The Truth About “Parity” in the NBA
May 8th, 2014
[Originally posted on Hoopsworld, 5th November 2013.] In February 2010, NBA commissioner David Stern spoke ominously of the league’s forecasted $400 million loss that financial year, as well as hundreds of millions more in losses over the previous few seasons. His words were one of the earliest warnings of an impending lockout, a threat that became a reality 16 months later. Financial inequalities and a broken system supposedly saw 22 out of the 30 NBA franchises losing money, and something had to be done to install some parity. Three months after Stern spoke, the NBA ratified the sale of the New Jersey Nets to Mikhail Prokhorov. Parity, it is said, is supposed to level the playing field between the large- and small-market teams. The reality of this market inequality is an unavoidable one, founded in socioeconomic factors far outside of the NBA’s control. It is what it is. The NBA’s self-imposed duty is to level the playing field within its control as much as possible. They do this in various ways. The draft, of course, is one – parity is not just financial remuneration, but also the opportunity for all teams to compete on the court. There is also, as of the new CBA, a new revenue sharing system ostensibly designed to make big brother pay for little brother, a significant development in the NBA’s hitherto limited revenue sharing history. And there’s the concept’s most public weapon – the luxury tax. Since its inception in 2001, $923 million has been spent in luxury tax by 24 franchises. Of that $923 million, some $568 million has been spent by only four of those franchises – the Dallas Mavericks, New York Knicks, Portland Trail Blazers and Los Angeles Lakers. That is one seventh of the teams spending three fifths of the money, […]
Why NBA Teams Sign Players They Don’t Want
May 8th, 2014
[Originally posted on Hoopsworld, 29th October 2013.] The vast majority of players signed for training camp are signed to contracts without any guaranteed compensation on them. This, certainly, is no surprise, as it has long been known that most players signed for training camp are not expected to make the team. A few players have fairly nominal guaranteed portions – for example, Dee Bost received $50,000 from Portland, Dewayne Dedmon $25,000 from Golden State, and Trent Lockett $35,000 from Sacramento. Most, however, do not. Teams are not involved in bidding wars for the Trey McKinney-Jones and Carlos Morais types, and thus there is no incentive to give any guaranteed money away. Not all unguaranteed contracts are the same, however. Some utilize a contract provision called Exhibit 9. Unless you’re an agent, it is a little known device of potentially huge importance. Exhibit 9 of the Uniform Player Contract is applicable only to those summer contracts fully unguaranteed and for only one season in length. Its purpose is to reduce a team’s liability in event of injury to a player it intended to sign only for training camp. It states thusly: if the player is injured as a direct result of playing for the team and, accordingly, would have been entitled but for this Exhibit 9 to compensation, the team’s sole liability shall be to pay the Player $6,000 upon termination of the Player’s Contract. The operator ‘sole liability’ is vital here. Without an Exhibit 9, the Uniform Player Contract normally calls for teams to pay any ‘reasonable hospitalization and medical expenses’ for players injured whilst directly participating in team activity, whilst also guaranteeing the payment of their compensation, however unguaranteed it was, until such time as they are fit to return to play, up to a maximum of the end […]
The False Allure Of Multi-Year Contracts
May 8th, 2014
[Originally posted on Hoopsworld, 15th October 2013.] Unguaranteed or partially guaranteed final seasons are quite the trend nowadays in the NBA, and they have these days almost completely superceded team options. In fact, excluding rookie scale contracts, there are only eight team options in the entire league, belonging to Chauncey Billups, Darius Morris, Timofey Mozgov, Marreese Speights, Carrick Felix, Chandler Parsons, Jae Crowder and Rodney Williams. All other contracts referred to in the press as ‘team options’ are, in fact, unguaranteed salaries. There are very few instances in which contracts must be guaranteed. In fact, there are only two; the first year of a signed-and-traded contract, and the first two years of a rookie scale contract (which must be guaranteed for a minimum of 80 percent of the scale amount). Nothing else has to be guaranteed. It is self evident why so many contracts are nonetheless fully guaranteed – players want that, and teams want players to want them. Yet the unguaranteed contract fad has its basis in logic. Essentially, unguaranteed contracts function much like team options do. However, there are some significant advantages to doing it in this way, which is why it happens. The differences: 1) Non-rookie scale team options have to be decided upon by the final day of the previous season. Seasons change over on July 1st, and thus team options must be decided on or before June 30th. This is not the case with unguaranteed contracts, which either have guarantee dates that can be negotiated to different dates, or which have no guarantee date at all. A lot of unguaranteed contracts have some guaranteed money, becoming fully guaranteed upon a certain date, or no guaranteed money at all becoming slowly guaranteed upon several dates; for players earning the minimum salary it is often the latter, […]
The Value of Minimum Contracts In The NBA
May 8th, 2014
[Originally posted on Hoopsworld, 7th October 2013.] The most fun part of preseason is being able to get wildly carried away with the results and performances in the mostly meaningless games. This is particularly true of the performances of individual players who simply were not expected to shine, but did. Two such players have already shown their faces, in Houston’s Omri Casspi and the L.A. Lakers’s Xavier Henry. Casspi shot 9-10 for 20 points on his debut, whilst Henry topped that with 29 in his, an impressive amount for a player whose career high to this point is only 19. Whilst this level of production is obviously not sustainable, Casspi and Henry are set to earn only the minimum salary next season. Casspi’s is fully guaranteed, but Henry’s isn’t even guaranteed for one single dollar. These two players, then, have shown they could potentially be valuable contributors for as good of as value as is possible. Casspi has struggled since his rookie season when he showed true promise as a free roaming off-the-ball offensive player, but who started to succumb to similarly free roaming tendencies defensively. Henry, meanwhile, was nothing short of poor in his first three seasons, struggling badly to make a shot from any portion of the court, not being able to create any, and not being consistent with his potentially good defence. There’s a reason these players were available for so cheap – they weren’t working out, and multiple teams had given up on them ever doing so. However, this doesn’t mean the players are, or suddenly became, talentless. Casspi and Henry were first-round picks as recently as four and three years ago, respectively, and are 25 and 22 years old. There is still some talent in the fire. Someone just needs to throw a log on […]
Ten Of The Worst New Contracts This Offseason
May 8th, 2014
[Originally published on Hoopsworld, 30th September 2013.] The new Collective Bargaining Agreement is designed to save teams from themselves, and make reckless spending far harder to do. It works – most free agency contracts are now, frankly, well priced. But not all of them. After taking a look at the best contracts of the offseason last week, here, in no particular order, are ten of the worst ones from this past offseason: Al Jefferson – Charlotte Bobcats The harsh but undeniable reality is that the Bobcats, regardless of the presence of Michael Jordan, have to pay over the odds on the free agent market to compensate for their franchise’s position. They’ve done that with Al Jefferson, paying him three years and $40.5 million, including a player option in the third year. That player option makes Jefferson extremely difficult to trade until the summer of 2015. And while they haven’t necessarily signed him to trade him, a team with such little foundation as Charlotte must position themselves to permit that as soon as possible. They haven’t. Instead, they’ve paid Jefferson to be the cornerstone of the team for at least the first two years of the deal, which he simply isn’t. Jefferson, a poor defender, is also an inefficient volume scorer who contributes on only one end and leads on neither. It looks like a strong commitment to the present, just as Jefferson looks like he is a centerpiece to his team. But appearances can be deceptive. Josh Smith – Detroit Pistons As with most of the players on this list, it is not necessarily the price paid so much as it is the purposelessness of paying it. Detroit, like Charlotte, has to pay an invisible tax (manifested through inflated contracts) to attract free agents. This is a reality that has […]
Ten Of The Best New Contracts This Offseason
May 8th, 2014
[Originally published on Hoopsworld, 23rd September 2013.] The new Collective Bargaining Agreement is designed to save teams from themselves, and make reckless spending far harder to do. It works – most free agency contracts are now, frankly, well priced. Here, in no particular order, are ten of the best ones from this past offseason: Paul Millsap – Atlanta Hawks Millsap signed with Atlanta for two years at $9.5 million per year, a significant chunk of cap space for a team who have worked so diligently to cut as much payroll as possible. Reversing the direction of the franchise is initially tough to reconcile, yet it is worth it because of how good of value his deal represents. Millsap is signed to an amount comparable to his talent, for a short period of time. His deal only being two years long is of big help to the Hawks, both on their court and potentially on other teams. He provides Atlanta with the talent boost that will keep them out of the cellar – if you want bums on seats, you need that – while this contract makes him extremely tradeable. Millsap is a valued commodity around the league as a quality, versatile, two-way role player, and by getting him at the right price, Atlanta put themselves in a position to take advantage of that. And as long as they do, he’ll help them significantly as a player. Even rebuilding teams need that. Matt Barnes & Darren Collison – Los Angeles Clippers The two are listed together as they were both acquired via the non-taxpayer mid-level exception. On his first substantial multi-year contract, Barnes will earn $3.25 million next year with one further guaranteed year, while Collison gets the remaining $1.9 million. Collison comes from Dallas where he was somewhat exposed as […]
