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The Denver Nuggets, co-owners with the Cleveland Cavaliers of last year's worst record for the regular season with a paltry 17 wins, have won more games than they lost for the first time since Stan Kroenke bought the franchise during the offseason before the 2000-2001 season. They've done it despite having the third draft pick Carmelo Anthony instead of first draft pick LeBron James. They've done it despite being in the toughest division in the tougher conference. Head coach Jeff Bzdelik is a candidate for Coach of the Year. Yet despite all their progress, the simple fact that GM Kiki Vandeweghe will not address coach Buzz's status for next year seems to have many observers buzzing "replacement." All those insects should bug off. Coach Buzz ain't going anywhere. The reason, based on financial option pricing theory, is below.
The Nuggets hold an option to either extend Bzdelik for another season at $1.5 million or terminate the contract with a $500 thousand golden parachute. There is no financial reason to make that decision ahead of time. It is like an option on a stock. Suppose you can purchase one share of IBM at $100 in two months. Even if IBM is trading at $150, it still doesn't make sense to exercise that option until two months from now. One strong result from the field of derivatives finance is that it never makes sense to exercise a call on a non-dividend-paying stock early. For a stock that pays dividends, you might think that if you exercise early, you pick up more of those dividends. If the dividends are continuous, then it makes no difference, and you are still better off just waiting until maturity. Only if the dividends are very lumpy might it sometimes make sense to exercise early.
But are there any dividends to be paid right now by extending coach Bzdelik? Perhaps only psychological ones. Perhaps, you might argue, Carmelo and other players would listen to him more and respect him more if they knew he was going to be around another season. Otherwise, the thinking goes, he's a lame duck, and they don't have to listen to him.
In certain situations, that could be a valid point. But in Denver? A team that apparently has more assistant coaches than any other team? There's almost one assistant coach per player. Surely each player has his favorite assistant coach to talk things over with and learn from, and each of those assistants are loyal to Bzdelik, at least to a certain extent. While there is probably the usual amount of locker room rancor, it doesn't feel like it's ever gotten as bad as say the Chris Ford-Allen Iverson rift or even the mellower Jeff Van Gundy-Steve Francis disputes.
It's not clear that players don't respect coach B or that they would immediately start doing so if he were extended. That seems like a bogus argument. The dividend simply isn't worth it.
And if the dividend isn't worth it, then it's better to wait. The Nuggets want to establish a tradition similar to Mark Cuban's Mavericks that all contract negotiations take place during the offseason. All. That means not extending Steve Nash during the regular season. That means not extending head coach Don Nelson during the regular season.
For Denver, it means not extending Marcus Camby during the regular season. It means not extending head coach Jeff Bzdelik during the regular season.
Denver will of course evaluate all its options during the summer, and if a marquee head coach becomes available, they would be fools not to jump at the chance. But most likely, they will stick with coach Buzz.
The Nuggets visit Phoenix to take on the Suns tonight as part of a two-game road trip. Their second game this Friday will be a rematch of their victory over Houston last Friday. The Nuggets haven't played a game since then, so as Marcus Camby observed, it will either be a matter of too much rest if they lose or just enough rest if they win. Tonight's game starts at 8:00pm MT and will be broadcast on Fox Sports Net and NBA League Pass.
Marc J. Spears ofThe Denver Post notes: Nuggets assistant general managers Jeff Weltman and David Fred- man left Tuesday to scout the Portsmouth (Va.) Invitational tournament. General manager Kiki Vandeweghe is expected to join them Thursday. The tournament, which features standout college seniors, runs today through Saturday and is expected to include Colorado swingman Michel Morandais, 6-foot-11, 320-pound center Nigel Dixon of Western Kentucky, Texas guard Brandon Mouton, Connecticut guard Taliek Brown and Utah guard Nick Jacobson. Alumni of the event include John Stockton, Ben Wallace, Terry Porter, Scottie Pippen and Rick Barry as well as the Nuggets' Jeff Trepagnier, Ryan Bowen and Mark Pope.
Voshon Lenard(bruised ribs) has missed four games but will likely play in tonight's game against Phoenix. Head coach Jeff Bzdelik hasn't decided if Lenard or Jon Barry will start.Mark Pope(knee) andJeff Trepagnier(ankle) are on the injured list.Chris Andersen(knee) played limited minutes on Friday.
Aaron J. Lopez ofThe Rocky Mountain News writes: Among those on Denver's most-wanted list are New Jersey Nets forward Kenyon Martin, Detroit Pistons forward Mehmet Okur and guards Brent Barry of the Seattle SuperSonics, Jamal Crawford of the Chicago Bulls and Quentin Richardson of the Los Angeles Clippers.
The Boulder Daily Camera previewstonight's game.
Marc J. Spears ofThe Denver Postwrites: Having his team make the NBA playoffs wouldn't be the same for Stan Kroenke as winning a Super Bowl with the St. Louis Rams or a Stanley Cup with the Avalanche. But considering the Nuggets' history, it would be almost as satisfying for the owner of all three teams."We are on the path that we set out toward four years ago," Kroenke said Tuesday. "It shows me that we're making progress. When we came in we said it wasn't going to be an overnight success, because there was a lot of work to do. But we're making progress."