Now more than ever, it pays to be a member of the NBA’s middle class.
Gary Harris of the Denver Nuggets recently became the latest example when it was learned that he and the Nuggets had negotiated a four-year, $84 million contract extension for him to remain with the team through the 2021-2022 season.
By nature of the collective bargaining agreement that governs the league’s economics, rookie salaries are fixed. On the other end of the spectrum are players like LeBron James, Stephen Curry and Russell Westbrook. The fact that an individual maximum player salary ensures that there’s a ceiling on how much transcendent players can earn funnels money into the NBA’s middle class of players. The main reason for that is a little-discussed rule of the collective bargaining agreement that mandates that each team spend 90 percent of the league’s salary cap on its payroll.
In other words, the $99 million salary cap for the 2017-18 season means that, by rule, each team must spend $89 million on payroll for this coming season.
Indeed, it pays to be Gary Harris, just like it paid to be Tim Hardaway, Jr.
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As a rookie, Hardaway certainly had his high moments as a member of the Knicks. For whatever reason, though, the Phil Jackson-led front office decided that Jerian Grant was a better fit for the club and opted to move Hardaway to the Atlanta Hawks in a draft night deal that brought Grant to New York.
After spending his first two seasons in New York, Hardaway appeared to have grown appreciably in Atlanta. His game was marked by discipline and consistency and last season, he put up career-high per-game numbers across the board: 14.5 points, 2.8 rebounds and 2.3 assists on 45.5 percent shooting from the field. At just 25 years old, it appeared that Hardaway was on his way to accomplish greater things as a starting shooting guard in the league.
Eventually, the Knicks would sign Hardaway to a four-year, $71 million offer sheet that the Hawks opted to not match. He had become an important part of their team, but with front office changes, the trading of Dwight Howard and the front office’s refusal to meet All-Star Paul Millsap’s asking price, it was obvious that the Hawks were starting over.
Generally, there were two schools of thought as it related to Hardaway’s contract. Some called it the worst contract of the NBA offseason, while others felt that the deal was par for the course in what has become the NBA’s new economic era of $30-$40 million annual salaries.
If one were to look at things in the simplest of terms and without context, the following seems to make perfect sense: Player A is a 23-year-old guard coming off of his third pro season. He averaged 14.9 points, 3.1 rebounds and 2.9 assists on a team that failed to qualify for the playoffs, but one that has shown tremendous promise for the near future. He looked impressive in all 56 of his starts and shot a remarkable 42 percent from the three-point line.
Player B is 24-year-old shooting guard who has just completed his fourth year in the league. He has proven to be versatile and durable and is coming off of a year in which he averaged 13.8 points, 3.3 rebounds and 2.5 assists. He shot just 39.9 percent from the field, but 35 percent from the three-point line. He is considered to be a standout defender at his position.
Player C is a 25-year-old shooting guard who is coming off of a career-best season and played a major role in his team qualifying for the playoffs. He has made strides defensively and has had a few clutch moments where he has thrived. His 14.5 points, 2.8 rebounds and 2.3 assists per game were much-needed in his team’s quest to qualify for the playoffs. And of the three, he’s the only one that can boast being on a postseason team.
On paper, and without context, each of the three players appear remarkably similar.
Player A is Gary Harris. Player B is Kentavious Caldwell-Pope and Player C is Tim Hardaway, Jr.
While Harris and Hardaway each signed four-year deals, it should be noted that Harris’ begins next season, as this coming season is the final year of his rookie scale contract. He will earn $2.55 million this year before receiving his huge payday. It should also be noted that Harris’ contract is guaranteed for $74 million, with $10 million in incentives. NBA contracts contain what are referred to as “likely” and “unlikely” incentives. Let’s assume that Harris is able to earn half of the incentives, making his final contract worth $79 million, as opposed to the full $84 million.
In terms of their annual salary, Caldwell-Pope (“Player B”) will earn $20 million on average and Harris will earn $19.75 million while Hardaway will average $17.75 million.
Comparing the salaries of these three young shooting guards against the salaries of some of their predecessors isn’t necessarily an apples-to-apples comparison since guards that entered the league before didn’t enjoy the timely free agency as the salary cap spiked.
On paper, it’s easy to see why those that support the Hardaway signing and contract feel that, especially when compared to other players that appear to be somewhat comparable in talent, his deal represented fair market value. In this day and age, a starting-caliber shooting guard’s market price is between $15 million and $20 million per year.
While it’s easy to see this perspective, though, all things need to be taken in context, and that’s where those that opposed Hardaway’s signing get credence to their argument.
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Most front office executives would agree that a player’s salary isn’t as important as the amount of years that are committed to him. In the case of Caldwell-Pope, while he will earn $20 million this coming season, he is only under contract for this coming season. Therefore, as the Lakers look toward next season’s free agency class to jumpstart life after Kobe Bryant, he will have no impact on their ability to spend. With a four-year commitment to Hardaway, the Knicks can’t say the same.
With respect to Harris, although the Nuggets didn’t qualify for the playoffs last season, they won 40 games and finished just one game behind the Portland Trail Blazers for the eighth seed. Harris was a major part of that, but more importantly, he wasn’t re-signed by the team with any sort of belief that he would be the alpha. That designation rightfully belongs to one of the most gifted big men we have seen in quite some time, Nikola Jokic. Jokic was rejuvenated with the February trade of Jusuf Nurkic. It cleared space in the front court and allowed him to be the team’s featured player.
Harris was re-signed to serve as a secondary player to Jokic—a player who has shown early signs of being truly special.
Conversely, in New York, Hardaway was signed to a team that knew it was trading Carmelo Anthony and one that should have been trying its best to divest itself of all big money contracts in preparation for a multiyear rebuild.
Rather than adding Hardaway for four years and about $18 million per year, the Knicks could have been better served by looking for ways to clear money off of their books and use any available money under the cap to absorb unwanted contracts from other teams and help to facilitate trades. The Philadelphia 76ers made a habit of doing that under Sam Hinkie and often walked away from trades with a future draft pick to show. Meanwhile, in Brooklyn, this past offseason, general manager Sean Marks was able to absorb the contracts of both Allen Crabbe and DeMarre Carroll because the Blazers and Raptors each desperately needed to trim their payroll.
It would have been wise for the Knicks to operate in the same manner, especially since few believe that Hardaway is capable of being the difference between the Knicks being a team that merely fights for the playoffs, as opposed to one that has a chance to be a contender.
Both viewpoints are reasonable. The fairest conclusion to draw would probably be that Hardaway’s four-year, $71 million contract isn’t a bad contract, per se. In context, it just happened to be a bad contract for the Knicks.
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In the end, Hardaway will have every opportunity to live up to the expectations that his contract yield. As the Knicks embark on their long rebuild, the team will rely upon the draft and a few wise free agent signings to bring them back to respectability.
Whether you love the Hardaway contract or hate it, from a monetary standpoint, it represents fair value.
Gary Harris and the Nuggets just helped to reinforce that point.
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