You'll also, slightly depressingly, find this website fourth in those search results. There's a reason for that. "Creative financing" is something that I've harped on about for a while. The financial side of the NBA gives me a jolly; watching and learning how the NBA teams manage (or mismanage) their salary cap space, the luxury tax threshold and all their exceptions gets me off in ways that it really shouldn't. I don't know why it's fun, I only know that it is. I think you agree.
Therefore, there follows a list of some of the better examples of creative financing in the NBA today, some of the ways in which executives and cap experts have manipulated the system, staved off the shackles of oppression, and beaten the terrorists.
- The Bulls set a precedent by signing four players to descending contracts at the same time. At one point, the contracts of all four of Kirk Hinrich, Andres Nocioni, Smiling Joe and Sulking Ben had contracts that shrunk on a year-by-year basis. The idea of this was to maintain future salary flexibility to allow them to retain Ben Gordon, Luol Deng and Tyrus Thomas down the road as well. It didn't work, though; even though they paid them backwards, the Bulls overpaid all four, then overpaid Deng as well, and those combined with a staggeringly powerful fear of the luxury tax unbecoming of a team with such hefty profits (and an irrational hatred of the man) led to Gordon leaving as an unrestricted free agent this summer. Which sucked. Still, it could be worse. They may well have maximum cap room in 2010. (Yay! Because cap space went so well for us last time.)
- The Hawks are currently trying something similar. In the last six weeks, they've re-signed all three of Marvin Williams, Mike Bibby and Zaza Pachulia, all to pretty decent value contracts. All three also have contracts that dip in value in the 2010/11 season, a crucial offseason for the Hawks if they are to be able to pay to keep their star player, Joe Johnson. Knowing this to be true, GM Rick Sund has tried to set himself up to be able to pay all four players without going into the luxury tax. It's a good idea, in a way. But the downside of it is that this means the Hawks are going to be grazing their balls against the powerful stone grinding wheel that is the luxury tax threshold, and all they'll have done is retaining a good yet inadequate core. Of course, they would have had some financial flexibility, but they decided to use it all on Jamal Crawford, instead of re-signing the thoroughly comparable Ronald Murray for a third of the price. It's a strange decision.
- Quite a few players have taken second year dips in multi year contracts. The Magic (the creative financing GENIUSES that they are) once did it with Tony Battie, a move which enabled them to give Lewis even more completely unnecessary money than before. The Raptors have done it with Jarrett Jack, as they'll be struggling to stay under the tax next season. Others to have signed contracts that either descend or that have the occasional dip in them include Kris Humphries, Devin Harris, Speedy Claxton, Jarron Collins and Marcus Camby. But it's not common.
- Contract guarantees can be fun, too. There's way more leeway to them than there is often considered to be. Most unguaranteed or partially guaranteed contracts are guaranteed against lack of skill; that is to say, 'if we don't think you're good enough, we're cutting you.' Furthermore, any of those include dates on which the contract will become guaranteed if the player is still on the roster. But you can get way more creative than that if you want to. One such example is that of Matt Harpring; the Jazz re-signed Harpring to an oversized 4 year $25 million contract, but with conditional guarantees on the fourth year. Harpring were to only be guaranteed $4.5 million if he either:
a) missed 47 games combined during the 2006-07, 2007-08 and 2008-09 seasons due to injuries to his right knee, or b) missed 35 games in the 2008-09 season only due to injuries to his right knee.
Neither of these happened. Harpring gutted out the injury, as well as a concurrent serious injury to his ankle, and saw through all three seasons. It came at a cost, though; he's now about to retire. What a trooper, though.
- Leon Powe had something similar but different going on with his first contract from the Boston Celtics. Powe signed a three year minimum salary deal with the first year guaranteed, but with performance-related guarantees on the other two years. His second year salary became guaranteed if Powe either made the 2006/07 rookie team, or if his point, rebound and assist averages added together to total more than 14.0 in more than 41 games played. His third year had a similar guarantee, but with the threshold raised to 16.0. It turns out that this was quite a good idea, as Powe became a valued contributor while playing for the cheapest possible price. Shame about the latest knee injury.
- There's not much flexibility for creativity with rookie scale contracts. They follow a strict formula - two guaranteed years, two option years - and even though players and teams can negotiate the contract's value to between 80% and 120% of the scale amount, almost everyone gets the 120%. (The only ones I can think of that haven't are Ian Mahinmi, George Hill and Sergio Rodriguez.) However, this season, the Indiana Pacers found a new way to make things interesting. When signing Tyler Hansbrough, they gave him the customary 120%, but with an interesting caveat; all four seasons of the contract are only 80% guaranteed. (Note: that's all that rookie scale contracts have to be guaranteed.) The purpose of this isn't entirely obvious; if Hansbrough really sucks or dies or something, the option years won't be exercised anyway, so having a partial guarantee on them doesn't make much of a difference. But it's interesting because it's creative. And, dammit, that's what we're after.
- It might be the Mavericks, not the Magic, that are the kings of creative financing. (A cynic would say that they need to be, considering that they overpay almost everyone. That cynic would have a point.) Particular favourites of Donnie Nelson and friends include conditional guarantees based on championship wins (given to Jerry Stackhouse and Greg Buckner) and team based performance incentives (see this). Having unguaranteed final seasons in contracts is a good ploy of theirs; Erick Dampier has an unguaranteed 8 figure final season in 2010/11, with conditions that he's never going to meet, giving the Mavericks a massive trade chip to play with. Buckner's contract - which they initially signed, then gave away, but have now brought back - has only a small percentage of his final two years guaranteed. You probably already know about the last year of Stackhouse's deal, and the uses that had. And you may also have known that the last year of Jason Terry's contract is only $5 million guaranteed as well.
But the Mavericks have saved their best unguaranteed contract trick for last. After the Magic matched the offer sheet that Dallas gave to Marcin Gortat, the Mavericks found themselves with a full MLE again. Rather than use on an MLE calibre player, they instead decided to spend $4.5 million of it on Drew Gooden, a poor player with the worst defense in the NBA and an increasingly bad understanding of offensive continuity. The contract, though, has a caveat; only $1.9 million of the $4.5 million is guaranteed. And there's no guarantee date.
It's fairly normal for players to sign partially guaranteed one year contracts. If it wasn't common practice, training camp would suck. But it's rare for players earning more than the minimum to do it, and it's the first time I've ever seen it on a contract this size. It's actually quite a clever ploy, because it gives the Mavericks quite a trade chip. In a year when so many teams are over the tax, and so many teams need to make instant salary savings, unguaranteed contracts have to be considered even hotter shit than usual. And by signing Gooden to one, the Mavericks give themselves a pretty mean trade chip between December 15th (the first date Drew can be traded) and January 10th (the date all contracts become guaranteed). He was, without a shadow of a doubt, signed with this intent in mind. So expect it to happen.
As for what's in it for Gooden.......well, not a lot. $2 million for three months work is never bad, but for this to have been the best he could get, his other offers must have really sucked.
- And finally, here's an example of how not to creatively finance. Naturally, it involves Otis Smith. And it also involves the man in the opening picture, James Augustine.
Augustine was drafted by the Magic in the 2006 draft, and signed a two year rookie minimum contract with the team. He stayed with the team for the whole two years, barely playing, and was became a restricted free agent. The second year of his first contract was only 25% guaranteed until July 30th, and the rule with qualifying offers is that they have to be at least the same amount of guaranteed money and the same guarantee dates as the final season of the previous contract. So when Orlando tendered him a qualifying offer, Augustine accepted it immediately, and was thus under contract for the 2008/09 season for $972,581 (the amount of the QO = minimum salary + $175,000), of which $243,145 (25%) was guaranteed, with a guarantee date of July 30th 2008. Orlando then waived him before that date, meaning that they essentially paid Augustine a quarter of a million dollars to have him under contract for two weeks in mid-July.
It's definitely financing, no question about it. And it's definitely creative. But it was also really, really thilly.
Otis Smith's job became far easier and far more secure when the Magic's NBA Finals appearance prompted the aptly named Rich DeVos to start stumping up luxury tax dollars. Imagine what would have happened, though, if that hadn't happened. There'd be no Marcin Gortat. There'd be no Brandon Bass. There might not have been any Vince Carter trade, and there might not have been any Matt Barnes signing. The Magic would be relying on the man who coined the term "creative financing" to do that exact thing. And it's hardly something he's renowned for.
I commend the Magic's offseason. They've done pretty much everything right. Even the little things, such as the inclusion of Ryan Anderson into the Carter trade, were done correctly. Otis Smith has had a good summer. But Magic fans should be very, very grateful to ownership. Spending is easier without a budget.
- Will Blalock: The Pacers have been said to be looking for a point guard all summer long now. They kept Jamaal Tinsley inactive for all of last season, despite him being able and willing to play. Jarrett Jack is a restricted free agent, and even though he's expected back, he isn't really a point guard anyway. Neither is Travis Diener, and they seem to hate T.J. Ford more than it seems as though they should. (Must be because he's black.) But while Will Blalock is very much a point guard, I don't think the answer to the Pacers' point guard problem lies in a man who averaged 4.5 points and 2.1 assists in the German league last season.
Byars' three point percentage by month, last season:
November - 0% December - 56% January - 28% February - 50% March - 26% April - 0% Overall - 38%
It might be a coincidence that the two months he shot the most threes in were December and February. Or it might not.
- Tyler Hansbrough: Us Bulls fans discussed at length whether it would be a good idea to pick Tyler Hansbrough at #26. We eventually decided on "yes". (And, after what we wound up doing with the pick.......well, you know.) As draft day approached, we moved on to discussing whether it'd be justifiable to pick Hansbrough as high as #16. Opinion was split, but the majority said "no". Turns out it was irrelevant anyway, as Indiana went for him at #13. And, since it's the 2009 draft we're talking about, I think they can get away with that.
That earlier comment about T.J. Ford's race was uninspired satire, by the way. I don't care how vanilla the Pacers are. Neither should you.
- Roy Hibbert: Frank admission - Roy Hibbert is better than I thought he would be. He can score at the NBA level. Just can. He'd be better if he toned down the shot block attempts and focused more on the rebounding, and that foul rate is pretty ridiculous, but not many 22 year old rookie centres can score at that rate. Once he stops being Bargnani-ish on the defensive glass, he'll be goooood.
- Jared Homan: The Ho-Man played 16 games in the Euroleague last year as a member of Cibona Zagreb, which is a very high standard of basketball for any man to be playing. Unfortunately, he didn't play very well in them, averaging only 4.6 points and 3.3 rebounds, along with 2.4 fouls. His size is still a virtue, but his size is also nothing special by NBA standards. And nor is his age (26). Still, Rasho Nesterovic is a free agent, which opens up a space on the Pacers for a new white centre.
(If I keep forcing this joke home, it might start being funny. Maybe.)
- Aaron Jackson: Jackson broke the freak out last year, averaging 19.7 points, 5.5 rebounds, 5.7 assists and 1.6 steals per game, with percentages of 55.4%, 40.5% and 80.9%. Those numbers are up across the board from the year before, and his scoring output was more than doubled from his junior to senior years. Learning to shoot can do wonders for a man's game. If he'd been in a less point guard heavy draft, or at a school more noteworthy than Duquense, then he might have gotten drafted. As it is, he's now fighting Will Blalock for a training camp spot, a fight that both will probably lose.
- Trey Johnson: Johnson briefly played in the NBA last season, signing a couple of ten day contracts with the Cavaliers. He only scored 4 points, all from the foul line, but it's an NBA career at least. When he wasn't at the big dance, he was in the D-League, living up to his first name with the Bakersfield Jam. Johnson scored 21 points per game in 41 minutes per game, shooting 46% from the field and 41% from the three point line. If he can be bothered to start playing defense, he might go down as the best player in the history of Jackson State. But until then, that title belongs to Lindsey Hunter. Or Purvis Short.
- Leo Lyons: I watched a lot of Missouri last year. It was hard not to, because they did pretty well. J.T. Tiller is my boy. But my opinion of Lyons isn't highly flattering. He has some touch, some athleticism, and his wild flails to the rim are effective. But he makes a crap load of mistakes, doesn't really have NBA size, and nor was his heart really in it defensively. If he was a sophomore, he would have been one to keep an eye on. But he wasn't.
- Josh McRoberts: McRoberts finally got some PT last season, and in doing so he put up an almost identical PER to that of Marquis Daniels. He's also grown a brilliant beard, and either is or was plugging Lauren Conrad from MTV's The Hills. Not a bad year for McBob, all told. He's a restricted free agent, but he'll return.
- A.J. Price: If drafting three straight seniors out of big programs wasn't enough of a clue (Hibbert, Rush, Hansbrough), then the Pacers picking Price in the second round this year ought to have alerted you to the fact that Larry Bird watches the NCAA tournament. More importantly, if the Pacers really are serious about getting an extra point guard regardless of how many options they already have, I would imagine that Price has a beeline on that spot right now. But that's only if they do. (By the way, I just spent ten minutes trying to think up a plausible Jamaal Tinsley trade scenario. But I couldn't do it. Is there not room for him in Indiana to rebuild his value just a little bit?)
- Brandon Rush: Rush's rookie year wasn't good, scoring inefficiently and ranking last on the team in plus/minus rating. But he has an opportunity here; Marquis Daniels is an unrestricted free agent, Mike Dunleavy's knee is reportedly all kinds of haggard, and new signing Dahntay Jones is a not-very-good defensive specialist. There's minutes available for Rush, then, if he can figure out how to get to the foul line more than once a week.
- Anthony Smith: Smith averaged 17.6 points and 6.5 rebounds for Liberty last year. And here's a Googled factoid:
As a junior, Smith was the only player in the nation during the 2008 season to attempt at least 200 three-point field goals and succeed on at least 40 percent of his three-point field goal attempts (41.0), while also hitting over 50 percent of his field goal attempts (51.5). Only four other players in the nation accomplish the same feat while attempting at least 100 three-point field goals, including Mario Chalmers (Kansas), Lee Cummard (BYU), Malik Hairston (Oregon) and James Harden (Arizona State).
Despite the apparent brilliance of his jumpshot, though, he never shot over 66% from the foul line in his four year NCAA career. And that's all I've got.
Many of the following people are called Hamilton. If you don't want to know the result, look away now.
- Brian Hamilton signed with the New Jersey Nets for training camp after playing for their summer league team, which guaranteed him a free trip around Europe. Hamilton didn't make the team, though, and is currently unsigned. By the way, speaking of the Nets summer league team, look how stacked that bad boy was. They could have put together a depth chart of this kind of calibre:
That team is friggin' stacked, even if it is (as are all summer league teams) a bit short. This wasn't quite how it worked out, as Jamar Butler didn't turn up, Sean Williams started at power forward, and a combination of Conroy and Carroll did most of the point guard work. But, still. In relative terms, that team is heaving. God I love summer league.
- Venson Hamilton is into his fourth season with Real Madrid. However, his playing time has all but disappeared. In the Spanish league, Hamilton averages 1.1 points and 1.8 rebounds in 6.7 minutes a game, slightly raising his scoring average to 1.6 ppg in Euroleague play. On the year, he has 18 points and 21 fouls. The money must be good, because the opportunity isn't.
- Vernon Hamilton was acquired yesterday by the Colorado 14ers of the D-League, where he can backup Eddie Gill at point guard, or replace him should Gill get a call-up. Fun Vernon Hamilton fact: the highest that Vernon Hamilton has ever shot in a single season from the free throw line is the 55.1% that he shot in 2005-06, while still a junior at Clemson. Nice.
- Zendon Hamilton is still going, albeit currently unsigned. The journeyman started the year in Russia with Spartak Primorie Vladivostok - the last placed Russian Superleague team that currently boasts Desmon Farmer amongst its members - but left after four games, totalling 28 points, 20 rebounds and 30% shooting in that time. Zendon Hamilton never got a fair shot in the NBA. Despite numerous try-outs and a career that spanned 6 fractured NBA seasons, Hamilton was better than a lot of the players that he kept losing out to. But because he never had a multi-year contract, he never stuck like he could have. There, I said it.
- Former Suns and Jazz centre Ben Handlotion hasn't played in three years. I seem to remember once finding a source that cited his retirement as being official, but I can't seem to find it again. But since he is 34 and has been out of the game since early 2006, you can probably go ahead and assume it.
- Tyler Hansbrough averages 22.7 points in less than 29 minutes a game for North Carolina. A senior, this is going to be the year that he finally gets drafted, whether he likes it or not. Watch as he plummets down the draft board, as teams pass over his prolific production in light of his lack of size and athleticism. (Note: I'm not saying that they're necessarily wrong for this. Just that it's going to happen. Just like it happened with J.J. Redick. And just like it should have happened with Adam Morrison.)
- Travis Hansen has been a very good swingman in Europe for a while now, and he's still with the Russian team that Jannero Pargo just left. Only just, though; there were strong rumblings of Hansen being signed by Lottomatica Roma. But it didn't happen, and Hansen stays in Russia, where he averages 15.8 points, 4.7 rebounds and 2.5 assists in the Russia Superleague, alongside 14.4 points, 4.9 rebounds and 3.1 assists in the Eurocup. Now that Pargo and Hollis Price have left Dynamo, maybe Hansen will start getting paid on time.
- Thunder draft pick DeVon Hardin signed in Turkey to begin the year, but left without playing a game as he was still recovering from injury. Seemingly better now, he signed this month with ESTIA Egaleo in Greece, and scored 7 points with 9 rebounds in his debut last Wednesday.
- Finally, I do do requests, and here are some of them now. Former Sixers centre Efthimios Rentzias retired in August 2006 due to chronic injury problems, aged only 30. In his final season, playing for a team called Forum Filatelico Valladolid (made up of Spanish stamp collectors, presumably), Rentzias averaged 7.8ppg, 4.0rpg and 1.2bpg in 10 games, before being waived due to his injury, and retiring for good a few months later. Former Louisville standout Taquan Dean is in Spain, playing for Polaris World Murcia, who are unfortunately second to last in the ACB. This isn't Dean's fault, as he averages 16.6. points, 3.2 rebounds and 1.8 assists while starting at shooting guard, shooting more threes than twos. And another former Louisville Final Four starlet, Juan Palacios, averages an uninspiring 9.2 points and 4.3 rebounds for CB Vic, one of the worst teams in the LEB Gold.
As for the guy who really wants Zoran Planinic information, check this website EVERY DAY, and eventually you'll get lucky.
Sham is a miserable and self-effacing little bastard, whose basketball opinions are often riddled with bias, insecurity, and rank immaturity. He has also never played the sport, and the only game he has ever been to see was a Ware Rebels game back in 2001. The night bus didn't show up and he had to walk the 9 miles home. It was after this that his passion for basketball really took off.
He considers himself to be Britain's foremost NBA expert, an arbitrary title that carries with it no basis in fact, or any worldly significance. He also wrote this section of the website in third person narrative, purely for reasons of arrogance.
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the really stupid ones that I wish I'd never written.
