young potential superstar. Stop thinking about this as a fan, though. Consider you’re a potential replacement for Dell. Imagine your interest in the open Pelicans job if the pick was at 6. Now, imagine your interest if it was 1st or 2nd. It’s a completely different scenario right?

Now, I do want to say that the outcome of the pick might not actually have all that much to do with Dell. Perhaps, it is a money saving issue. That is, the Pelicans don’t want to go out, hire, and pay a new GM when the team’s ceiling is just as low as it was before the lottery. It could also be that you hire different managers for different situations. Maybe ownership feels that Dell is well equipped to run a franchise filled with young, potential-filled superstars, but he isn’t the guy you want pushing your team to the next step.

At any rate, let’s say that management has this mindset. Then, they know that their potential hiring pool, and likely the enthusiasm of those potential hires, is very different given the outcome of the lottery. So why not wait until after the lottery before making a final decision at least on hiring, if not firing? Doesn’t that make the most sense? Gather all the relevant information possible about your assets and decision makers before making any final employment decision.

Well, it does make sense, but that doesn’t mean a counter argument doesn’t exist. Obviously, one could argue that the PR damage done by waiting is far greater than the small gain in information and possibly an unlikely outcome. I think that is actually a reasonable and rational argument, but I’m also pretty sure, based off recent history and all available data, that the team really doesn’t care what you think about them. There is plenty to criticize about the Saints and Pelicans organizations, but you cannot say that they let the opinions of outsiders and fans affect them too much, unless it affects the bottom line.

The real counterargument to me is that potential GMs replacements probably aren’t likely to switch teams that late in the off season, anyway. Of course, someone on the sideline can wait a bit longer for the exact same reason: information.

There isn’t exactly a long history of these types of moves, and there is probably a reason for it. Perhaps, it suggests institutional instability, or new hires are less enthused to work for an employer who fired their predecessor in such a callous way. Maybe, short and sweet, the math just doesn’t work. The benefits ultimately don’t outweigh the costs.

Still, there is a point to learn from this type of thinking: more information is preferred to less. Why are the Pelicans seemingly waiting on Dell Demps? If they are, it might have something to do with information. Maybe it is the information that would come from interviewing a potential replacement, who was previously unavailable. It could be that some new information, like a vote of no confidence from team members or whomever, came to the ownership attention. Perhaps, they are even waiting on some information about a potential trade or signing, so that the next time we see Dell he is standing next to a new, shiny Pelican.

We don’t really know. In fact, we don’t really know that much about the situation at all. The team and the individuals involved know much more. They know the relevant variables to the equation. They know the values of those variables, and the know what variables are still undetermined. We don’t know most of those things. Funny enough, they actually know what we don’t know.

That’s called information asymmetry. That’s when one group or person knows more than another. The classic examples are car dealers and medical doctors. You go to them to buy services or goods, but they inherently know more than you about those goods and services. Information asymmetry is usually used to explain transactions or gambling, but it can be applied here. It is always hard for fans and analysts to judge the decision making of NBA teams, because they hold so many of the cards. It doesn’t make for sexy tweets, but we, collectively, don’t know that much.

So what is there to left to do? We can and do use the best available information, but sometimes the best information isn’t good information. Sometimes the odds point to heads and tails comes up. Sometimes things change, perhaps with the recent court cases. If we can’t confidently jump to conclusions and judge the team’s decision making with this new hire, then how should we spend our time and energy? Well, we could follow the Pelicans example and just wait and see.

 

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