Tuesday, February 20, 2018

Cap Mania: How NBA Teams Are Beginning to Fix Their Overspending Problem

by John Nygren

Over the past two seasons, the NBA's salary cap has increased significantly (raised from $70 mil in 2015-16 to $96 mil in 2016-17 and $107 mil in 2017-18). As a result of this sizable spike in the amount of money all 30 teams can spend, huge contracts have been handed out like candy on Halloween. Everyone from marginal role players to franchise cornerstones that are eligible for the newly-implemented super max deals, which allow any player that's been in the league for at least eight seasons to receive $70 million more from the last team they played for (in most cases, the team that drafted them) than they would if signed elsewhere in free agency, that have been fortunate enough to hit the open market since this cap increase kicked in has absolutely cashed out. Having more money to work with has undoubtedly affected how teams approach building a roster and based on the moves (or lack thereof) that have been made since the start of the 2017-18 season, we're starting to see teams get smarter at managing their assets after two years of reckless mass spending around the league.

This recent shift in spending philosophies can be traced back to the fair amount of miscalculated, team-paralyzing contracts that were inked back in July 2016 when this salary cap hike was first introduced. Non-contending teams were so eager to add potential impact veteran players to their roster that they threw absurd amounts of money at anyone that was willing to come join their team. The biggest standout among all of these bad deals has to be small forward Chandler Parsons of the Memphis Grizzlies. To be fair, Parsons' ceiling was about as high as any player that was available at his position in his free agency class. He was an explosive, versatile player who averaged around 14 PTS, 5 REB and 3 AST per game as a starter on two different playoff-caliber teams (Houston and Dallas) during the first 5 years of his career. His coveted skill set and fair amount of big game experience was enough to convince Memphis, who had made the playoffs in six consecutive seasons and reached the Western Conference Finals in 2012-13, to sign him to a 4 year/$96 mil deal ($24 mil per season, which was more than any player besides Kobe Bryant made prior to the cap hike).

Six games into his tenure with the Grizzlies, Parsons went down with a bone bruise in his right knee that sidelined him for 17 games and hasn't been the same since. He's since gone onto suffer a partially torn meniscus that ended his 2016-17 season after 34 games and has missed extended periods time in 2017-18 (31 games in total) due to knee soreness. Don't get me wrong, what has happened to Parsons since he arrived in Memphis has been very sad to watch, but the harsh reality is that even if he produced at the same level that he had in the past, he still would've been highly overpaid.

The Parsons deal may have yielded the worst results, but there were plenty of other desperate teams that handed out bad contracts that summer. Nicolas Batum, a pretty talented 2-way guard that was shipped out of Portland due to concerns over his lengthy injury history, signed a 5-year/$120 mil contract to stay with Charlotte after a solid 2015-16 campaign in which the Hornets won 48 games and lost a hard-fought first round playoff series to Miami in seven games. While Batum appeared in 77 games and went on to average career highs in points (15.1) and assists (5.9) per game last season, Charlotte has gotten worse on the whole since he inked his new deal and his multi-year/high money contract status makes him untradeable. Charlotte's insistence on packaging Batum in any potential Kemba Walker trade reportedly deterred Cleveland from making a serious offer for him at the deadline. When Dan Gilbert passes on a chance to add a young All-Star point guard because of the throw-in player's salary, you know you're getting paid too much.

If you look at a majority of the teams that signed these questionable contracts, they're in the worst possible position any NBA team can be in. They're not good enough to make the playoffs and not bad enough to be in the top half of the lottery. This puts them in a nightmare scenario of not having the cap space to land another top-level veteran talent in free agency or getting to enjoy the luxury of getting to select a potential franchise-altering superstar at the top of the draft or flipping the pick for an established star.

Now that we're somewhat removed from the shininess of having a new cap, there appears to be to hope on the horizon. With teams starting to learn how to manage having over $100 mil in available money every year,  players are starting to receive more reasonable contracts.

A perfect example of this new line of thinking is the 3 year/$24 mil extension the Clippers gave Lou Williams earlier this month. This is a sensational value for a player that's still in his prime at 31 and is currently averaging career-highs in points (23.2), assists (5.3) and free throw percentage (89.5%).

Now let's compare Lou Will's deal to Jordan Clarkson's-a player with a similar skill set and role as a top offensive option off the bench that was just traded to Cleveland because of his contract. Clarkson was one of the lucky ducks to cash-in on that new cap overspending by returning to the Lakers on a 4 year/$50 mil deal. While Clarkson's numbers have been pretty good (14.6 PTS, 3.0 AST, 3.0 RPG, 44.6 FG% over the past season and a half), his productivity level wasn't enough to justify his $12.5 mil annual salary. As solid of a spark-scoring threat as Clarkson is, it's hard to argue that he's worth $4.5 mil more per season than a previous Sixth Man of The Year winner that's consistently posted better numbers in a similar number of minutes played.

The ripple effect from Lou Will's contract is pretty much guaranteed to felt in free agency this season. Handing a veteran sharpshooter whose averaged over 15 points per season on four different teams since the start of the 2014-15 season $8 mil a year has returned negotiating leverage to the owners and effectively ended overinflated contracts for role players. Barring some unforeseen tomfoolery in July, this deal should significantly lower the asking price of other talented guards that are set hit to free agency this summer (Will Barton, Avery Bradley, Rodney Hood, Marcus Smart) from their initial asking price of $12-15 mil per year down to somewhere around $5-8 mil per year.  

An influx of teams placing a higher value on team-friendly rookie contracts have also played a part in the end of complementary players getting overpaid. As you saw at this year's trade deadline, most teams would rather hold onto guaranteed low-salary guys that give them flexibility for multiple years then cash in their chips for a high-priced rental that more than likely won't factor into their long-term plans. In a league where superstars eat up a large portion of the available cap space, you need contributions from 2nd-round picks, undrafted free agents and overseas players to build cheap depth on your roster more than ever.

There are 2 words GM's need to keep in mind as this potentially game-changing free agency approaches: Flexibility and versatility. Being able to find the right balance of young players to develop, role players on reasonable low-to-mid level contracts and stars that command top-dollar within a 3-4 year window is a very difficult task that is essential to building a successful team in the modern NBA. While there's no doubt that the players that missed out on the spending sprees of the past 2 summers will leave the negotiating table with a bad taste on their mouth, teams will have a great opportunity to redeem themselves by signing quality players to reasonable contracts.

For more NBA news and reactions, make sure to follow me @JohnNygrenBOS on Twitter or shoot me an email at johnnynygren@gmail.com Thanks for reading.

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