November 21, 2017

NBA


By Bryan Toporek

If you’re an NBA player and weren’t in the free-agent class of 2016, you got screwed.

Worse yet, you have only the National Basketball Players Association to blame.

After throwing around money last summer like Allen Iverson at a strip club, NBA teams have been far more fiscally responsible this offseason. Sure, there’s the occasional outlier—see: the New York Knicks’ inexplicable four-year, $71 million offer sheet for Tim Hardaway Jr.—but by and large, teams have been reluctant to sign players to big-money, long-term deals. With cap space drying up and roughly half of the league’s teams headed toward luxury-tax territory next season, according to ESPN’s Bobby Marks, that trend doesn’t appear likely to change in 2018, either.

Kyle Lowry, once presumed to be a lock for a five-year, $200-plus-million contract, re-upped with the Toronto Raptors this summer for $100 million over three years. Paul Millsap inked a three-year, $90 million pact with the Denver Nuggets that contains a third-year team option, meaning Hardaway Jr. received more guaranteed money than his four-time All-Star former teammate. Though Stephen Curry, Blake Griffin and Gordon Hayward each received max contracts, none were undeserving of such deals.

Meanwhile, the money for non-All-Star-caliber players dried up, save for a few exceptions. The Philadelphia 76ers handed out a few bloated one-year deals—most notably a $23 million pact for JJ Redick—but beyond that, there weren’t many available multiyear offers in the $15-20 million range. That’s a marked departure from last summer, when teams readily handed players big-money contracts lasting for multiple seasons:

2016

2017

Player

Contract AAV Player

Contract AAV

LeBron James $33.3M (3 years) Stephen Curry $40.2M (5 years)
Mike Conley $30.5M (5 years) Blake Griffin $34.4M (5 years)
Al Horford $28.3M (4 years) Kyle Lowry $33.3M (3 years)
DeMar DeRozan $27.8M (5 years) Gordon Hayward $32.0M (4 years)
Kevin Durant $27.2M (2 years) Paul Millsap $30.0M (3 years)
Andre Drummond $25.4M (5 years) Otto Porter Jr. $26.6M (4 years)
Bradley Beal $25.4M (5 years) Kevin Durant $26.2M (2 years)
Dirk Nowitzki $25.0M (2 years) Jrue Holiday $25.2M (5 years)
Hassan Whiteside $24.6M (4 years) Serge Ibaka $21.7M (3 years)
Nicolas Batum $24.0M (5 years) Danilo Gallinari $21.6M (3 years)
Chandler Parsons $23.6M (4 years) George Hill $19.0M (3 years)
Harrison Barnes $23.6M (4 years) Tim Hardaway Jr. $17.8M (4 years)
Dwight Howard $23.5M (3 years) Andre Iguodala $16.0M (3 years)
Dwyane Wade $23.5M (2 years)
Ryan Anderson $20.0M (4 years)
Allen Crabbe $18.7M (4 years)
Joakim Noah $18.1M (4 years)
Luol Deng $18.0M (4 years)
Bismack Biyombo $18.0M (4 years)
Kent Bazemore $17.5M (4 years)
Evan Turner $17.5M (4 years)
Evan Fournier $17.0M (5 years)
Ian Mahinmi $16.0M (4 years)
Timofey Mozgov $16.0M (4 years)
Pau Gasol $15.8M (2 years)

The NBA, perhaps envisioning this exact scenario, approached the NBPA a few years ago with a proposed compromise after negotiating new national television contracts that were primed to upend the league’s salary-cap structure. Recognizing that the nine-year, $24 billion pacts with Turner and ESPN would lead to a drastic spike in the salary cap, the NBA attempted to convince the players’ union to accept a “cap-smoothing” proposal that would gradually increase the cap rather than allow it to drastically jump all at once. In the fall of 2014, however, NBPA executive director Michele Roberts poured cold water on the idea, telling ESPN The Magazine‘s Pablo Torre, “At first glance, is not that attractive, I won’t lie. But we’re studying it to figure out if there really is some advantage for players.”

According to ESPN’s Brian Windhorst, the NBA wanted to artificially lower the growth of the salary cap over a few years while guaranteeing players would still receive their collectively bargained 51 percent of basketball-related income. NBA.com’s Steve Aschburner reported the league would send that revenue shortfall to the players’ union, which would then distribute it proportionally among its membership. In essence, cap smoothing would ensure all players benefited from the financial windfall at once rather than just those in the free-agent class of 2016.

The players’ union, however, didn’t see things that way. According to Aschburner, “The NBPA’s economic consultants determined that a typical player would make less money overall by signing contracts into an artificially constrained salary cap (for example, $80 million vs. $90 million) while receiving ‘shortfall’ checks, than he would signing a new deal without the smoothing constraints on the cap.” While the NBA wanted to avoid a situation where the 2016 free-agent class reaped most of the rewards from the new TV deal, the union believed free agents in 2017 and beyond would “still be able to land even larger contracts,” per USA Today‘s Jeff Zillgitt, as the cap would continue to rise over those years due to the new TV contracts.

Alas, the NBPA made one fatal miscalculation: When teams suddenly fall into unexpected cap space, they’re liable to spend it wastefully.

While the 2016 free-agent class did cash in due to the lack of a smoothed cap, their successors are experiencing the consequences. The Utah Jazz attempted to renegotiate and extend George Hill’s contract this past season, but he instead opted to test free agency after being advised “he could receive a significantly larger contract by waiting,” per ESPN’s Tim MacMahon. That market never materialized, however, leaving him to sign a three-year, $57 million deal with the Sacramento Kings that’s only partially guaranteed in the third year, according to NBA.com’s David Aldridge. Andre Roberson, who reportedly turned down a four-year, $48 million extension offer from the Oklahoma City Thunder last fall, according to Fred Katz of the Norman Transcript, likewise found a chillier-than-expected market this summer. He wound up re-signing with OKC on a three-year, $30 million pact, costing himself millions due to inflated expectations.

This problem wasn’t difficult to foresee, either. At Grantland in Oct. 2014, ESPN’s Zach Lowe wrote, “The players union has to look out for its entire membership, and a single-year mega-leap would benefit one slice of that membership at the expense of everyone else.” The following month, Albert Nahmad of Heat Hoops echoed Lowe’s concerns in a post titled “Salary Cap Smoothing Is As Complicated As It Is Necessary,” writing, “If so much cap space is being spent on long-term contracts for the 2016 free-agent class, there may not be much cap space left over for the summers that follow. This could have a particularly damaging effect for higher-priced free agents in 2017 and beyond—right up until the point where the contracts of the highly paid summer of 2016 free agents burn off.”

Hell, Aaron McGuire of Gothic Ginobili anticipated the problem back in July 2014! “Suddenly increasing the cap by a massive amount DOES increase salaries, which is good for the players in aggregate,” he wrote. “But that increase is NOT evenly distributed—it provides a larger-than-deserved bump to the players who happen to enter free agency during that free agent period without any means of redistributing that money to players on guaranteed contracts.”

Heading into the summer of 2016, the salary cap had never increased more than $7 million in one season, according to Windhorst. Because the union rejected the smoothing proposal, however, it leapt from $70 million in 2015-16 to a whopping $94 million in 2016-17, giving new life to capped-out teams. The Golden State Warriors suddenly had enough cap space to sign Kevin Durant. Those that missed out on the big free-agent fish turned their attention to the next tier of players, often forced to overpay because their competitors likewise had a bevy of cap space as well.

Had the cap jumped last summer to say, $80 million rather than $90 million, do Joakim Noah, Luol Deng or Bismack Biyombo get four-year, $72 million deals? Do Evan Turner and Kent Bazemore receive four-year, $70 million offers? That question applies to the NBA draft class of 2013 as well, many of whom signed lucrative extensions off their rookie-scale deals last fall. Would Dennis Schroder still get a four-year, $70 million extension if the free-agent market didn’t go so off the rails last summer? What about Victor Oladipo’s four-year, $84 million extension with OKC?

With cap space suddenly at a premium around the league, belt-tightening will again become common. Under the new collective bargaining agreement, players can receive annual raises as high as 8 percent, but the cap is only projected to rise $3 million next year and $6 million from 2018-19 to 2019-20. That means existing contracts will rise in value more quickly than the salary cap itself, further restricting teams’ ability to make major splashes on the free-agent market.

Seeing as some teams are attempting to keep their powder dry for the marquee 2018 free-agent class—which may include LeBron James, Russell Westbrook, Chris Paul and Paul George, among others—don’t be surprised if more players are forced into taking short-term deals over the coming days. That also bodes poorly for the draft class of 2014, many of whom will head into extension negotiations this coming fall. Each contract signed this summer will help set the market for future deals (save for outliers such as Hardaway Jr.), and those are trending in the wrong direction after last year’s historic spending spree.

While the NBA’s 2016 free-agent class likely feels no remorse about the union’s decision to reject the league’s cap-smoothing proposal, those who weren’t eligible for a new contract last year should rightfully be miffed. A market correction is inevitable once old-CBA contracts and the 2016 debacles expire, but teams’ reckless spending last summer could cost free agents millions over the next few years.


Bryan Toporek

Bryan Toporek is just talkin’ about practice. He writes about the NBA at BBALLBREAKDOWN, FanRag Sports and The Step Back. He also helps curate NBAAsesets.com.

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