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NBA PM: The Problems with Restricted Free Agency

Despite the logic behind restricted free agency, there are a lot issues that hurt both players and teams.

Jesse Blancarte

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The issue of player movement is under the microscope after Kevin Durant decided to leave the Oklahoma City Thunder to join the Golden State Warriors this month. The NBA has a number of rules and restrictions in place that are designed to help teams retain their players while still allowing individuals the flexibility to periodically switch teams if they so choose.

The most problematic portion of this system of rules and regulations is restricted free agency. Players become restricted free agents in limited circumstances, most often after the fourth year of rookie-scale contracts for first-round draft picks. If a team extends a qualifying offer, it can then match any offer sheet that player signs. This system is of course designed to help teams retain their key players, but there are some negative consequences for both the teams and the players.

First, any restricted free agent who isn’t a star or budding star will likely face an artificially dry market. This is the case since teams that otherwise would be interested in a particular restricted free agent often know that the player’s original team will very likely match any semi-reasonable offer sheet. Aside from completely overpaying a restricted free agent, there aren’t many effective ways to structure an offer sheet to deter the original team from matching.

Another reason why teams shy away from chasing restricted free agents is because it will likely limit their ability to pursue desirable unrestricted free agents. Teams are allowed to contact and negotiate deals with free agents starting on July 1. However, players are not allowed to actually sign a contract until the end of the moratorium, which lasted from July 1 until July 7 this year.*

*The moratorium was supposed to last until July 11 this year, but was changed after last offseason’s incident with DeAndre Jordan and the Dallas Mavericks.

Furthermore, once an offer sheet has been signed, the original team has three days to match it. This means that if a team set aside $20 million for a restricted free agent this offseason, that money would be tied up until July 9 once the original team matches or opts not to. In the meantime, other players will be flying off the free agency board as other teams rush to make deals before the free agency pool dries up. This is a huge risk for teams, especially when you consider how often restricted free agent offer sheets are matched. And even if a team chooses not to match, the primary reason is likely that the offer sheet is unreasonably high and exceeds the player’s estimated worth at that point in time. There are some circumstances where teams are comfortable severely overpaying a restricted free agent, but in general it’s still a problematic means of adding talent.

This creates problems for the restricted free agents as well. The obvious result of this system is that unrestricted free agents will almost always be pursued first. This means that by the time teams collectively set their sights on the bulk of the restricted free agents, the majority of the teams’ spending power may be used up. This may not be a major issue for star-caliber players, who will ultimately receive a sizable contract, but it is for the average role player.

This often leaves players in a tough position. The player must determine if he should accept whatever offer his original team has put on the table, continue waiting for another team to step with a big offer sheet, accept the original team’s qualifying offer to become an unrestricted free agent the following offseason or perhaps even hold out for a bigger deal, as Tristan Thompson almost did when he was a restricted free agent last summer in negotiations with the Cleveland Cavaliers.

We saw a rare example of a player taking the qualifying offer in 2014 when Greg Monroe did so with the Detroit Pistons. Monroe opted to earn $5.5 million that season, passing on a reported deal worth somewhere between $50-$60 million. In doing so, Monroe became an unrestricted free agent after the season and signed a three-year, $50 million deal with the Milwaukee Bucks. Monroe’s contract with Milwaukee isn’t a max-level deal, but he is earning roughly $3 million more per season than he would under Detroit’s offer and he had the freedom to choose where he would play – a luxury that has a lot of value to most players.

While things worked out contractually for Monroe, there is a reason why the vast majority of players pass on their respective qualifying offers. First off, the player is likely losing significant salary for that single season, as we saw in the case of Monroe. Also, injuries can happen at any time as we know too well. So if a player accepts their qualifying offer and then suffers a catastrophic injury, they have no long-term security and will likely enter unrestricted free agency at a disadvantage (depending on the severity and long-term prognosis of the injury).

While Michael Kidd-Gilchrist likely would have signed a much better deal as a restricted free agent, he did land financial security in signing a rookie extension last summer. Shortly after doing so, he dislocated his shoulder and partially tore his labrum during one of the Charlotte Hornets’ preseason games last October. He then suffered a second shoulder injury toward the end of last season, shortly after recovering from the first injury. In signing an extension, he locked in a lot of money and protected himself against the risk of injury. However, Kidd-Gilchrist is highly thought of around the league and it’s hard to imagine him not landing somewhere close to the four-year, $90 million max-level offer sheet he was eligible for, even after suffering the shoulder injuries.

Jimmy Butler and Tobias Harris both passed on sizable extensions from their respective teams and entered restricted free agency. Harris passed on signing an extension in 2014 and landed a four-year deal worth $64 million from the Orlando Magic the following offseason. Butler reportedly informed the Chicago Bulls that he would agree to a four-year, $48 million extension, which the team reportedly would not offer. Butler subsequently had a career-year and landed a five-year, $95 million deal from the Bulls as a restricted free agent. As you can see, any player displaying a developing game, under the current system, should most likely pass on signing a rookie extension and instead test restricted free agency.

While Harris and Butler came out ahead with their decisions, it doesn’t always work out that way for players. Another notable issue that comes up with restricted free agency is the animosity that can brew between a player and his team. It’s usually difficult determining what a player is actually worth in terms of dollars and years, and determining this becomes even more difficult when the market is artificially cooled by a system that deters teams from pursuing a certain class of players.

While players like Tristan Thompson and Eric Bledsoe, among many others, may think they are worthy of max-deals, their team’s executives may disagree. In the case of Thompson and Bledsoe, both players went through a lengthy negotiation process that got nasty at times. While players and executives are professionals and often get past any hard feelings that come up during the negotiation process, there’s little doubt that oftentimes this process dampens whatever positive feelings both sides may have had for the other.

Having said all of this, we did see some examples this offseason of role players getting significant contracts as restricted free agents. Orlando’s Evan Fournier (five years, $85,000,000), Portland’s Allen Crabbe (four years,$75,000,000), Miami’s Tyler Johnson (four years, $50,000,000) all signed bigger deals than anyone reasonably expected for differing reasons. Fournier proved himself to be a deadly shooter last season and fills a bigger role now that Victor Oladipo plays for the Oklahoma City Thunder. Crabbe and Johnson both got huge deals partially because the Brooklyn Nets lack assets and draft picks to acquire young talent and were thus willing to overpay to add some promising players to their roster. Nevertheless, restricted free agency is problematic in several ways and is something that likely will be adjusted in the next Collective Bargaining Agreement.

So how can the NBA and the Players’ Association address the problems with restricted free agency during their labor negotiations? There aren’t any obvious answers to this question, but here are a few thoughts on the issue:

1. Create early extensions for rookie-scale contracts

One of the easiest ways to avoid losing a player in free agency is to extend their existing contract before they hit free agency. This could be particularly useful for rookie-scale contracts since they are not tied to the salary cap, which means they do not increase as the cap increases. This is why productive players on rookie deals are such valuable commodities – they are heavily cost-controlled.

Nate Duncan of The Cauldron spoke with league executives earlier this year and one change that received strong support was a rule that would allow teams the option to extend players after the second season of their rookie contracts:

“One idea an executive floated would more align compensation with production for players on rookie contracts: provide a window after the second year of a rookie contract for an extension which would immediately supersede the last two years of the rookie contract while extending the contract beyond that time frame.

If such an extension were not agreed to, the last two years of the rookie contract would operate normally, but the player would become an unrestricted free agent after the fourth year, rather than a restricted free agent as under the current system. Under this proposal, the thinking goes, a team that really viewed a player as part of its future and wanted to keep him from unrestricted free agency would be forced to free him from the indentured servitude of the rookie-scale deal. But, much as in baseball, teams could still get discounts on these extensions, because the player would be motivated to agree rather than go through two more cheap years on the original deal.”

This makes sense for several reasons. As Duncan stated, the team has a means to delay its player from becoming an unrestricted free agent, while significantly increasing the player’s annual salary. While this approach may not be appealing for teams or players in every situation, it offers some incentive to both sides to extend the length of their contractual relationship.

2. Shorten the period teams are given to match an offer sheet

If one of the major deterrents to pursuing restricted free agents is the three-day period for the original team to match, then why not shorten that period? Limiting the period to exercise the right of first refusal to one day may be harsh, but perhaps 36 hours or even two days would be a fair compromise. This solution only address one of several problems associated with restricted free agency, so this would have to be just one component of several other amendments.

3. Expand incentives teams can include in offer sheets

Under the current system, teams cannot offer contracts as long as a restricted free agent’s original team, nor can it offer comparable annual raises. These rules are in place to theoretically give a restricted free agent’s original team an advantage in keeping its players, but that consequently prevents other teams from structuring offers that the player’s original team may think twice about matching, which has the effect of chilling the market for many restricted free agents. While teams typically use trade kickers, poison pills and player options, there could be more incentives so a team may feel more confident in their ability to structure a deal that a restricted free agent’s original team may pass on. Even if teams still match these offer sheets at a high rate, at least other teams will feel somewhat more confident in their ability to effectively pursue restricted free agents.

4. Getting rid of restricted free agency altogether

This is a drastic approach that team owners would likely never agree to without significant concessions elsewhere. The ability to retain a player for several seasons is a major tool for teams, so getting rid of it altogether could cause even more player movement than we currently see in free agency. However, removing a safeguard like this would incentivize teams to run their respective franchise’s as effectively as possible in order to make itself a desirable destination for free agents, while teams that are run incompetently would necessarily flounder. Again, this is a drastic measure that owners would most likely never agree to, but there is some merit to removing a flawed system that is designed to protect owners.

*****

These are just a few proposed solutions to a series of issues with restricted free agency. If you think you have the solution, be sure to leave your thoughts or suggestions in the comment section below.

Jesse Blancarte is a Deputy Editor for Basketball Insiders. He is also an Attorney and a member of the Professional Basketball Writers Association.

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Mock Drafts

NBA Daily: 2018 60-Pick NBA Mock Draft – 4/24/18

The deadline for early entry into the 2018 NBA Draft has passed, so Basketball Insiders Publisher Steve Kyler offers up another 60-pick Mock Draft.

Steve Kyler

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The Deadline for early entry into the 2018 NBA Draft was April 22, however, the NBA hasn’t yet released the full list of eligible players. There appear to be more than 153 underclassmen that have declared to “test the waters” according to reports. By way of comparison, last year there were 137 players from college and an additional 45 from international basketball that declared early, with 73 of those players pulling out after going through the process.

The 2018 Draft class could be shaping up to be one of the biggest, especially when you consider the volume of highly draftable seniors.

There are still some dates to keep in mind:

The NBA Draft Lottery will be held in Chicago on May 15. The annual NBA Draft Combine will get underway on May 16, also in Chicago. In any given draft year, roughly 70 percent of players invited to the Combine end up being drafted into the NBA, so a Combine invite is a significant draft milestone.

The NCAA requires all players wishing to maintain their college eligibility, without penalty, to withdraw from the NBA Draft by 11:59 pm on May 30. That is an NCAA mandated date, not related to anything involving the NBA, and that notice must be delivered in writing.

The NBA’s draft withdrawal date is June 11 by 5:00 pm ET. The NBA’s date allows a prospect to remain NBA draft eligible for future NBA drafts and is not related to any NCAA rule or date. There are ways for college players that did not accept benefits to return to college, however, they may be subject to NCAA penalties.

Here is this week’s 2018 NBA Mock Draft, based on the final pre-draft lottery draft order:

Here are some of the pick swaps and how they landed where they are currently projected:

The Cleveland Cavaliers are owed the Brooklyn Nets’ first-round pick as a result of the Kyrie Irving trade this past summer. The Brooklyn Nets traded several unprotected picks to Boston as part of the Kevin Garnett and Paul Pierce trades in 2015.

The Philadelphia 76ers are owed the LA Lakers’ 2018 Draft pick, unprotected, as a result of the 2012 Steve Nash trade with the Suns. The Suns traded that pick to the 76ers as part of the Michael Carter-Williams three-team trade with the Milwaukee in 2015. The 76ers traded that pick to the Boston Celtics as part of the draft pick trade that became Markelle Fultz before the draft; it has 2 through 5 protections. Based on the final regular-season standings should convey to Philadelphia if the draft lottery holds true to the standings.

The LA Clippers are owed the Detroit Pistons first-round pick in 2018 as a result of the Blake Griffin trade. The pick is top four protected and would convey if the draft lottery holds true to the standings.

The Phoenix Suns are owed the Miami HEAT’s first-round pick as part of the Goran Dragic trade in 2015, it is top-seven protected and would convey to Phoenix based on the final NBA standings.

The Phoenix Suns were owed the Milwaukee Bucks’ first-round pick as part of the Eric Bledsoe trade. The pick would only convey if the Bucks pick landed between the 11th and 16th pick, which based on the final NBA standings did not convey. The Suns will now receive the Bucks 2019 first-round pick assuming it falls between the fourth and 16th pick.

The Atlanta Hawks are owed the Minnesota Timberwolves’ first-round pick as part of the Adreian Payne trade in 2015. The pick was lottery protected and would convey to Atlanta based on the final NBA standings.

The Minnesota Timberwolves are owed the Oklahoma City Thunder’s first-round pick as part of the Jazz/Wolves Ricky Rubio trade this past summer. The Jazz acquired the pick as part of the Thunder’s deal to obtain Enes Kanter in 2015. The pick was lottery protected and would convey based on the final NBA standings.

The Chicago Bulls are owed the New Orleans Pelicans first-round pick as a result of the Nikola Mirotic trade. The pick was top-five protected and based on the final NBA standings would convey

The LA Lakers are owed the Cleveland Cavaliers first-round pick as a result of Jordan Clarkson/Larry Nance Jr. trade. The pick was top-three protected and based on the final NBA standings would convey

The Brooklyn Nets are owed the Toronto Raptors’ first-round pick as part of the DeMarre Carroll salary dump trade this past summer. The pick was lottery protected and based on the final NBA standings would convey

The Atlanta Hawks are owed the Houston Rockets’ first-round pick as part of a three-team deal with the LA Clippers and Denver Nuggets involving Danilo Gallinari and taking back Jamal Crawford and Diamond Stone. The pick was top-three protected and based on the final NBA standings would convey

Check out the Basketball Insiders’ Top 100 NBA Draft Prospects – http://www.basketballinsiders.com/top-100-nba-draft-prospects/

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NBA

NBA Daily: Trail Blazers Come Up Short and Now Search For Answers

The Portland Trail Blazers were swept in the first round of the Playoffs and now face tough questions, writes James Blancarte.

James Blancarte

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The playoffs have been a wild ride so far. On Sunday, all three Eastern Conference playoff games were exciting matches that featured star players stepping up in the clutch. As a result, each series is tied up, two games each. The other game of the day featured the San Antonio Spurs, who stayed in control and never once allowed the Golden State Warriors to take the lead. The Spurs managed to get a win against the defending champs despite missing their best player and now their head coach indefinitely.

For the Portland Trail Blazers, there was no such Game 4 turnaround. In fact, with the Spurs win, the Trail Blazers have the lamentable distinction of being the only team to be swept in the first round of the playoffs. This is just one way to describe how disappointing and surprising this playoff series loss to the New Orleans Pelicans was for Portland. Many NBA observers and Pelicans fans were quick to point out that every ESPN NBA personality chose the Trail Blazers to win the series, as did select writers of the Basketball Insiders team.

The Trail Blazers’ players and front office also made it clear how surprised they were at the result. Forward Evan Turner shared his surprise.

“Obviously finishing so quickly wasn’t definitely the plan and to a certain extent it was shocking,” Turner said.

General Manager Neil Olshey chimed in as well.

“Nobody expected [the playoff sweep] to happen. It did. We had our chances in Game 1, we had our chances in Game 2. Clearly Game 3 was a setback,” Olshey stated when describing his surprise at how the series ended. “Stunned, I think disappointed.”

Credit should be given to the Pelicans and their ability to fully harness their talent and impose their will in the series. Turner was effusive in praising the talent and ability of the Pelicans.

“Unlocked Jrue is pretty dangerous and we all see how Rondo plays. He’s a homerun hitter but he is always solid. He can mess around. He’ll get two or three triple doubles. Anthony Davis is a problem,” Turner said.

When asked how he felt about the playoff exit, starting center Jusuf Nurkic stated that he is beyond disappointed.

“I mean, the way I finish the season, I feel shame. The way we have a season, like a team and group, and being in position to be third in the West, and finish like this, is not good,” Nurkic stated. “It’s not something you should be proud of, because all you do through the year, fight for playoff and to be in position to have a good postseason.”

Despite the early exit, many within the organization were quick to highlight that they continue to see the regular season in a positive light, including Head Coach Terry Stotts.

“I thought we had a very good regular season, I thought we had a very disappointing end of the season,” Stotts stated.

Damian Lillard shared a similar sentiment when reflecting on the season as a whole.

“I think I’ll always remember the way [the season] ended. But I won’t forget the kind of season we had. You can’t ignore the fact we won a division title in a division where there was some great teams,” Lillard stated. “We came out on top.”

Still, the success of the regular season makes the playoff result that much harder to grasp and deal with for some. Nurkic again didn’t hold back when comparing the success of the regular season with the team’s playoff failure.

“Very surprised,” Nurkic stated. “You definitely didn’t see the team who we are in the playoffs.”

Explaining why the Trail Blazers came up short against the Pelicans is no easy task. Clearly Portland’s attempt to feature its two premiere guards failed as the Pelicans were able to clamp down on Lillard and McCollum effectively in each game. Complicating matters further was the inability of the Trail Blazers to effectively utilize Nurkic on both ends of the court. However, there was at least some praise to be heaped on the backup bigs, Zach Collins and Ed Davis.

“I think Zach played really well for us,” Olshey stated. “He had an impact defensively.”

Also, Al-Farouq Aminu was able to do his part as an acceptable defensive option against Davis while spreading the floor with his outside shooting

Regardless, Turner shared his assessment that the team failed to have an adequate game plan for a scenario where their two best players are neutralized.

“One thing that may help, it’s no jabs or anything, but building the identity outside of our two strong scorers,” Turned stated. “[W]e sometimes go downhill when a team fully focuses on a lot of attention on our stars […] But I think we might need certain plays, certain structures that kind of prepare just in case that occurs.”

With their postseason concluded, the Trail Blazers are suddenly left trying to answer questions with no easy answers. Who, if anyone, is to blame for what happened? So far, many head coaches have been let go and unsurprisingly some speculation has turned toward Coach Stotts. Stotts, when asked, focused on the team and deflected any analysis of his performance.

“I’m not going to evaluate the job I did,” Stotts said.

Lillard, on the other hand, was effusive in his praise of his coach.

“Coach Stotts has done a great job from day one. We’ve been in the playoffs five years straight,” Lillard said.

For now, there does not appear to be strong rumblings about Stotts. With the offseason just beginning for the team there is still time to reflect and assess what went wrong. Additionally, the team has to resolve what to do regarding its own free agents. No name looms larger than Nurkic, who despite his poor showing, represents one of the team’s top talents and expressed his guarded optimism regarding a return.

“I want to be here, it’s no secret,” Nurkic stated when asked if he wants an extension in Portland. “Yes, definitely.”

Nurkic ended the thought by stating, a bit ominously, that he did his part and a deal may or may not get worked out.

“My agent and people here are going to figure out the rest, or not,” Nurkic said.

Complicating the desire to retain Nurkic is the team’s financial situation as the team is currently over the cap and under obligation to center Meyers Leonard, who has struggled to stay in the rotation and is earning roughly $21.8 million over the next two years.

“It’s our job to be measured and not to overreact. [Because] when you overreact is when you make mistakes,” Olshey stated.

Lillard was quick to emphatically shut down the notion of splitting up him and McCollum when asked if that would be a good idea.

“I mean, I don’t agree with it. I think it’s that simple,” Lillard declared.

When asked what the team plans to do going forward, Olshey expressed optimism but tried again to pay credit to the season’s effort overall.

“We’re going to do everything we can to upgrade the roster as we always do but we also aren’t going to lose sight of the success throughout the course of the season,” Olshey said.

“I don’t have all the answers for you today,” Olshey surmised. “A lot of times you don’t know where your help is coming from.”

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NBA

The Problem With ‘Championship Or Bust’

Should an NBA Title be the only measuring stick when we’re talking about a team’s success?

Spencer Davies

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In this day and age, there’s a constant need for instant gratification. It goes for everything, really, but especially for sports.

Before the 2017-18 NBA season kicked off, the general outlook on the league was that the regular season would be a waste of time. People dubbed the Golden State Warriors as clear-cut repeat champions. Other then that franchise, there were maybe one or two others that could put up a fight with such a juggernaut.

While that story has yet to play out, others are developing quickly.

The all-of-a-sudden dangerous New Orleans Pelicans are the only ball club to have advanced to the second round of the playoffs as the sixth seed in the Western Conference. LeBron James and the Cleveland Cavaliers are deadlocked in a tied series with an Indiana Pacers team that everybody seemed to believe was lottery-bound before the year began.

After falling nine games under .500 in late January, the Utah Jazz have caught fire and are up two games to one against the league’s reigning league MVP and a re-constructed Oklahoma City Thunder roster. We’d be remiss to leave out the sensational play of Ben Simmons and Joel Embiid as the Philadelphia 76ers continue to show how dominant they’ve been in a hard-hitting affair with a gritty Miami Heat bunch.

The start to this postseason trumps last season’s already. There is a competitive fire within the majority of these encounters. It’s all on the line to prove who will be the best of the best.

And having said that, there can only be one that takes home the Larry O’Brien trophy.

One. That’s it. In the last 18 years, there have been a total of eight different organizations that have earned the right to call themselves champions. All things considered, it’s not that many.

But there’s a giant misconception about parity in the NBA that needs to be thwarted.

This league is filled with talent, top to bottom. Just like in any sport, you have the basement dwellers still trying to right the ship. Whether it be coaching, injuries, or inexperience—they’re attempting to find their way. That’s why those players are sitting at home in late April.

Then there are those who are not merely spectators, but are involved in the remaining field of 15 teams (sorry, Portland Trail Blazers). Of course, in their minds, there is a common goal of winning a title, as it should be.

However, is it fair to quantify the success of every one of these franchises simply based on whether they accomplish that goal or not? Heck no.

Are we supposed to just forget about the progress made from end-to-end? What if — hear this out — both teams have talent and one just beat the other?

Building championship basketball takes patience. There has to be some semblance of playoff experience involved. Continuity is a must have. You might not want to hear it, but the postseason is where the seeds are planted, where the understanding of the stage really starts.

There can be a collection of young players who have been teammates for years, but have never taken part in the playoffs before. Sometimes there can be a team that’s full of veterans that have been there, but they may not have played together as a collective unit. Each one of them has a different background in a different setting.

It’s a whole different beast at this point. Some are so naive to see how elevated and intense the environment really is, so they assume a team that loses a few games isn’t championship material. Newsflash: Not one team in the history of the NBA has gone 16-0 in the playoffs.

And then, the ones who fall—whether it be in The Finals, conference finals, or in first two rounds—those organizations didn’t accomplish anything. Wrong, wrong, wrong.

So in this basketball world we live in where everything has to be a 20-point victory with zero losses and it’s “championship or bust” as the measuring stick, take a step back and appreciate the work it took to even get to the postseason.

Win or lose, many of these teams are building towards bigger things in the future. These experiences will make that clear in the years to come.

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