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Rockets can’t afford to worry about sunk costs

Once the milk is spilled, you’re not going to drink it.

Minnesota Timberwolves v Houston Rockets Photos by Logan Riely/NBAE via Getty Images

In my brief experience of talking about my beloved Houston Rockets on the internet, I’ve noticed a consistent habit among my peers. We, as a fanbase, tend to employ the sunk cost fallacy. It makes sense: the Rockets have, at this stage in their rebuild, already sunk a lot of costs.

Before I continue, let’s be clear on what a sunk cost fallacy is. Oxford defines it as “the phenomenon whereby a person is reluctant to abandon a strategy or course of action because they have invested heavily in it, even when it is clear that abandonment would be more beneficial.”

Sound familiar?

I’ve written before about how the Rockets need to maintain flexibility above all else. This organization can’t afford to base decisions around the costs they’ve already paid. Those costs are already sunk.

There are two specific situations where I see this fallacy employed most often.

Alperen Sengun doesn’t need to be anything but developed

I’ll start here by making an effort to dodge the inevitable “Alperen Sengun hit piece” accusations.

I do like Sengun. I think his basketball IQ verges on a genius level. His floor vision is stronger than all but very few big men in the NBA today.

I think he has star potential. The operative word there is, of course, “potential”. For context’s sake, I’d bet everything I own (which isn't much, but does include a PS5) on Jalen Green developing into a star.

I’d bet everything but the PS5 and my clothes on Sengun doing the same. Which is basically a bunch of books and a 2016 MacBook Air that’s hardly functional.

By now, everyone knows that the concerns about Sengun all revolve around his potential as a defensive player. I won’t bother to rehash them in detail: slow feet, average wingspan, etc etc.

I see the sunk cost fallacy employed in Sengun’s case frequently. The argument goes that since the Rockets parted with two protected first-round picks to acquire them, he has to be the team’s starting big man indefinitely.

Suppose, hypothetically, that Sengun ends up being a bottom-five defensive big in the NBA. In that event, it wouldn’t matter if the Rockets traded 15 unprotected first-round picks and Clutch the Bear for him. Starting him would be untenable.

Imagine this scenario. The Rockets buy a second-round pick in this year’s draft to grab Yannick Nzosa. For the uninitiated, Nzosa was viewed as a potential lottery pick around this time last year for his defensive potential. However, his offense is so undercooked that he’s fallen out of the first round altogether.

The year is 2025. Nzosa is now Sengun’s backup. He’s one of the best defensive bigs in the NBA. The on/off splits suggest that the Rockets are distinctly better when he takes the floor with Green, Banchero, and the team’s 2023 draftee.

Does it make sense to say, “Well, we only used a second-round pick to get Nzosa, and we burned two (protected) first-rounders to get Sengun. It doesn’t matter if the team is better with Nzosa on the floor”.

Of course it doesn’t! Those picks are already gone. If (hypothetically) the team chose Sengun over Nzosa, they’re just compounding the cost of Sengun. Now, he didn’t only cost two first-round picks, he cost the opportunity to start one of the best defensive bigs in the NBA.

In other words, the Rockets would be failing to abandon a strategy or course of action because they have invested heavily in it, even when it is clear that abandonment would be more beneficial.

Where the Thunder eat doesn’t make the anything

The other commonly used sunk cost fallacy in the Rockets’ universe pertains to the 2024 and 2025 first-round picks the team owes to the Oklahoma City Thunder.

The argument goes that since the team owes those picks, they’ll have no incentive to lose after next summer. Ergo, they have to make win-now roster moves and ensure the worst possible picks for the Thunder.

First of all, those picks are protected. The 2024 pick is top-four protected, and the 2025 pick is top-ten protected (and a swap if it falls outside of that range). One could just as easily argue that the Rockets ought to continue tanking to maximize the odds of the picks not conveying at all.

I’m not here to make that case. The Rockets will have likely had three lottery picks by the summer heading into 2023-24. That will do. On the other hand, rushing to sign mediocre veterans to ensure a play-in position is also less than ideal.

The Rockets should be trying to win by then, but not to avoid conveying picks to the Thunder. This team shouldn’t be operating out of desperation: that means they’re negotiating from a deficit.

Say, for example, the Rockets are targeting a three-and-D wing in free agency that summer. Suppose they swing and miss on Andrew Wiggins. Overpaying Kelly Oubre Jr. just to ensure the Thunder get the worst possible pick from them would be a mistake.

The picks are already gone. The trade already happened. In that scenario, the Rockets would again be compounding the cost of the Westbrook trade by denying themselves the opportunity to build their roster properly. Overpaying mediocre veterans doesn’t negate the cost of the Westbrook trade. It aggregates it.

Mistakes will happen through the course of an average NBA rebuild. Trading two protected firsts for Sengun probably wasn’t one: he’s immensely talented, and those picks are protected to an extent that they’re highly unlikely to convey inside the lottery. On the other hand, committing to him as a starter just because they moved them would be one.

The Westbrook trade was a colossal, franchise-altering failure, but you knew that already. It was the dying breath of the Morey era.

It also wasn’t insurmountable. Again, the Rockets can afford to make mistakes.

They just can’t afford to compound them.