Sam Presti’s Survival Strategy In A Post-Apocalpytic Dystopian Nightmare
October 26th, 2009

Simple question: Did the tough economic climate affect NBA team’s spending plans as much as MSM scaremongers would have you believe?

Not-so-simple answer: Kind of.

This summer saw a team that could have had nearly eight figures of cap room opt not to use any of it. The Oklahoma City Thunder did pretty much nothing with their offseason once draft day was completed, and having won a total of 23 games last year, it’s justifiable to ask why that was. There follows some exploratory maths, which get a bit dull and confusing.

If the Thunder had completed their buyout of Earl Watson (saving them $3.125 million; for argument’s sake, let’s assume that it could have been done earlier than July 17th), not signed James Harden, B.J. Mullens and Serge Ibaka until their cap space had been used, renounced all these guys that they don’t want, not bothered to trade for Etan Thomas, and kept Chucky Atkins and waived him, they would have had the following payroll:

Nick Collison – $6,250,000
Nenad Krstic – $5,160,832
Kevin Durant – $4,796,880
Russell Westbrook – $3,755,640
Jeff Green – $3,516,960
Earl Watson (waived) – $3,475,000
Damien Wilkins – $3,300,000
Thabo Sefolosha – $2,759,628
D.J. White – $1,036,440
Shaun Livingston – $959,111
Kyle Weaver – $870,968
Chucky Atkins (waived) – $760,000

Total = $36,641,459 for ten players.

To that total, add the cap holds of $3,336,800 for Harden and $933,500 for both Mullens and Ibaka, take away all the cap holds linked to above (which at the start of the offseason also included cap holds for unwanted players such as Desmond Mason and Mickael Gelabale) and the Thunder would have had themselves a total team salary of $41,845,259. Against a salary cap of $57,700,000, that would have meant cap room of $15,854,741. And that’s pretty much the max.

(If bits of that don’t make sense to you, such as the talk of cap holds for draft picks and free agents, don’t worry about that for now.)

Had they done this, the Thunder would have the second-biggest free agent player this past offseason, second only to the Pistons. However, the Thunder didn’t use their eight figures of possible cap room. They didn’t use any of it, in fact. They didn’t make a single move this offseason that required any cap space, which is why they continue to rock massive cap holds on such seminal names as Danny Fortson and Malik Rose (over $21 million added to the cap in those two alone).

What they did instead was trade Wilkins and Atkins to Minnesota for Etan Thomas, taking on an extra $3,846,088 of salary this season just for getting future second-round picks. They then followed tradition by signing their three first-rounders to 120% of the scale, boosting those earlier figures of $3,336,800 and $933,500 to $4,004,160 and $1,120,200 respectively. Finally, they made their only two free agency signings of the summer: Kevin Ollie and Ryan Bowen.

Ollie and Bowen as free agencies signings. Right. They could have had as-near-as-is max cap room, yet instead, they got two of the least offensively-talented players in the league today. No offence, in both sense of the word. (They tried to make it three when they also signed Michael Ruffin, but roster numbers got the better of him. Sadly.)

The Thunder still have the lowest payroll in the league, a modest $48,383,101, and could have nearly $9.5 million in cap room tomorrow if they can bear to parted from Fortson and friends. But they still haven’t done so. They’ve shown no intention of doing so all summer. And until over-the-tax teams starting waggling cash and picks incentives towards the Thunder for them to take on their bad contracts when the trade deadline comes around – just like teams did with Memphis all of last year – then they’re not going to use their cap room any time soon either.

The obvious question is why. Why would the Thunder not use this massive potential asset? Why would they turn down the opportunity to be one of the few buyers in such a seller’s market? Why weren’t they in there soliciting players like David Lee, Paul Millsap and Ben Gordon, using this prime opportunity to add one more significant piece to an already impressive young core? Did they whiff on an opportunity? Were they mismanaged?

No, I don’t think so. As far as I see it, it was a combination of two things;

1. Truly quite a poor free agency class. The three aforementioned players were probably the pickings of the market, and two of them were restricted, which would have made the Thunder heavily overpay to get them. They also would have had to bid outrageously to outbid the Pistons for Gordon, since Detroit themselves overpaid him, and while there’s no real evidence to suggest that Oklahoma City attempted to get Gordon, there’s also no real evidence that they should have done.

2. They don’t have a whole lot of money. Having cap space and having money are not really the same thing.

Oklahoma City aren’t a big-budgeted franchise. As mentioned above, they have the league’s smallest payroll, and spent all of last year trimming the remnants of Seattle’s payroll. Attendance for the new franchise has been impressive in the early going, but the $75 million that it cost to move the team – combined with the $325 million that it cost to buy it – seems to have stymied the Thunder’s spending on players. They’ve signed Nenad Krstic for three years and unsuccessfully tried to trade for Tyson Chandler’s big contract, but that’s been about it. And it isn’t long until they’re going to have to pony up for Kevin Durant’s max contract. (That is, unless they trade him before then. Although that might be hard to do, since apparently he’s difficult to give way for free.)

But is this unwillingness to spend limited to the Thunder only? Quite what is the difference between spending during this summer’s recession and during last summer’s honeymoon period? Let’s look at some more numbers.

Listed below are the future salary commitments for all NBA teams, including this season, but not including luxury tax payments. Note: for the purposes of consistency, all options and partially guaranteed contracts are assumed to be being paid in full. Even those that won’t be.

1st: Orlando Magic – $317,268,369
2nd: Los Angeles Lakers – $256,433,829
3rd: Toronto Raptors – $244,926,542
4th: New Orleans Hornets – $238,288,724
5th: Golden State Warriors – $234,876,874
6th: Dallas Mavericks – $228,559,817
7th: Philadelphia 76ers – $225,715,686
8th: Washington Wizards – $217,956,499
9th: Detroit Pistons – $216,397,593
10th: Utah Jazz – $211,782,244
11th: Denver Nuggets – $209,996,915
12th: Cleveland Cavaliers – $197,756,154
13th: Portland Trail Blazers – $197,607,482
14th: Indiana Pacers – $189,539,684
15th: Sacramento Kings – $182,546,117
16th: Milwaukee Bucks – $181,912,234
17th: Atlanta Hawks – $181,775,571
18th: Charlotte Bobcats – $180,263,002
19th: Boston Celtics – $172,718,480
20th: Chicago Bulls – $169,916,272
21st: Phoenix Suns – $169,532,243
22nd: San Antonio Spurs – $168,787,128
23rd: Minnesota Timberwolves – $165,310,707
24th: Los Angeles Clippers – $157,306,417
25th: Houston Rockets – $147,199,150
26th: Memphis Grizzlies – $127,671,869
27th: New York Knicks – $124,240,768
28th: Miami Heat – $121,060,368
29th: New Jersey Nets – $118,253,823
30th: Oklahoma City Thunder – $109,551,956

Total = $5,565,152,517. Or, to put it in words: five billion, five hundred and sixty five million, one hundred and fifty two thousand, five hundred and seventeen dollars.

(Makes you feel a bit weird to see it all totalled up like that, doesn’t it?)

And now, the same statistic, but from this time last year. The following is the future salary commitments for all NBA teams as of October 26th 2008;

1st: Orlando Magic – $294,700,756
2nd: Washington Wizards – $289,258,879
3rd: Philadelphia 76ers – $280,843,432
4th: Golden State Warriors – $266,578,475
5th: New Orleans Hornets – $259,494,157
6th: Dallas Mavericks – $256,486,158
7th: Charlotte Bobcats – $241,276,414
8th: Milwaukee Bucks – $240,182,828
9th: Sacramento Kings – $238,980,548
10th: Chicago Bulls – $233,647,431
11th: Cleveland Cavaliers – $230,050,946
12th: Boston Celtics – $227,210,745
13th: New York Knicks – $223,651,682
14th: Los Angeles Lakers – $218,983,731
15th: Denver Nuggets – $218,283,798
16th: Utah Jazz – $216,382,116
17th: Phoenix Suns – $215,488,477
18th: New Jersey Nets – $213,824,140
19th: San Antonio Spurs – $196,644,633
20th: Toronto Raptors – $194,241,647
21st: Los Angeles Clippers – $193,352,090
22nd: Minnesota Timberwolves – $192,651,934
23rd: Indiana Pacers – $178,713,794
24th: Miami Heat – $174,614,367
25th: Houston Rockets – $170,637,835
26th: Detroit Pistons – $165,711,468
27th: Atlanta Hawks – $157,119,737
28th: Memphis Grizzlies – $146,551,493
29th: Portland Trail Blazers – $133,235,971
30th: Oklahoma City Thunder – $121,422,133

Total: $6,390,221,815

Difference between 2008/09 and 2009/10: $825,069,298

[Note: none of these figures are guaranteed to be 100% accurate, because I’ve reverse-engineered them, but at worst it’s 98.5%. Also note: the $158,312,000’s worth of extensions given to Danny Granger, Jason Maxiell, Martell Webster and Andrew Bynum were signed after October 26th 2008, and therefore weren’t counted towards their team’s totals above. Nor is the $18 million that reappeared on Portland’s cap for Darius Miles. Similarly, LaMarcus Aldridge’s extension from last week is not included, because I don’t know what it is yet.]

$825 million is a lot of freaking money, even when split over 30 big-money franchises. That figure alone highlights the difference in spending between this year and last. But here’s another way of looking at it.

This summer, $1,275,302,921 of new player salary was given out. That total includes minimum salary deals, rookie scale contract, extensions……everything.

Last summer, however, $1,885,122,482 of new player salary was given out. That’s an decrease of $609,819,561 in new expenditure from one summer to the next. And that’s a lot.

Of course, there are mitigating factors for that. The poor 2006 Draft class has had something to do with it; as I mentioned here, only three players have gotten extensions from that draft class, and only a couple more have a chance of getting one. The 2010 free agency market is another huge factor (one that you may not have heard of, due to the minimal press coverage its received), and many teams are trying to avoid clogging their cap in eager anticipation of the impending free agency anti-climax coming up next offseason. When that day comes, spending should ramp up again, and the current contingency plans for it may well explain some of the decline in salary expenditure.

But more than anything, it appears that the economy’s affect on player spending has not been overstated. Working purely on averages, NBA teams have $20 million less on players this summer than they did last summer, a large amount of money regardless of the number of years that it is spread over. Times are tough, and we’re all having to make small sacrifices right now. (Personally, I’m forgoing all haircuts. They’re too expensive anyway.) The NBA is no different; as we’ve now seen, it’s stopped spending like it used to as well.

And so that might explain why the Thunder picked Ryan Bowen over Paul Millsap.

Posted by at 12:35 AM

12 Comments about Sam Presti’s Survival Strategy In A Post-Apocalpytic Dystopian Nightmare

  1. chiaone26 October, 2009, 3:16 pm

    I'm not quite willing to write off Durant based on his abysmal +/- and Roland numbers. I don't claim to understand advanced basketball metrics, but it seems his PER and Usage Rates are quite good. Couldn't this just mean that his teammates are even worse than advertised? Or is his defense really that bad?

  2. Chris26 October, 2009, 3:49 pm

    I didn't read the article yet, but the picture at the top freaking owns.LOL

  3. Marko26 October, 2009, 7:34 pm

    Good analysis. While I don't know what Presti is thinking, it made little sense for Oklahoma to use its cap scape this year. Their bad contracts are coming off next summer, while their exciting young core will still be on rookie deals. So, why rush things? It made much more sense to give Durant, Westbrook, Harden & Green one more year to gel and develop, after which they could add a solid veteran free agent to complement them.

  4. Ebomb26 October, 2009, 7:48 pm

    If the Thunder had completed their buyout of Earl Watson (saving them $3.125 million; for argument's sake, let's assume that it could have been done earlier than July 17th), not signed James Harden, B.J. Mullens and Serge Ibaka until their cap space had been used. At least argue with proper facts, 1st round draft picks have cap holds for the slot they were picked in regardless if a team delays signing them, you can't just wait to sign your rookies and use the cap space. Have a look at the CBA to learn from your mistake.

  5. Sam26 October, 2009, 8:30 pm

    Marko's right on this one…The team is still developing and even if they had overpaid for a guy like Lamar Odom or Shawn Marion, they weren't going to be drastically better (speaks to the crap-ness of the free agent class). When coupled with the fact that they're going to have to extend Durant and Green soon, and that next year's free agents are substantially better next year from top to bottom, I think that's why the didn't budge.(Also, I think Presti wants to see what he has with the Thunder, and I don't think you can do so during a PGs rookie year…he'll have a much better idea on what types of players he needs to bring in after the team has another year together with Westbrook making the leap, as a lot of 2nd year PGs do.)

  6. Sham26 October, 2009, 9:52 pm

    “At least argue with proper facts, 1st round draft picks have cap holds for the slot they were picked in regardless if a team delays signing them, you can’t just wait to sign your rookies and use the cap space. Have a look at the CBA to learn from your mistake.”

    Read it again. Specifically these bits:

    “To that total, add the cap holds of $3,336,800 for Harden and $933,500 for both Mullens and Ibaka”


    “They then followed tradition by signing their three first rounders to 120% of the scale, boosting those earlier figures of $3,336,800 and $933,500 to $4,004,160 and $1,120,200 respectively”

    Condescending someone for being wrong, when actually they’re right, and when you’re the one who didn’t read them properly, is pretty much as fail as it gets.

  7. pookeyguru27 October, 2009, 2:56 am

    Gotta tell ya Sham, I thought the same thing Ebomb did when I originally read the first part (about just keeping Harden, Ibaka and Mullins at their cap holds).But, that makes sense too. Glad I kept reading before I commented. (I figured there was an explanation and I missed it. You know too much about the salary cap to not know 1st round picks are cap holds.)

  8. Sham27 October, 2009, 4:59 am

    I was nicknamed Pooky once. True story.

  9. pookeyguru27 October, 2009, 5:28 pm

    Good thing my name is pookey then. 🙂

  10. Schad27 October, 2009, 10:58 pm

    You are and always will be a magnificent bastard, Pooky. The original one, not this guru fellow.

  11. Rahsaan28 October, 2009, 2:09 pm

    Wow, looking at the totals for the Knicks really puts the Donnie Walsh era into perspective.From 13th: New York Knicks – $223,651,682to 27th: New York Knicks – $124,240,768is an impressive drop whichever way you look at it. Even if involves starting Jared Jeffries.

  12. Sham29 October, 2009, 5:51 am

    Wait, they didn't have a cap hold on Chris Wilcox. New York did. No idea why I wrote that. Sorry.