Most of the NBA's major free agents have signed new contracts and the biggest take-home lesson is that it sucks to be an elite player in the NBA.
The NBA's strict free agency has a number of rules designed to discourage the movement of players from team to team. But in reality, the only players that are being hurt are the top players, the so-called "max money" players.
The two biggest obstacles are the "Bird Rights" (named for Larry Bird) which allow teams to exceed the salary cap to re-sign their own players, and the contract limits, which limits free agency contracts to four years unless the player re-signs with his own team. In the latter case, teams can add a fifth year and a big chunk of money to the contract.
Kirk Goldsberry of Grantland.com put together a chart showing how this only really hurts the top players.
— FiveThirtyEight (@FiveThirtyEight) July 28, 2014
The key is the red line. Players above the line signed contracts worth at least $10 million per year.
Of the 13 players to sign contracts worth at least $10 million annually, only two players signed with new teams (in red). One of those was LeBron James, who signed a 2-year deal hoping to cash in later under the new television contracts. The other was Chandler Parsons, who was a restricted free agent and the Dallas Mavericks had to overpay in order to sign.
If the top free agents want to maximize their value, they have to stay with their current team and no true bidding war is possible. In addition, these are the players that teams would be most willing to give longer contracts with more guaranteed money. Instead, teams can only offer other team's free agents contracts that are four years in length, potentially costing these players tens of millions of dollars.
As Goldberry points out, no player this year took the "Dwight Howard Deal," a 4-year, maximum value contract with a new team. With the looming television contracts potentially increasing salary limits down the road there was even more reason to turn those down this off-season.
On the other hand, players below the red line are the NBA's true free agents. If there is enough demand these are the players that can engage in true bidding wars and the only thing that can keep another team from outbidding the incumbent team is the salary cap.
These players will make less money than the top players but they are the only players maximizing their value on a truly open market.
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