Nate Silver argues that the Knicks’ signing of Carmelo Anthony is bad on several levels:
1) NBA teams win because they pay good (or even great) players less than they’re worth. Like the Oakland A’s in baseball, moneyball wins (especially in the NBA with a salary cap). So, the Knicks (in Silver’s opinion) have screwed themselves in two ways:
a) They’re front-loading Melo’s abilities, imagining that he’ll produce at All-Star levels until he’s 34 years old. Dangerous proposition. Unlike MLB (with a designated hitter), older players die off faster in the NBA. [Exhibit A is Kobe Bryant, 2 years ago he was arguably the best player in the NBA. In the last 2 years he’s played 20 games and the future is not bright.]
b) By paying Melo the max, the Knicks are severely limiting their money options in the upcoming free-agent summers. They are not going to “have options” (as Nassim Taleb would say) and thus they’ll be very fragile in the 2015 & 2016 summers (when good or even great complimentary players will be available).
2) Perhaps most critically, the Knicks are putting all their eggs in a good (All-Star level) but not great (nowhere near Lebron James level) player. Carmelo is a very good player, but contrast

• Cleveland (with Lebron as the centerpiece and lots of salary flexibility) and
• NY (Carmelo as the centerpiece and very limited $$ flexibility).

Can either NY or Cleveland win the 63+ games to be a real NBA title contender? [Yes I’m ignoring how crappy the Eastern conference is, most teams with either Lebron or Melo can win that pathetic side. Beating the team from the Wicked West (as the Heat found out this year with the Spurs) is the real test.]

Teaching at Spring Street International School I look at Silver levels like this:
1) Besides a head of school, no teacher is in the Carmelo category. A single teacher, while wonderful, only interacts with 50 students (tops) at SS and then only for an hour+ per day. So if you have to spend $$ on staff, find a good (or even great) head of school and spend your $$ there.
2) Even your best teacher has only so much reach. As Silver describes it, the worst NBA team (made up of entirely replacements, zero All-Stars) will still win 16 out of 82 games. According to Silver, Carmelo used to add 11 wins to the Knicks per season. Last year it was only 10 and next year it’ll drop to 9. See the declining value, while still paying him the max?

• So the key differentiation staff-wise is wins over replacement.
• If teacher A leaves, how much better is teacher B?
• How much is that difference worth to us — the school?

3) Unlike the NBA, however, a good teacher (typically) gets better as they age, not progressively worse like Melo and Lebron will. The past few years we’ve hired some newbies. It could be argued that we’ve consequently lost some students, but those newbies were cheap and more importantly, they’re getting better fast. Are they Carmelo Anthony All-Star teachers? Not yet, but they’re not 12-man off the bench-warmers either.

• Our staff challenge is how do we help them get substantially better in a brief amount of time? Professional development is key, but what else? That’s our question.
• Do (even good) teachers plateau? Some do, some don’t. I’m assuming teachers want to get better.

4) Last but certainly not least, private education is different in two other significant ways:

• we don’t have a salary cap — if we can raise the $$ we can spend them. That’s a big if, but we’re not locked into a system-wide ceiling.
• student value feeds parents’ value and parents are writing the check. If we do a kick-ass job with kids, they communicate that to their parents in a 100 different ways. That translates to more $$ (not just in tuition raises, but more kids enrolling, etc).

The last line of Silver’s piece is intriguing: “[GM] Jimmy Dolan played a bad hand and he’s paying the price.” The Knicks had to sign Carmelo this past week. Not signing him would have been a NY-sized public hari kari, but, they’re paying for past sins now. To paraphrase Taleb, “If you limit your options, you become fragile. Fragile people (or NBA teams) get squeezed.” Carmelo is a squeeze. The Knicks had to sign him. Silver doesn’t think it’s a good move, we’ll see.