NBA fans have prepared for July 1, 2016 for more than 15 months, but the reality of the first day of free agency has brought shock and awe nonetheless. This one-time, unprecedented raising of the salary cap from $70 million to $94 million has opened up major money for every team for a relatively weak free-agent class. Apparently fearing getting left behind, many teams have acted quickly to tie up potential rotation players at dollar amounts and multi-year commitments that would typically have gone to essential starters in past offseasons.
Plenty of deals have inspired near-instantaneous shock on social media. Take you pick from any of this group — Timofey Mozgov to the Los Angeles Lakers for $64 million over four years, Evan Turner to the Portland Trail Blazers for $70 million over four years, Joakim Noah to the New York Knicks for roughly the same as Turner, Solomon Hill to the New Orleans Pelicans for as much as $52 million over four years, the oft-injured Bradley Beal back to the Washington Wizards on a max deal worth at least $128 million, etc. None of these deals can be characterized as sensible in terms of the player’s apparent worth, and readers can probably pick out others from Friday based on personal taste.
To be clear, the dollar figures are not a product of owners and general managers run amok as much as they are a sign of the NBA’s new financial reality. The players would have received this money in some form even if they had not rejected the league’s “cap-smoothing” proposal in February 2015 — the only difference is that it’s going to individuals via salaries rather than to everyone in a dispersal payment. This money belongs to the players based on the collective bargaining agreement, and the amounts would be even higher if they hadn’t given up a large portion of basketball-related income during 2011 lockout negotiations. Players can still be overpaid relative to their talents, but that was the case last summer, as well. These new figures will be familiar in two or three years time.
Whatever — it’s still weird. The league proposed the cap-smoothing idea in the hope of avoiding a destabilized market, and that’s exactly what we’re experiencing in this first 24 hours of free agency. To make just one comparison, the $16.4 million Evan Turner will make with the Blazers in 2016-17 is just $1.2 million less than what All-NBA First Team selection Kawhi Leonard will earn under the max-level contract he signed with the San Antonio Spurs last summer. In fact, Leonard and Turner will become unrestricted free agents in 2019-20 with the 2014 NBA Finals MVP having made roughly $8 million more than Turner over the overlapping years of their contracts even though he signed for the maximum allowed under the salary cap. Leonard is considered one of the best players in the league, whereas Turner is a merely useful player who looks like an odd fit with the rest of Portland’s roster. Which deal looks better?
Virtually any deal that started in the 2015-16 season or earlier is now an extreme bargain. While comparing any contract to a max-level deal is tricky — those artificially suppressed salaries effectively fund large contracts for role players — once-pricey players like Ricky Rubio (due $42.3 million over the next three seasons) have morphed from trade possibilities to cap-friendly keepers in the eight days since the draft. The suggestion that such salary disparities could animosity in locker rooms around the league is probably overblown — remember, players unanimously agreed to the cap spike last year and know what they were getting into — but there is now a clear division between guys who sign their deals now and those who did so a year ago or earlier.
Everything will become more balanced in the years to come, but it’s currently much harder to distinguish a good contract from a good one. The Lakers clearly overpaid for Mozgov, but his $16-million annual salary looks better given that most of their core players are still on rookie deals below $6 million (a pittance at the new cap) and they still have plenty of cap space to add more talent. Turner’s deal with Portland is for slightly more money more a better player, but arguably much worse given that he needs the ball a lot and with a hefty new contract coming to C.J. McCollum after next season. Salaries are now so different that they have to be taken on a team-by-team basis even more than usual. Who does that team have to pay in the future? Which players would reasonably move there in free agency in future seasons? What’s the opportunity cost of not overpaying someone now?
If it all looks a little wacky this Friday, rest easy knowing that these salaries will normalize in a few years. Yet, in the same way that new contracts can look better now with every old deal becoming a bargain, these 2016 agreements will eventually become the bad contracts that NBA fans know and lament. No one will understand how Mozgov could possibly make $16 million in 2020, just as no one could justify Omer Asik’s nearly eight-figure salary with the New Orleans Pelicans this season (and for a few more). This offseason is an especially peculiar time, and many teams have made it more so by rushing into long-term deals with players if only because the money has to go somewhere.
The Orlando Magic, then, deserve some credit for overpaying in the short term instead. Their one-year, $15-million agreement with forward Jeff Green is a terrible deal on salary alone — Green is a favorite of fans who remember his occasional 30-point outbursts and forget his lack of impact in most every other game. While there’s no good reason to throw $15 million at a 29-year-old still cashing in on untapped potential, the Magic will at least get that money back to give to their own free agents and other targets next summer. Frankly, Green’s deal should have been the standard for other teams. There’s no shame in paying someone if the money has to go somewhere — the problem comes if it’s not available when you really need it.
The shock of the new normal will eventually wear off. Unfortunately for some teams, these long-term deals will still be fully guaranteed when it does.
– – – – – – –