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Anthony Morrow’s impending free agency
May 10th, 2010

Of all the possible free agents this upcoming offseason, Golden State’s Anthony Morrow is one of the restricted free agents that is garnering the most attention amongst fans. Well, amongst Bulls fans he is, at least.1

Morrow only really does one thing; he shoots jump shots. He is not much of a ball-handler, nor much of a defender, nor much of an athlete, nor much of a slasher, nor much of a finisher around the basket. But he does own a jump shot. A really, really good jump shot. A really, really, really, really good jump shot. A jump shot so good that it spawned its own cult. And in this current NBA era, you can never have too many shooters.

If you need a shooter, you could always sign Casey Jacobsen. He’ll need work this summer. You could also sign Desmon Farmer, Billy Thomas, Marcus Vinicius, Nikoloz Tskitishvili, or some old fringe NBA veteran who would happily sign for the minimum and relish the chance to sit on an inactive list. Worst case scenario, you could sign Ryan Ayers. But a lot of people want Morrow, for the simple fact that he has 47% and 46% from three-point range in his two NBA seasons. Can’t say I blame them. I want that too.

However, if you wish to sign Anthony Morrow, there’s some things you should know.

Morrow went undrafted out of Georgia Tech, and, after hitting some jump shots for the Miami Heat in summer league 2008, the Warriors signed him to a two-year minimum salary contract with conditional guarantees. At the time, they probably didn’t think he’d be a significant player; as it’s turned out, however, he’s been one of the brightest spots in a two-year cycle of struggle. Morrow has performed admirably and shown himself to be a decent NBA-calibre player. Golden State now wishes they’d given him a third year.

Morrow is to be a free agent this summer. There’s no getting around that, because he is not eligible for an extension. He has played only two years in the league, and teams can make players with three years or less experience into restricted free agents, whether they like it or not, by extending a qualifying offer.2

Because Morrow’s previous (i.e. current) salary is only for the minimum salary of $736,420, the qualifying offer that Golden State must offer to make him restricted will be for $1,029,389, which is the value of next year’s third-year player minimum ($884,293) plus $175,000.3 If they offer it to him, he becomes a restricted free agent. If they don’t, he can walk free to pastures anew. Since letting him walk free is not a good idea, they will offer it to him. This much is certain.

Once restricted, Morrow will have six options. He can either:

a) re-sign with Golden State for the value of that qualifying offer,

b) re-sign with Golden State for between one to five years, and to an amount that begins at somewhere between the minimum salary and the value of the Mid-Level Exception,

c) sign an offer sheet with another team within the same parameters (let’s forget the Arenas rule for a minute, as it is revisited below)

d) get signed and traded somewhere,

e) sign a contract with a non-NBA team, or

f) retire from the game and run a country pub.

Because Morrow has spent two years with the same team without changing teams as a free agent, he is an Early Bird free agent. This means that Golden State can re-sign him using the Early Bird Exception.

As you might presently yourself fully be aware of, teams with full Bird rights can go over the cap to re-sign their own free agents.4 This is because of the Larry Bird Exception, a salary cap exception that allows a team to re-sign any of its free agents that qualify for the exception for anything up to and including the max, and as the name might suggest, the “Early Bird Exception” is kind of an entry-level version of the Larry Bird Exception. To qualify for the Larry Bird Exception, a player must have gone three seasons without changing teams as a free agent.5 And to qualify for the Early Bird Exception, a player must have gone two seasons without changing teams as a free agent. The latter applies to Morrow.

The Early Bird Exception allows a team to re-sign a player to a contract of between two to five years in length, that can start as low as the minimum or as high as the value of the mid-level exception, with raises of up to 10.5%.6 The key point of note there is that a team can re-sign its own free agent for the value of the full MLE, and they don’t have to use the MLE to do it.7 The Early Bird exception IS a salary cap exception in itself, just as the MLE is; they don’t need to use another one.

Back to Morrow. Points (A), (E) and (F) are not going to happen. The qualifying offer is insufficiently small, non-NBA teams can’t compete financially with what Morrow can make in the NBA, and the country pub market is not the one to get into in this tough economic climate. So let’s ignore them for now, and deal with the other three.

Once he is made restricted, Morrow can do one of three things;

1) sign an offer sheet with another team and see if Golden State matches it,8
2) work out a sign-and-trade with another team and take out the risk factor of restricted free agency, or
3) re-sign with Golden State for however much he can squeeze out of their fluctuating ownership.

However, there’s another catch. Whichever of the three he does, Morrow cannot sign for a contract that starts at higher than the value of the MLE. This is due to what is known informally as the “Gilbert Arenas Rule”.

The Gilbert Arenas Rule is so named because of the case of Gilbert Arenas back in the summer of 2003.9 Arenas was in the same situation as Morrow; his first contract was a two-year minimum, and when it ended, he became a restricted free agent. However, Arenas was already a star by the time of his free agency, so when Washington signed Arenas to an offer sheet that summer, they signed him to a contract that started at a price much bigger than the MLE.

From what we learnt above, with the Morrow case, we learned that played with only two years of experience are only Early Bird free agents. We also learned that the Early Bird exception allows you to re-sign players for up to the value of the full MLE in the first year, but not for more than that. Furthermore, it is of course self-evident that the MLE is equal to the value of the MLE; therefore, when Washington signed Arenas to an offer sheet for $19 billion in the first year or whatever it was,10 then Golden State had no means with which to match it. Gilbert was a restricted free agent, which meant Golden State had the right to match any offer if they could…but they couldn’t. They did not have the necessary salary cap mechanisms with which to do so. The Early Bird exception wasn’t big enough, the MLE wasn’t big enough, and they didn’t have any cap room. So they lost out, and Gilbert went to Washington.11

This was a trifle harsh, so in came the Arenas rule. It means that players with only one or two years experience cannot be signed for contracts starting at more than the value of the MLE; the reason for that is that the player’s current team will then always have a mechanism with which to match it, as they will always have at least that. It is possible to sign a player with only one or two years of experience to a contract that pays more than the value of the full MLE over the life of the contract;12 however, because the contract can only start at the maximum value of a full mid-level exception, the team with the matching rights then always has a mechanism with which to match. They can use their MLE if he’s a non-Bird free agent,13 and the Early Bird Exception if he’s an Early Bird free agent. Both of these, as we’ve seen above, can pay up to the MLE.

The Gilbert Arenas Rule has not been used since it was devised. No one has been good enough to be in a situation that applied. And Anthony Morrow won’t be the first, either, unless some GM out there goes for it. However, it nonetheless all pertains to Morrow’s situation.

If Morrow signs a deal with another team, that team must use their MLE to do it (or an equivalent amount of cap space). As we’ve seen, they can’t go over this amount. But if he signs a deal with Golden State, then they don’t need to use their MLE to do it. They can use the Early Bird Exception, which, as noted above, can go up to the value of the MLE.

And so this is how Golden State can re-sign Anthony Morrow and still have their full Mid-Level Exception.14

That whole lecture ignores the fact that Anthony Morrow and his 14.6 PER is not realistically a player deserving of an above-MLE contract. But since many of our peers continue to suggest it as a viable option anyway, it benefits us all if we at least assess the relative feasibilities of such a scenario.

If all else fails, Quentin Richardson will probably take the minimum.

 

Footnotes:

1 – It’s partly a Ben Gordon thing, and partly a Jannero Pargo thing. I was on board with the Pargo signing, but if you sign a guy to be a specialist shooter, and he shoots three times as many three-pointers as free throws, then he should at least have the common decency to crack the 28% mark on them. Anything less than that is just churlish.

2a – The exception to this rule, the only exception, is players who were on a first-round rookie scale contract, who had an option year declined. This means that players like Acie Law, Joe Alexander and Ian Mahinmi will not and cannot be restricted free agents this summer. They can also never be restricted free agents ever again, so even if Alexander (a two-year veteran) were to sign a one-year deal somewhere this summer, meaning that he would be only a three-year veteran during his second free agency stint in the summer of 2011, he cannot be made into a restricted free agent then either. This is what happened to Shannon Brown last year.

2b – Also note that people sometimes mistakenly believe that this rule applies only to second-round draft picks. It doesn’t. It applies to anyone except those mentioned in point 2a, regardless of their draft slot. Or lack of it.

3 – Qualifying offers are for 125% of the player’s previous salary, or for the relevant minimum salary plus $175,000, whichever is more. The exception is with first-round rookie scale contracts, for which each pick has its own defined QO, calculated as a percentage of the fourth year’s salary.

4 – This is a bastardized version of a far more complex procedure, but it will suffice here.

5 – The “without changing teams a free agent” caveat is important here; when a player is traded while under contract, their Bird rights are traded with them. This means that the Warriors can re-sign Devean George to the maximum salary this summer. Don’t mock that possibility until you can be sure it won’t happen.

6 – The Blazers once used the full Early Bird Exception on Joel Przybilla. Thought this was worth mentioning, but only as a footnote.

7 – This is the single most important point in the entire post.

8 – If a team signs Morrow to a contract when Morrow is a restricted free agent, that contract is termed an “offer sheet.” Before Morrow joins the new team, Golden State has seven days to exercise a right of first refusal. If they don’t do anything, then Morrow joins the new team after the seven days have passed. But if they decide to match the contract offer, Morrow then rejoins Golden State under the terms of the contract in the offer sheet, whether he wants to or not. This is the core of what restricted free agency is about. It’s a bit dictatorial really.

9 – An identical situation happened with the Cavaliers and Carlos Boozer the following summer. But no one has much sympathy for them, because they were trying to diddle the books and got caught out. So, the Arenas rule it is.

10 – $8.5 million, give or take.

11 – So as you can see, the case of Morrow is not the first time Golden State has rued not giving a player a third-year on their minimum salary contract. On the plus side, though, they did have the foresight to give three years to Monta Ellis. And Chris Taft. And Richard Hendrix. Although the latter two ended up costing the team over $1.5 million for only 17 games played. But you win some, you lose some.

12 – For details of how this works, view this. Although I warn you that this may be a waste of time, given that it has never happened to date.

13 – A “Non-Bird Free Agent” is the one year equivalent of the three-year “Larry Bird Free Agent” highlighted in footnote number 5. However, unlike the Larry Bird and Early Bird exceptions, the non-Bird exception entitles you to very little, and is rarely used.

14 – In hindsight, that sentence alone might have gotten it done. Never mind.

Facebook Comments

Posted by at 6:03 AM

3 Comments about Anthony Morrow’s impending free agency

  1. Jugs10 May, 2010, 8:22 am

    cool story bro

  2. Jerry10 May, 2010, 1:16 pm

    Nice breakdown. Spitting knowledge like only a few can…

  3. Travis12 May, 2010, 3:03 pm

    this is why ShamSports is indispensable