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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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Miami’s Struggles About More than One Player

Drew Maresca assesses the Miami HEAT’s early-season struggles and their statistical slide from the 2019-20 campaign.

Drew Maresca

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The Miami HEAT appeared to successfully turn the corner on a quick rebuild, having advanced to the bubble’s 2020 NBA Finals. It looked as though Miami took a short cut even, rebounding from the LeBron James, Dwyane Wade and Chris Bosh era incredibly quickly. Ultimately, they did so through smart drafting – including the selections of Bam Adebayo, Kendrick Nunn and Tyler Herro – plus, a little luck, like the signing of Jimmy Butler and smartly sticking with Duncan Robinson.

But despite the fact that they should have improved from last season, the tide may have turned again in South Beach.

Through 15 games, the HEAT are an underwhelming 6-9 with losses in each of their last two games. Miami is also scoring fewer points per game than last season – 109.3 versus 112  – while giving up more – 113.1 against 109.1.

Miami has played the 14th-toughest schedule in the NBA, and there are some embarrassing and noteworthy loses thus far. They lost by a resounding 47 points to the Milwaukee Bucks earlier this season, with extra harsh defeats of 20 points to the lowly Detroit Pistons and the mediocre Toronto Raptors.

What’s to blame for Miami’s woes? Unfortunately for the HEAT, it’s a number of things.

First of all, they need more from a few of their stars – and it starts at the very top. Jimmy Butler was Miami’s leading scorer in 2019-20, posting 19.9 points per game. But this season, Butler is scoring just 15.8 points per game on a sub-par 44.2 percent shooting. While Butler shot poorly from three-point range last season, too (24.4 percent), he hasn’t connected on a single three-pointer yet in 2020-21. This, coming from a guy who shot 34.7 percent from deep in 2018-19 and 35 percent in 2017-18.

But it’s not just his lack of scoring that’s hurting. Butler is also collecting fewer assists and rebounds as well. He’s averaging only 5.5 rebounds and 5.3 assists per game, down from 6.7 ad 6.0 last season.

However, Butler’s main struggle this season has nothing to do with any statistic or slump. Butler has missed seven straight games due to COVID-19 protocols. Although to go-scorer wasn’t playing particularly well prior to isolating from the team – scoring in single digits twice – the HEAT are always in better shape if their leader takes the floor with them.

It’s not just Butler either. Tyler Herro also needs to regain his bubble form, at least as far as shooting is concerned. After connecting on 38.9 percent on 5.4 three-point attempts in 2019-20, he’s sinking only 30.2 percent of his 5.3 three-point attempts per game this season.

While Herro is scoring more – 17.2 points per game this season – and doing so more efficiently, he’s doesn’t pose the same threat from deep this season. So while he’s sure to pick it up sooner than later, he must do so to put more pressure on opposing defense.

It’s fair to assume Herro will solve his long-distance shooting woes, but the fact that he’s also struggling from the free throw line is concerning because it speaks more to his form. Herro is still well above the league average, connecting on 76.5 percent of his attempts from the charity stripe, but he shot a scorching 87 percent on free throw attempts last season.

So what’s behind the slump? More importantly, which Herro can the HEAT count on for the remainder of 2020-21? As much as Herro is on track to grow into an incredible player, Miami needs his efficiency to return to last season’s form if they expect to compete. But like Butler, a major part of Herro’s struggles are off the court.

Herro is currently dealing with an injury, having missed the last five games with neck spasms. Coach Erik Spoelstra noted that giving the injured Herro so many minutes before his big layoff likely exacerbated his injuries.

“There’s no telling for sure if this is why Tyler missed these games,” Spoelstra told the South Florida SunSentinel. “But it definitely didn’t help that he had to play and play that many minutes. We didn’t have anybody else at that point. If he didn’t play, then we would have had seven.”

But the HEAT’s struggles are about more than any one player – and that’s a big part of what makes Miami, Miami.

Still, their team stats are equally puzzling, like that the Miami HEAT currently ranks 20th in offensive rating and 23rd in defensive rating. In 2019-20, they were 7th in offensive rating and 11th in defensive rating. Obviously, something isn’t translating from last year, but what is it that’s missing?

Firstly, the HEAT are only the 18th best three-point shooting in terms of percentage. Last season, Miami was 2nd by shooting 37.9 percent. Herro returning to his old self should help quite a bit, and Butler making at least a few threes should improve spacing, too.

But it’s not just three-point shooting as the HEAT ranked last in field goal attempts last season, tallying just 84.4 attempts per game. And while they’re last again this season, they’ve managed to average even fewer attempts per game (81.7) despite maintaining nearly all of their roster.

The HEAT are also last in offensive rebounding, which translates to fewer field goal attempts and fewer points. And while Miami was 29th in offensive rebounds last season, they’re corralling 2.1 fewer rebounds this season (6.4) than in  2019-20 (8.5). What’s more, Miami is now last in total rebounds with only 40.9 per game. A number that also represents a fairly significant change as the HEAT were 17th a season ago with 44.4 per game – whew!

Lastly, Miami is turning the ball over more often than nearly any other team – sorry, Chicago – in 2020-21. During the prior campaign, the HEAT were barely middle of the pack, turning the ball over 14.9 times per game, a mark that left them 18th-best in the league. This season, they’re 29th and turning the ball over 17.7 times per game – dead last in terms of turnovers per 100 possessions.

It’s not all bad news for the HEAT, though. Bam Adebayo looks great so far, posting 20.3 points, 8.9 rebounds and 5.5 assists per game. Second-year stud Kendrick Nunn is averaging 21.5 points on 56 percent shooting through the past four games; while Duncan Robinson is still a flame thrower, shooting 44.4 percent on 8.4 three-point attempts per game.

The HEAT’s upside is still considerable, but it’s easy to wonder if they captured magic in a bottle last season.

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What We Learned: Western Conference Week 4

Ariel Pacheco

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It’s only been a month, but the NBA season has already seen plenty of ups and downs. In the Western Conference, especially, the 2020-21 season has been a smashing success for some, but a complete and total slog for others.

But which teams have had it the best in the West so far? The worst? Let’s take a look in the latest Western Conference installment of Basketball Insiders’ “What We Learned” series.

The Clippers Hit Their Stride

Los Angeles’ holdovers from a season ago have often pointed to their regular season complacency as to why they fizzled out during last year’s postseason. And, because of that, they’ve made a concerted effort to play hard on every possession so far in the 2020-21 season.

So far, the results have been good. More than good, even; the Clippers, tied for the best record in the NBA with their in-house rival, the Los Angeles Lakers, are on a six-game win streak. Paul George has played like an MVP candidate, while Kawhi Leonard has looked healthy and at the peak of his powers. Offseason additions Nicolas Batum, Serge Ibaka and Luke Kennard have all made strong contributions as well.

With so many versatile players and a roster as deep as any in the NBA, anyone can be “the guy” for Los Angeles on any given night. And, tough to guard because of that versatility, they’ve managed the NBA’s second-best offensive rating through the first month.

After last season’s let-down, the Clippers have played without much pressure this season — and it’s showed. Still, with Leonard a potential pending free agent (Leonard can opt-out after the season), it’s paramount that the team play hard and show him they’re good enough to compete for a title in both the short- and long-term.

So far, they’re off to a great start.

Injury Woes Continue in Portland

Portland’s been bit by the injury bug. And badly.

Already without Zach Collins, the Trail Blazers have lost both Jusuf Nurkic and CJ McCollum in recent weeks. They couldn’t have come at a worse time, either; Nurkic had turned a corner after he struggled to start the year, while McCollum, averaging 26.7 points on 62 percent true shooting, was in the midst of a career year.

It would seem, once again, like Portland has put it all on the shoulders of Damian Lillard. But, in a brutally competitive Western Conference, he may not be able to carry that load alone. They do have some solid depth: more of a featured role could be just what Robert Covington has needed to get out of a rut, while Harry Giles III, the former Sacramento King that was signed in the offseason, has a ton of potential if he can just to stay on the court. Carmelo Anthony, Gary Trent Jr. and Enes Kanter should see expanded roles in the interim, as well.

But will it be enough? We can only wait and see. But, if that group can’t keep the Trail Blazers afloat until Nurkic and McCollum can return, Portland could be in for a long offseason.

Grizzlies Are Competitive — With or Without Ja Morant

Memphis, on a five-game win streak, is just a half-game back of the West’s fifth seed. And they’ve managed that despite the sheer amount of adversity they’ve had to deal with to start the year. Jaren Jackson Jr. is expected to miss most of if not the entire season, multiple games have been postponed due to the league’s COVID-19 health and safety protocols and Ja Morant missed eight games due to an ankle sprain.

However, head coach Taylor Jenkins has the Grizzlies playing hard, regardless of who is in the lineup. They have the third-best defensive rating in the NBA at 106.1 and have managed huge wins over the Brooklyn Nets, Philadelphia 76ers and Phoenix Suns.

Of course, Memphis is glad to see Morant over his injury and back in the lineup, but they might be just as happy to see how their entire core has progressed. Their success this season has, in large part, been a group-effort; rookies Xavier Tillman and Desmond Bane have been strong off the bench, while youngsters Brandon Clarke, Dillon Brooks and Grayson Allen have all proven integral pieces to the Grizzlies’ core for years to come.

As the year carries on, Memphis might not stick in the playoff picture. But, if their young core can continue to develop, they might not be on the outside looking in for much longer with Morant leading the charge.

What’s Going On In New Orleans?

The Pelicans have struggled and there wouldn’t appear to be an easy fix.

5-9, on a three-game losing streak and having dropped eight of their last nine, New Orleans just can’t seem to figure it out. The rosters fit around cornerstones Zion Williamson and Brandon Ingram has proven awkward at best, as the team ranks in the bottom-10 in both offensive and defensive rating. Lonzo Ball has struggled offensively to start the season while JJ Redick can’t find his shot. Newcomer Eric Bledsoe has been fine but, as one of the team’s few offensive creators, his impact has been severely minimized.

Despite their stable of strong defenders, Stan Van Gundy’s defensive scheme, which has maximized their presence in the paint but left shooters wide open beyond the arc, has burned them continuously. Williamson’s effort on the defensive end, meanwhile, has been disappointing at best; he hasn’t looked like nearly the same impact defender he did at Duke University and in short spurts a season ago.

They still have time to work it out, but the Pelicans need to do so sooner rather than later. If they can’t, or at least establish some sort of consistency, New Orleans might never see the heights many had hoped to see them reach this season.

Be sure to check back for the next part of our “What We Learned” series as we continue to keep an eye on the NBA all season long.

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NBA Daily: Lonzo Ball Presents Difficult Decision For Pelicans

Lonzo Ball is struggling early in his fourth NBA season, leaving the Pelicans questioning whether he will be a part of the team’s long-term plans moving forward.

Garrett Brooks

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Lonzo Ball and the New Orleans Pelicans failed to reach an extension prior to the deadline entering the 2020-21 NBA season – which made this season an important year for the former second overall pick to prove his worth.

But things have not gone according to plan for Ball. Originally acquired by the Pelicans in the Anthony Davis trade, Ball has failed to get going early in the current season. After a few years of what seemed like positive progression in the guard’s shooting stroke, this 2021 has brought up the same questions that surrounded Ball in his earlier scouting reports.

In his first three seasons, Lonzo saw his three-point accuracy increase each year. It started at a 30.5 percent accuracy rate and had jumped to an impressive 37.5 by his third NBA season, 2019-20.

Now well into his biggest campaign yet, he sits below 30 percent for the first time in his career, though there is a lot of time left to see that number increase. If Ball expects to be part of the Pelicans’ long-term plans, improvement is absolutely vital.

Obviously, shooting is a key part of the NBA game today, especially as a guard. Simply put, a player needs to give his team the proper floor spacing needed to maximize their scoring output in an offensively driven league.

That point is especially true for Ball, who needs to prove he can play alongside franchise cornerstones Brandon Ingram and Zion Williamson. Both players are showing the skillset to be a dominant one-two punch for years to come, and the biggest need around them is proper floor spacing.

So even with all the positives Ball brings to the defensive side of the floor and as a playmaker, he cannot fit alongside Williamson and Ingram unless he’s a threat to hit shots from behind the arc. He’s obviously trying to prove himself in that regard as he has never averaged more three-point shots per game than he currently is – and yet, the result has been concerning.

When the two sides failed to reach an extension this offseason, it was abundantly clear that the Pelicans needed to see consistency before they’d tie long-term cap space to the guard. In the early going of the season, Ball is perhaps playing his most inconsistent basketball since his rookie campaign with the Los Angeles Lakers.

But will the Pelicans benefit from not signing Ball prior to the season? Maybe even by getting him to agree to a team-friendly contract if his struggles continue all year?

That seems highly unlikely. First off, not all teams are as desperate for a good shooting guard as the Pelicans are. As previously stated, Williamson and Ingram are in place as the franchise cornerstones. That means every player brought in on a long deal from here on out is brought in with the plan to fit alongside the forward combination.

Most teams with cap space don’t have the luxury of already having two franchise cornerstones in place. That means they are more likely to build around a player they sign – that’s especially true for a player that will hit free agency at a young age as will be the case with Ball.

While there’s almost no way the Pelicans won’t make a qualifying offer to Ball this offseason, it becomes a whole different question when pondering if they’ll match any contract he signs, depending on the financials involved.

He’ll offer significantly more value to another franchise than he might to the Pelicans because of the fit. The New York Knicks, for example, will be among the teams with cap space this offseason, they could see Ball as a player they can build things around moving forward.

That instantly makes him much more valued by the Knicks than he currently would be by the Pelicans. Of course, New Orleans would maintain their right to match the contract, but what good would it be if he isn’t going to fit next to the stars of the team? At no point will he be prioritized over the likes of Williamson and Ingram, which means he’s on a ticking clock to prove he can play alongside them as the team continues its ascension.

The first step could be adjustments to the rotation that sees Ball play more of the traditional point guard role with the rock in his hands. This isn’t easy for head coach Stan Van Gundy to do though as Ingram and Williamson thrive with the ball in their hands.

In all likelihood, Ball’s future in New Orleans will hinge on his consistency as a shooter, which, contrary to popular belief, he has shown the ability to do in the past. First off, confidence and staying engaged are keys; while Ball has struggled with both of those things in his early NBA seasons.

The second is an adjustment to his tendencies. Instead of settling for the spot-up opportunity every time it is presented, Ball would benefit from attacking the closeout more often and maximizing the chances that come from doing so.

Those options are in areas like finding the next open man for a three-pointer, getting to the free-throw line and finishing at the rim instead of hitting the deep shot. If he does these things, he’ll quickly find himself facing less aggressive closeouts and will be more confident in his game. Naturally, those things could lead to a more successful shooting number as the season continues on.

Ball is as talented as they come and it’s understandable why the Pelicans want to slide him in behind the two franchise forwards they have. The unfortunate reality is that time is running out on pass-first guard’s big chance to prove it’s the right move for the Pelicans moving forward.

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