Sports / Basketball

Demarcus Cousins and the Power of Unintended Consequences

On February 19, Demarcus Cousins was traded from the Sacramento Kings to the New Orleans Pelicans. Cousins is, by consensus, a top player in the NBA. Indeed, he is one of the most talented scoring centers the game has seen in years. Yet, for a multitude of reasons, the Kings felt obligated to trade him. The team believed that Cousins was destined to leave in free agency and was loathe to let him walk for nothing. But the catalyst for the move might have been a new rule designed to prevent this exact situation from occurring. In a case of perverse incentives and unintended consequences, the NBA’s new Collective Bargaining Agreement (CBA) may have paved the road for Cousins’ departure from Sacramento.

In a way, the story begins in Oklahoma City. For most of this decade, the Oklahoma City Thunder have been the NBA’s worst nightmare. The franchise drafted three of the five best players in the league: Russell Westbrook, Kevin Durant and James Harden. All three are MVP winners or finalists. Each will be named All-NBA this season. And only one of them remains on the team.

Harden was traded in 2012 to avoid the luxury tax. The Thunder saw how expensive their team was becoming, and traded him away to Houston for a song. Durant signed a five-year extension in 2010, but he left for the Golden State Warriors as a free agent in the 2016 offseason. Although the Thunder could have offered Durant another extension, the rules surrounding such deals made refusal a certainty. Under the stipulations of the 2011 CBA, extensions could only give a small raise in salary to the signee. A theoretical extension would have offered Durant nowhere near the $30 million per annum contract available to him as a free agent. The Thunder still had a small advantage in free agency; they were able to offer an extra year and about $2 million more in average annual value. But the difference wasn’t enough to tempt Durant to stay.

The NBA was horrified by the Thunder’s misfortune. It is very much against the NBA’s interest if teams cannot keep their homegrown stars. The reaction was swift and decisive. Indeed, in the CBA from last year, teams received a new tool to help them retain their superstars. The provision, called the Designated Player Extension (DPE), only applies to superstar players, as defined by various performance criteria. For these particular players, teams can offer special five-year extensions with a significantly higher salary than would be available on the open market. Most importantly, these offers can only be made by a player’s current franchise. On the whole, the NBA responded enthusiastically to the rule. No longer, the thinking went, would teams be forced to give up their star players.

The league was sorely mistaken. In the very first instance of the rule’s application, the DPE likely created the exact scenario it was created to thwart—a team forced to part with their franchise player: Demarcus Cousins.

Cousins is something of an enigma. The big man has a fiery temper and consistently leads the league in technical fouls. He is one of the most notorious personalities in all of sports; it is no coincidence that Sacramento has gone through six head coaches since 2012. The Kings organization itself is equally dysfunctional, but Cousins has undeniably played a role in the chaos.

Given Cousins’ mercurial nature, Sacramento’s reluctance to invest heavily in him is understandable. Even under the old rules, a five-year maximum contract would have been costly, but the Kings seemed committed to making the offer. However, Cousins would have demanded the DPE. As a top-15 player in the league, he would have sought out exactly what he deserved—and not a penny less. With the new rules, then, his next contract would have been ludicrously expensive, about $35 million more than the traditional max. It would have been the richest contract in NBA history, about 37 percent larger than the previous record. This exorbitant figure rightfully terrified the Sacramento organization.

Unable to re-sign Cousins, the Kings were left with few options. They could have kept him until the expiration of his contract in 2018, but at that point Cousins would have simply left with the franchise receiving nothing in return. Likely guided by Oklahoma City’s similar experience with Durant, Sacramento desperately sought to avoid that situation. As a result, the fateful trade was made and Cousins, one of the greatest players in Kings history, became a New Orleans Pelican. But if it weren’t for the league’s reaction to the plight of the Thunder, and subsequent creation of the DPE, it is possible that Cousins would still be wearing purple and silver.