There’s an NBA player named Buddy Hield who recently turned down a contract offer of $22.5 million per year.
Maybe you’ve never heard of Buddy. That’s OK, you’ll still get the message here.
Buddy plays for the Sacramento Kings. He has been in the NBA for 3 years.
Last year was his best season by far. He averaged over 20 points per game, and was one of the best 3-point shooters in the league.
Buddy’s team, the Sacramento Kings, offered Buddy 4 year contract extension worth $90 million.
Buddy rejected the offer. He even went as far as to call such an offer an “insult.”
Also said: “if they don’t want me, I’ll go elsewhere… how many big free agents come to Sacramento?”
Perhaps you would be happy to be insulted in such a way. Ninety million dollars is a hell of a way to be disrespected, you may be thinking.
But… It’s Buddy’s right to feel how he feels. I mean, he has been good enough to be offered the contract in the first place. And it’s his right to want more.
It’ll be interesting to see how this all plays out.
There’s a deadline coming up for Buddy and the Kings to get a deal done. If they don’t come to an agreement, Buddy will be a free agent next summer, and he will find out if any other NBA team values him at more than $90 Million.
What Buddy Hield and his team (of agents and advisers) may be losing sight of — or be totally right about — is that value is not absolute.
It’s relative.

In other words, Buddy Hield being worth $90 million (or more, or less) is less about his skills in a vacuum, as it’s about his worth relative to everyone else in the NBA.
Because, if Buddy doesn’t come to terms with Sacramento, he will have to find another NBA employer — and, Sacramento will have to replace Buddy with some other player.
So, what this is really about is not insults or desire.
It’s about opportunity cost and relative value.
Opportunity cost is what you give up every time you make a commitment.
I’m in my home as I write this. The opportunity cost of being in the house is that I’m not outside. Another cost is that I’m not at the gym, or in the car, or at Whole Foods.
I live in Miami. My opportunity costs for that choice are Los Angeles, Philadelphia, Chicago…
Every time you do something, opportunity cost is everything else that you’re subsequently NOT doing.
In terms of opportunity cost, Buddy Hield has a point: there aren’t too many 20-point-per-game scorers who willingly sign contracts to play basketball in Sacramento.
Though Buddy would not be a “big free agent” himself on the open market, he might be the “biggest” option the Kings have, given the circumstances.
Relatively speaking, Buddy has a reasonable argument that he’s worth more than $90 million specifically to the Kings.
But… there’s also a reasonable argument that he’s not worth it.
I’ll explain.

For a player, basketball is forever a delicate balance between individual and team accomplishments.
If you, as a player, can point to significant advancement in one or the other, that’s a solid argument in your favor. Ideally you’ll have both.
On the one hand, Buddy had his best NBA season last year. He started all 82 games. Scored all those points. Proved himself to be the player people thought he could be when he was drafted.

Yet, Buddy’s best individual performance wasn’t even enough to get him into the All-Star game. I don’t recall anyone mentioning him as a possible choice for the game.

In other words: Buddy’s best wasn’t even one of the best in the NBA. There are a lot of players who are better than Buddy Hield’s best performance.
On the other hand, the Sacramento Kings, Buddy’s team, failed to make the Playoffs, again, last season.
There are 30 NBA teams. 16 of them make the Playoffs.
Plainly stated: Buddy’s best personal season wasn’t enough to get his team even into the top half of NBA teams.
Buddy Hield’s best effort left him short of the upper echelon of players, and left his team still in the bottom half of the league.

I’m not saying this to insinuate that Buddy is not good — he would be a great fit on my hometown 76ers, actually — just to show you that everyone’s value is not just about what we do.
It’s about our value compared to all the other options out there, AND in consideration of how much our presence helps a situation (if at all).
Through his comments, Buddy is placing a bet on himself. I wouldn’t be surprised if he wins and the Kings offer him more money today or tomorrow.
Buddy would look like a genius who stares down an NBA team at the negotiating table and won.
It’s also reasonable that the Kings challenge Buddy to, next summer, go find an NBA team who will offer Buddy more than the $90 million he just rejected — and Buddy might not find it. This has happened to other players.
We’ll find out in either two days, or twelve months.

Here are some episodes you should listen to that reflect what you just read:
#952: How To Bet On Yourself -- And WIN
#434: Determining Your "Retail Value" in Life & Business
#1212: Price Is A Story
#1181: "What If My Price Is Too High?"
#632: When Do You Need Your Ego? All The Time

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