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Enormous Contracts Are the NBA’s New Reality

Nate Duncan looks at the money available for free agents this offseason to explain why the market is so hot.

Nate Duncan



It has been a relatively quiet first day of free agency as the market waits for big fish like Carmelo Anthony and LeBron James to bite.  But the few deals that have been signed have shocked many observers in both salary and length.  Notably, 30-year-old Marcin Gortat agreed to return to the Washington Wizards for a reported five-year, $60 million pact, Jodie Meeks agreed to three years and nearly $19 million with the Detroit Pistons, and the Golden State Warriors reportedly agreed with Shaun Livingston on a three-year deal for their full mid-level exception, although the last year is only partially guaranteed.  This morning it was reported that restricted free agent Avery Bradley agreed to a four-year, $32 million deal to return to the Boston Celtics, and C.J. Miles agreed to four years, $18 million with the Indiana Pacers.

While these contracts are far above the market rate for last year, the rising cap this year, the number of teams hording cap space and the increased number of teams looking to compete this year has significantly inflated the market compared to the last few post-lockout years when the cap remained relatively flat.

Bear with me if you will for a short gaming of what this offseason will look like.  Please note that this is not a prediction of where these players will land necessarily, but more of an exercise to get an idea of how much money will be left once the main players have found their destinations.  To do so, I went through the salary situations of all 30 teams starting with the updated salary situations from our Eric Pincus.*  The goal was to determine how much room they would have, either via exceptions or outright cap space.  Obviously such an exercise involved myriad assumptions such as which players’ cap holds will be renounced, which non-guaranteed players will be retained, ad infinitum.  Clearly, not all of these can be correct.  They will not be delineated here, as that is not really the purpose of the exercise.  The point is more to get an idea of the total amount of free agent money available.

*Eric’s numbers include cap holds that have yet to be renounced as well as a lot of non-guaranteed money that will likely be cut.

As we will see, not only are the Meeks, Livingston and Bradley deals in line with this year’s market, but the teams signing them might have even been smart to move on them so quickly.

The Big Fish

The first part in modeling the summer is accounting for where the major free agents will land.  Aside from where we have reporting to the contrary, the assumption will be that most if not all of the major free agents will return to their prior teams.  Because the market is so inflated, the incumbent team will often have to use the advantage of offering a fifth year, as only the prior team may do. Since many of those teams are over the cap with no way to replace those players, that seems the most likely scenario in these cases. This is especially so since most of the teams in this situation are trying to get better this year.

If so many players end up returning to their prior teams, that will cause more overall money to be spent due to many of those teams using Bird rights to re-sign those players by going over the cap.  If those players leave, then those teams likely will not have the spending power to replace those assets, while teams with cap room still must spend to at least 90 percent of the projected $63.2 million cap this year.*

*If a team does not spend that much, it must distribute the difference between its actual payments to players and the salary floor to the players on its roster via whatever formula the NBPA finds appropriate. This would most likely be pro rata based on how much the players on the team are already making.

On to the main players.

The Heatles

Reports have generally indicated that LeBron James will demand a maximum deal. Chris Bosh and Dwyane Wade may sign for the max as well, but it’s possible that they’ll re-sign for less. Udonis Haslem will also re-sign for less than his original salary, but probably for more years to make up the lost income.  Most estimates have floated the idea that the Miami HEAT could have around $10 million in space to sign free agents, plus the $2.7 million Room Exception for teams under the cap.

Carmelo Anthony

Anthony seems the most likely star to leave his prior team. This analysis will assume he goes to the Chicago Bulls, but the overall league market would be much the same if he goes to another new team. If he remains with New York, that leaves another team with cap space that must be filled and inflates the market even further.

Dirk Nowitzki

All reports have indicated he is going back to the Dallas Mavericks, likely for about $10 million per year.

Lance Stephenson

Because the Pacers have no way to replace him, the assumption will be he ultimately returns there despite reports of an impasse after Indiana offered him a five-year, $44 million deal.

Kyle Lowry

Reports have Toronto mulling whether to offer him a fifth year on a contract starting at $12 million per year. If that is indeed the offer, it is hard to imagine him leaving because there is no way he would get that kind of money as a 32-year-old free agent coming off a four-year deal.

Isaiah Thomas

We will assume he returns to the Sacramento Kings on something like an $8 million per year contract as a restricted free agent.  They too have talked about trying to get better this year, and if they lose him they would still be capped out with no other decent point guard on the roster and only the MLE to offer.  Given the amount of money available around the league, I am surprised Thomas isn’t being talked about for offers over $10 million per year.  Apparently teams are scared off by his size.

Trevor Ariza

It has long been predicted that Ariza will return to the Washington Wizards.  With Martell Webster going under the knife for back surgery, Otto Porter nowhere near ready to start (if he ever will be), and Marcin Gortat already paid, the Wizards will likely retain the 29-year-old Ariza as well using Bird rights. This too may be tougher than expected for Washington, given the other potential suitors for Ariza.

Restricted Free Agents

As reports of the Cleveland Cavaliers making a max offer to Gordon Hayward swirl, it appears very likely that Hayward, Eric Bledsoe and Greg Monroe will get maximum offers given the amount of space available around the league.  A maximum offer sheet for these restricted free agents will start at approximately $14.7 million. We will also assume that their incumbent teams will match such an offer sheet.  If, however, they do not, the Utah Jazz, Phoenix Suns and Detroit Pistons will all have an extra $14.7 million in cap room to use on other free agents since they are all below the cap.  Therefore, the ultimate destination of these players does not really affect the total amount of money available in the system.

Meanwhile, it seems very likely that Chandler Parsons has some sort of arrangement to return to the Houston Rockets, or they would not have let him out of his contract a year early when his signing an offer sheet as a restricted free agent could potentially scuttle their free agent plans.  Because he still has a low cap hold of $2.9 million, the Rockets will still be able to sign free agents up to the cap before exceeding the cap to re-sign him with Bird rights.  The assumption will be that he returns on something approaching a $10 million deal, presumably with a bit of a discount priced in since the Rockets did him a favor by not exercising their team option for under $1 million for 2014-15.

Edit: To be clear, under this scenaio Parsons would not actually sign his new deal until after the Rockets sign additional players.  Signing it before the Rockets sign anyone else would use up their Room prematurely.

Teams With Cap Room

Now that those assumptions are in place and most of the major free agents are accounted for, here is my projection of the remaining available cap room around the league.

Philadelphia 76ers–$30.9 million

Orlando Magic–$22 million*

Los Angeles Lakers–$21 million

Phoenix Suns–$20.9 million

Charlotte Hornets–$18 million

Atlanta Hawks–$16.1 million

Dallas Mavericks–$16 million

Cleveland Cavaliers–$15 million

Utah Jazz–$13.8 million

Milwaukee Bucks–$13.1 million

Miami HEAT–$10 million

Houston Rockets–$7 million*

Detroit Pistons–$2.8 million

*The Orlando projection includes the two-year, $9 million contract given to Ben Gordon.  Houston’s includes Jeremy Lin on the roster for now. Although they will likely move him, it would be to another team with cap space so it would not affect the total amount of money in the system.

Look at those figures again.  Even with most of the major free agents gone, there could remain as much as $218 million in cap space around the league.  That number could of course change based on the potential destinations for the big boys, but it represents a reasonable proxy for what is out there.*

*While teams like Philadelphia, Orlando and Utah may not spend all the way up to the cap on their own free agents, the 90 percent salary floor means they are incentivized to take on bloated contracts from other teams in exchange for assets, which would open an equivalent amount of cap space elsewhere in the league.

Available Exceptions

Of course, that is nowhere near the maximum amount of money available around the league.  Based on the math and what we know of teams’ luxury tax tolerance, quite a few teams will have the full mid-level exception to spend.  By my projections, Boston, Denver, Indiana (partial use), Los Angeles Clippers, Memphis (likely Mike Miller), Minnesota, New York (if Carmelo leaves), Oklahoma City (possibly a partial use), Portland, San Antonio and Washington (depending on how high Ariza’s contract goes) could use the MLE.  That is 11 teams. If we conservatively assume that six of them will use the full MLE and another two use part of it, that is another $35 million or so in the system.

Many teams could also use the $2.1 million Bi-Annual Exception. These include Boston, Los Angeles Clippers, New York, Portland, and San Antonio.* If four of the six use it, that’s another $8.4 million.

*If Chicago can execute a sign-and-trade for Anthony or another target, they will likely use the MLE and BAE as well.  Edit: A previous version of this article stated that Washington could also use the BAE, but it was used on Eric Maynor last year.

Given Brooklyn’s recent spending habits, it will likely use the $3.3 million Tax-Payer MLE (MMLE).

Finally, many teams trying to improve with cap room could use their $2.7 million Room Exception.  These include Atlanta, Chicago, Cleveland, Dallas, Detroit, Houston, Los Angeles Lakers, Miami, Milwaukee, New Orleans (lost other exceptions due to going under the cap for the Omer Asik deal) and Phoenix.  That is another 11 teams. All but Atlanta and Milwaukee of this group seem certain to use theirs, so let’s conservatively say nine teams.  That is another $24.3 million.*

*I assumed that cap teams Orlando, Philadelphia and Utah would not use their Room Exceptions.

That now leaves us with approximately $289 million in available money—an absolutely enormous sum.

Who Gets the Money?

Now remember again that this $289 million is available to be spent with almost all of the best free agents off the market.

In the scenario I’ve modeled, here are some of the remaining notable free agents:

Pau Gasol

Spencer Hawes

Luol Deng

Channing Frye

Ed Davis

Boris Diaw

Josh McRoberts

Shawn Marion

Paul Pierce

Patty Mills*

Patrick Patterson (RFA)

P.J. Tucker (RFA)

Mo Williams

Vince Carter

Thabo Sefolosha

*Mills has a shoulder injury that will keep him out until at least midseason, and is widely assumed headed back to San Antonio.

Certainly other players could get paid this offseason, but that list is incredibly unexciting.  And yet in this scenario $289 million, plus minimum salaries, is going to be split up among these players and even lesser lights. The choice between massively overpaying older players like these and investing in maximum contracts for players like Hayward, Bledsoe and Monroe is an obvious one.  That is why those players will almost certainly get maxed out.

What is Market Value?

Given the realities of the market, the Livingston, Meeks and Bradley contracts do not look nearly so bad. Then consider that the salary cap is projected to increase a further $4 million next year, and may see even higher increases in the years after that as new national and local television deals kick in.* Even the Gortat contract seems to be right about what he would have gotten on the open market in terms of annual value.

*Especially with respect to the national deal, the NBA may elect to mute a possible huge one-year jump in the cap by structuring the national TV contract to increase in value over its lifetime rather than doubling the previous contract in year one.

Nevertheless, the mere fact a contract is market price based on what other teams are willing to pay does not necessarily make it a good deal.  This is especially so for players like Gortat, Lowry and Ariza who will likely re-sign with their old teams.  With the market so competitive, the fifth year becomes critical for both player and team, especially when a player is on his third long-term contract.  With the amount of competition on the market, length of contract rather than size will become more important than ever.  We may see smart teams move ever more in the direction of shorter offers for more money to free agents when they are signing players below the upper crust.

For the first three offseasons after it was enacted, many cited a depressed free agent market as the reality of the 2011 CBA.  It is now clear that was an artificial reality imposed by the flat cap required to reduce the players’ percentage of BRI into the agreed-upon 49-51 percent range from the previous CBA’s 57 percent, as well as bloated longer contracts left over from the previous CBA. The shorter contracts under this new CBA will put many more free agents on the market every year. The new breed of general managers are much smarter about maintaining flexibility. The cap is now rising, and should continue to do so beyond what many have imagined. Get used to three years, $19 million as a relative “bargain” for Jodie Meeks for the foreseeable future.  It is the NBA’s new reality.


Nate Duncan is an NBA analyst and attorney. He writes regular features for Basketball Insiders and chats weekly at 11 Eastern on Tuesdays.




Monte Morris: Waiting for his Chance

Nuggets two-way guard Monte Morris talks to Basketball Insiders about his time with Denver.

David Yapkowitz



Monte Morris has only seen action in three NBA games with the Denver Nuggets this year. While most players who receive little playing time spend most of their time at the end of the bench cheering their teammates on, Morris’ situation is a bit different. He’s spent the majority of his rookie year in the G-League.

The NBA’s minor league has grown tremendously since it’s inception in 2001. All but four NBA teams have a G-League affiliate now. There are plans for the New Orleans Pelicans to have their own team by next season, and NBA Commissioner Adam Silver has spoken about having a team in Mexico.

As part of the NBA’s new collective bargaining agreement, they expanded the partnership between NBA teams and their G-League affiliates even more by adding two-way contracts. Essentially creating a 16th and 17th roster spot, two-way players are allowed to split time between an NBA team and the G-League.

For Morris, two-way contracts are an added opportunity for players to make an NBA roster.

“It’s a good chance for guys to make a roster, especially second-round picks to get a chance,” Morris told Basketball Insiders. “With two-way contracts, I feel like they’re going to get a lot better as far as rules and things like that go. This is the first year so they’re testing it out, but it’s a good opportunity. It’s a blessing at the end of the day.”

Morris was drafted by the Nuggets with the 51st overall pick in last summer’s draft. Second round picks are not afforded the guaranteed contract stability that comes with being a first-round pick. He was tabbed for a two-way contract almost immediately after he was drafted.

He had a stellar four years of college at Iowa State, where he was one of the top point guards in the nation as a senior. He also had a strong showing in Las Vegas with the Nuggets’ summer league team.

The Nuggets were a little crowded in the backcourt to begin the season with Jamal Murray and Emmanuel Mudiay ahead of Morris in the rotation. When Mudiay was injured and out of the rotation, Mike Malone opted to go with Will Barton as the backup point guard. The Nuggets’ trade deadline acquisition of Devin Harris pushed Morris farther back on the depth chart.

“The toughest thing is just staying mentally tough, staying true to yourself, and developing your own craft,” Morris told Basketball Insiders. “Just not losing that self-confidence cause you might not play when you go up. When you come down here [G-League], take advantage of it, have fun, and keep getting better.”

Morris has definitely done his part to stand out in the G-League. The Nuggets are without a sole affiliate, so they’ve used the Houston Rockets G-League team, the Rio Grande Valley Vipers, to get Morris additional experience. In 36 games with the Valley Vipers, he’s put up 18.2 points per game on 47.8 percent shooting from the field, 35.6 percent from the three-point line, 4.6 rebounds, 6.6 assists, and 1.8 steals.

He believes that if called upon, he can be a major contributor for the Nuggets. There are certain aspects he can bring to the team and he thinks it’s possible for him to play with Murray in the backcourt together.

“I think I can bring energy off the bench. I feel like me and Jamal Murray, the way the game is going you can play small ball. I feel like I can bring pace to the game and play defensively,” Morris told Basketball Insiders. “I like getting after it when I’m up there with those guys on defense and getting guys open shots. I know we got a lot of scorers, my goal would be getting everybody their shots.”

Morris has been able to show he can produce at the NBA level, even if it’s a small sample size. On Feb. 9, only the second game he’s played in with Denver, he scored ten points on 4-5 shooting from the field, dished out six assists, and nabbed three steals against the Rockets.

Players on two-way contracts are allowed a maximum of 45 days with the NBA team. Those days are not solely game days; they include practices and travel days as well. Once those 45 days are up, NBA teams have the option of converting a two-way contract to a standard NBA deal provided they have roster space.

If a player uses up the 45 days and does not have their contract converted, they go back to the G-League. They can rejoin their NBA team once the G-League season ends but are not able to play in the playoffs.

For now, Morris is just biding his time, waiting for his opportunity. He’s staying ready for when the Nuggets might need him. In the meantime, he’ll continue to take advantage of what the G-League has to offer.

“It’s definitely a good starting point. It’s just all about how guys attack it on and off the court,” Morris told Basketball Insiders. “It’s just being a pro and not losing confidence in your ability when you go up and don’t play. You just got to be ready, you’re really one injury away, one call away to step on and have to play.”

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Middleton, Bucks Aiming To ‘Lock In’ As Season Comes To Close

Spencer Davies catches up with Milwaukee Bucks swingman Khris Middleton in a Basketball Insiders exclusive.

Spencer Davies



Basketball Insiders had the chance to chat with Khris Middleton about the direction of the Milwaukee Bucks as the season comes to a close.

You guys won three out of four before you came into Cleveland. What was working during that stretch?

Just being us. Doing it with our defense, playing fast-paced offense. Just trying to keep teams off the three-point line. We haven’t done that. We didn’t do that [Monday] or two games ago, but it’s something we’ve just gotta get back to.

With the offense—it seems like it’s inconsistent. What do you think that’s got to do with mostly?

Just trying to do it by ourselves sometimes. Standing, keeping the ball on one side of the floor. We’re a better team when we play in a fast pace. And then also in the half court, when we move the ball from side-to-side it just opens the paint for everybody and there’s a lot more space.

For you, on both ends you’ve been ultra-aggressive here in the last couple weeks or so, does that have to do with you feeling better or is it just a mindset?

I’ve been healthy all year. Right now, it’s the end of the season. Gotta make a push. Everybody’s gotta lock in. Have to be confident, have to be aggressive. Have to do my job and that’s to shoot the ball well and to defend.

Have you changed anything with your jumper? Looking at the past couple months back-to-back, your perimeter shooting was below 32 percent. In March it’s above 45 percent.

I feel like I got a lot of great looks earlier this year. They just weren’t falling. Right now, they’re falling for me, so I have the same mindset that I had when I was missing and that’s to keep on shooting. At some point, they’re gonna go down for me.

Is knowing that every game at this point means more an extra motivator for you guys?

Definitely. We’re basically in the playoffs right now. We’re in a playoff series right now where we have to win games, we have to close out games, in order to get the seeding and to stay in the playoffs. Each game and each possession means something to us right now.

Is it disappointing to be in the position the team is in right now, or are you looking at it as, ‘If we get there, we’re going to be alright’?

I mean, we wish we were in a better position. But where we’re at right now, we’re fine with it. We want to make that last push to get higher in the seeding.

Lots of changes have gone on here. Eric Bledsoe came in two weeks into the season. You had the coaching change and lineup changes. Jabari Parker’s been getting situated before the postseason. How difficult does that make it for you guys to build consistency?

Yeah, it was tough at first. But I think early on we had to adjust on the fly. We didn’t have too many practices. There was a stretch where we were able to get in the film room, get on the court, and practice with each other more.

Now it’s just at a point where we’re adding a lot of new guys off the bench where we have to do the same things—learn on the fly, watch film. We’re not on the court as much now, but we just have to do a great job of buying in to our system, try to get to know each other.

Does this team feel like it has unfinished business based on what happened last year?

Definitely. Last year, we felt like we let one go. Toronto’s a great team. They’re having a hell of a season this year, but I feel like we let one go. This year’s a new year—a little add of extra motivation. We’ve been in the playoff position before, so hopefully, we learn from it when we go into it this year.

Would you welcome that rematch?

I mean, we welcome anybody man. We showed that we compete with any team out here. We can’t worry about other teams as much. We just have to be focused on us.

What has to happen for you guys to achieve your full potential?

Lock in. Just play as hard as we can, play unselfish, and do our job out there night-in, night-out.

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NBA Daily: Raptors Look To Fine-Tune The Defense

The Toronto Raptors’ defense had a letdown against the Cavaliers, but has been outstanding overall.

Buddy Grizzard



The Cleveland Cavaliers and Toronto Raptors engaged in an offensive shootout on Wednesday that could be a playoff preview. The Cavs protected home court with a single-possession, 132-129 victory. Afterward, the Raptors spoke about the types of defensive adjustments the team needs to make as the postseason rapidly approaches.

“That’s how a playoff game would be,” said DeMar DeRozan, who missed a three at the buzzer that could have forced overtime. “This is a team we’ve been playing against the last two years in the postseason. Understanding how we can tighten up things defensively, how to make things tougher for them [is key].

“[It’s] little small things that go a long way, and not just with them … with every team.”

Raptors coach Dwane Casey concurred with DeRozan that fine-tuning of the defense is needed. He also pointed out that, with young contributors such as center Jakob Poeltl and power forward Pascal Siakam on the roster, defensive experience against the league’s best player, LeBron James, is something they will have to gain on the fly.

“I don’t think Jakob Poeltl played against him that much, and Siakam,” said Casey. “This is their first time seeing it. I thought Jak and Pascal did an excellent job, but there are certain situations where they’ve got to read and understand what the other team is trying to do to them.”

Poeltl was outstanding, leading the bench with 17 points and tying for the team lead in rebounds with eight. Casey praised the diversity of his contributions.

“I thought he did an excellent job of rolling, finishing, finding people,” said Casey. “I thought defensively, he did a good job of protecting the paint, going vertical. So I liked what he was giving us, especially his defense against Kevin Love.”

Basketball Insiders previously noted how the Raptors have performed vastly better as a team this season when starting point guard Kyle Lowry is out of the game. Much of that is due to Fred VanVleet’s emergence as one of the NBA’s best reserve point guards. VanVleet scored 16 points with five assists and no turnovers against Cleveland. It’s also a reflection of how good Toronto’s perimeter defense has been up and down the roster.

According to ESPN’s defensive Real Plus-Minus statistic, three of the NBA’s top 15 defensive point guards play for the Raptors. VanVleet ranks seventh while Lowry is 12th and Delon Wright is 14th. Starting small forward OG Anunoby ranks 16th at his position.

The Raptors also rank in the top five in offensive efficiency (third) and defensive efficiency (fifth). Having established an identity as a defensive team, especially on the perimeter, it’s perhaps understandable that Lowry was the one player in the visiting locker room who took the sub-standard defensive showing personally.

“It was a disgraceful display of defense by us and we’ve got to be better than that,” said Lowry. “We’ve got to be more physical. They picked us apart and made a lot of threes. We’ve got to find a way to be a better defensive team.”

Lowry continued the theme of fine-tuning as the regular season winds down.

“I think we’ve just got to make adjustments on the fly as a team,” said Lowry. “We can score with the best of them, but they outscored us tonight. We got what we wanted offensively. We’re one of the top teams in scoring in the league, but we’re also a good defensive team.”

Lowry was clearly bothered by Toronto’s defensive showing, but Casey downplayed the importance of a single regular-season game.

“We’ve got to take these games and learn from them, and again learn from the situations where we have to be disciplined,” said Casey. “It’s not a huge thing. It’s situations where we are that we’ve got to learn from and be disciplined and not maybe take this step and over-help here. Because a team like that and a passer like James will make you pay.”

While the Raptors continue to gain experience and dial in the fine defensive details, Casey was insistent that his players should not hang their heads over falling short against Cleveland.

“Hopefully our guys understand that we’re right there,” said Casey.

The Raptors host the Brooklyn Nets tonight to open a three-game home stand that includes visits from the Clippers Sunday and the Nuggets Tuesday. After that, Toronto visits the Celtics March 31 followed by a return to Cleveland April 3 and a home game against Boston the next night. With three games in a row against the other two top-three teams in the East, the schedule presents plenty of opportunities for the Raptors to add defensive polish before the playoffs begin.

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