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Rekenthaler Report

Baskets, Baseballs, and Target-Date Funds

Sports marketplaces aren’t all that different from the investment arena.

Two Steps Backward
In 1997, the National Basketball Association decided to make 3-point baskets more difficult to score. The 3-point line remained the same distance at the corners, but was extended another 21 inches in the middle of the court. The stated reason: The league wished to increase scoring.

The league’s explanation was that the 3-point line was intended to “stretch” opposing defenses, by pulling them away from the basket, so that offenses would profit by having more space with which to operate. With the 3-point line having been placed too close, not enough stretching had occurred. Pushing back the stripe would move shooters further from the basket, which would then force defenses to respond, thereby giving offenses the desired amount of space.