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Tuesday, July 23rd, 2013 at 3:37 pm  |  22 responses

Staying Stuck In The Mud

The recent history of bad contracts and why they happen.

by Leo Sepkowitz | @LeoSepkowitz

Bad teams are bad for a lot of reasons. Typically, it’s because they’re terrible at free agency and/or the Draft. Bad draft picks are forgivable—after all, teams are trying to project how teenagers will be playing a decade later, and we’ve all fallen in love with prospects who don’t pan out. So let’s focus on the free agency thing.

Bad teams have always had a tough time luring big free agents, but that doesn’t mean they haven’t been spending money. The impatient bad teams try to force their way into relevancy by overspending in the free agent market. Since typically the better, smarter, bigger market teams with deeper pockets pick through all of the elite FAs early on, suddenly, the Detroits and Torontos of the League are sitting on $15 or $25 million in cap space and the top names left are Ben Gordon, Charlie Villanueva and Hedo Turkoglu. That’s how this and this happened in ’09, anyway.

Here’s my theory: The more superstar free agents in a given class, the more bad contracts will be handed out that summer. I’m not counting giving max money to the likes of Joe Johnson or Rudy Gay or David Lee—it’s too much for those guys, but there’s something to be said for landing sure-thing productive players.

I’m not even criticizing contracts given to young guys who are hopefully on the rise. Tyrus Thomas’ five-year, $40 million deal in 2010 is a good example of this. Depending on how you feel about Tyreke Evans, his shiny new $44 million contract might seem pretty unreasonable. But the Pelicans are taking a chance on a young guy they hope is about to hit his prime, and I can’t really fault them for that. The Blazers rolled the dice on Nicolas Batum last year in a similar situation and it worked out.

The killer contracts involve mediocre teams and mediocre players who have plateaued, and whose production could be nearly matched by a different player at a fraction of the cost. It’s usually OK for great teams to overspend on those guys to fill in the final holes—Miami committed about $65 million long-term to Mike Miller, Joel Anthony and Udonis Haslem in 2010, but they won two titles in three years with them. When bad teams try to pull off the same stunt, though, it always fails miserably.

Bad contracts are nothing new. There were the Big Three in ’09. In 2004, 29-year-old Mark Blount got a six-year, $41 million deal. The Knicks gave Jerome James $30 million over five seasons in 2005. Jim McIlvaine’s whopper of a monstrosity in ’96 ultimately led to Shawn Kemp’s departure from Seattle. The list goes on and on and on.

For the sake of this story, though, I’ll trace them back to 2010, when the NBA saw an all-time free agent class hit the market, and an unbelievable amount of stupid money thrown around by GMs across the League.

2010
Top Free Agents:
LeBron James, Dwyane Wade, Dirk Nowitzki, Chris Bosh, Amar’e Stoudemire, Joe Johnson, Carlos Boozer, Yao Ming, Rudy Gay, Paul Pierce and David Lee.
Panicked Teams:
Suns (lost STAT), Toronto (lost Bosh), Nets (whiffed everywhere), Bucks.
Bad Long-Term Deals
:
John Salmons, Bucks—5 years, $39 million
Drew Gooden, Bucks—5 years, $32 million
Brendan Haywood, Mavericks—6 years, $53 million
Travis Outlaw, Nets—5 years, $35 million
Johan Petro, Nets—3 years, $10 million
Al Harrington, Nuggets—5 years, $33.5 million
Linas Kleiza, Raptors—4 years, $18.8 million
Amir Johnson, Raptors—5 years, $30 million
Channing Frye, Suns—5 years, $30 million
Josh Childress, Suns—6 years, $30 million
Hakim Warrick, Suns—4 years, $18 million
Darko Milicic, Timberwolves—4 years, $20 million

Holy shit! Combined, those 12 form a $72.23 million annual payroll—above the luxury tax line without a point guard. There’s literally not a single guy on that list who could start on a real playoff team (I.e. not ’12-13 Milwaukee), and the only player I’d feel comfortable giving more than six minutes is Amir Johnson…and each of them got at least a four-year pact with the exception of Petro, whose first year in New Jersey was legitimately one of the worst basketball seasons ever played.

Gooden, Haywood, Outlaw, Kleiza, Childress and Darko have been amnestied. Only Frye and Johnson are still with the teams that signed them in 2010. (PS: Darko was acquired with with cash considerations for Brian Cardinal five months before Minnesota signed him. As in, he was less valuable than The Custodian.)

2011
Top Free Agents:
Nene, Tyson Chandler, David West, Marc Gasol (RFA). One set of rankingshad 39-year-old Grant Hill listed as the ninth-best free agent on the market. Another had Samuel Dalembert in at No. 8. Basically, the free agent class sucked.
Panicked Teams:
None.
Bad Long-Term Deals
:
Tayshaun Prince, Pistons—4 years, $27 million
Jason Richardson, Magic—4 years, $25 million

You could do a lot worse than these two. Nobody was clearing the books to try to lure the likes of Nene, Chandler, West or Gasol. Additionally, only a couple of the top players on the market jumped teams. Ultimately, not many teams had huge cap space and not many teams had to scramble to fill rosters after striking out on Plan A.

The new CBA, which debuted in immediately after the lockout, had a lot to do with curbing the amount of regrettable contracts handed out. The agreement made contract lengths shorter and salaries lower.

2012
Top Free Agents:
UFA: Deron Williams, Steve Nash. RFA: Roy Hibbert, Brook Lopez, JaVale McGee, Eric Gordon, Nicolas Batum.
Panicked Teams:
Suns, Raptors.
Bad Long-Term Deals:
Michael Beasley, Suns—3 years, $18 million
Landry Fields, Raptors—3 years, $18.75 million
Steve Novak, Knicks—4 years, $15 million
Marcus Camby, Knicks—3 years, $13.2 million

Phoenix spent on Beasley after NOLA matched their max offer on Gordon. The Raptors gave Fields that offer sheet to prevent him from being traded by New York to Phoenix for Nash, who Toronto wanted. New York overpaid for Novak after an awesome season and got duped into thinking Camby had more left in the tank than he really did. Dallas whiffed on Deron, but was smart enough to sign guys to one-year contracts and keep the flexibility going forward.

After going 86-219 (39.3 percent) from deep in his rookie season, Fields hit 2-14 (14.3 percent) threes last year. One year down, two to go. (Also, the Bargnani trade gave Toronto 3/4 of the moronic contracts inked last summer.)

Beasley attempted very nearly one shot per two minutes on the floor last season—a rare feat for anybody who played even slightly reliable minutes. One year down, two to go.

2013
Top Free Agents:
UFA: Dwight Howard, Chris Paul, Josh Smith, Andre Iguodala, Al Jefferson, Paul Millsap, Monta Ellis. RFA: Nikola Pekovic, Jeff Teague, Brandon Jennings.
Panicked Teams:
Mavericks, Hawks, Bucks.
Over the past few seasons there have been a bunch of examples of teams failing to properly recover when Plan A falls through. The one thing you don’t want to do is give out long-term money to guys exiting their primes. Right? We’ve learned that much, right? I mean, at the very least teams should be doing what the 2012 Mavs did or else throw money at a guy with upside, right? RIGHT?
Bad Long-Term Contracts
:
Jose Calderon, Mavericks—4 years, $29 million
Kyle Korver, Hawks—4 years, $24 million
Kevin Martin, Timberwolves—4 years, $28 million
Zaza Pachulia, Bucks—3 years, $16 million

NNNNNOOOOOOOOOOOOOO!!!!!!

I don’t totally hate the Calderon contract. Dirk is 35, and I understand not wanting to waste a year of his career at this point. Dallas grabbed Monta Ellis with a not-so-bad contract (three years, $25 million), and should have some wiggle room next summer, though it will be largely tied to what Dirk’s I’m Retiring Here extension/pay cut looks like.

Calderon runs a nice offense and his teams do pretty well when he starts, but giving him a four-year deal is ludicrous. It’s just hard to imagine which teams the Mavs were bidding against there. Most teams have point guards at least as good as Calderon. The teams that don’t either didn’t have enough money to match Dallas’ offer (New York, Miami) or are rebuilding and wouldn’t give a 31-year old four years. Do they really want Jose Calderon in 2017?

The poor Hawks, who literally have not been in the Conference Finals since moving to Atlanta in 1968, finally had a prayer. They cleared out massive cap space while keeping cornerstone Al Horford, and then stole Paul Millsap for $19 million over two years. With the Jeff Teague situation still up in the air, the team had about $25 million to play with. They decided to spend about a quarter of it on a four-year deal for a 32-year-old spot-up shooter. They could have had big cap space again next season with a Teague/Horford/Millsap core, but instead will likely have shy of $10 million to spend with a Teague/Horford/Millsap/Lou Williams/Korver lineup. They limited their ceiling in a big way.

I don’t know what Minnesota’s initial plan was, but I hope it wasn’t spending lots of money on a declining 30-year-old shooter who shot 38 percent in the Playoffs and can’t play defense. Couldn’t they have signed Marco Belinelli for half the years and 21 percent of the money to pack a similar offensive punch as Martin? Long-term, Kevin Love will be a free agent in 2015. With this summer’s moves, Minnesota will be strapped in ’15, unable to improve the roster to give an already grumpy Love a reason to stay. I think they’re really going to regret the Martin signing.

In the midst of letting everybody go to clear cap space, the Bucks signed Zaza to join a crowded frontcourt (Sanders, Ilyasova, Udoh, Henson, Delfino, Ayon). They could have just signed Ronny Turiaf to be 70 percent as good at 20 percent of the cost. Or just not bothered at all since nearly their entire roster is 6-10 or taller. Milwaukee is in denial about their transition period, which is an extremely dangerous phase. They could have entered a new era, but will instead keep picking between 10 and 18 (though maybe that’s a good thing, since Yi Jianlian and Joe Alexander were their last two top-nine picks).

Why Does This Keep Happening?

Maybe some front offices haven’t been paying attention to the impact of overspending on marginal players. Maybe they weren’t paying attention when Tony Allen proved to be a much more valuable post-season commodity than Martin, who wound up with a richer contract. Maybe they weren’t paying attention when the successful teams built their rosters either by drafting well, spending max money where it was deserved, or both.

Maybe the most blame falls on the owners, who don’t allow their front offices the time to properly construct a roster. It’s easy to say that teams like Phoenix and Toronto should tank in the name of stockpiling high draft picks and money, but there’s a thin—and maybe non-existent—line between being in a fun rebuild mode and being horrible year after year. For some franchises, putting a seventh-seed product on the court in the short-term will always trump pitching big cap space and a top draft pick to fans. There’s nothing really wrong with that, but it’s not how winning teams are built.

We also can’t forget that some front office members aren’t great at their jobs. That’s why 12 guys were grossly overpaid in 2010, and it’s why within the first five days of ’13 free agency, four guys inked deals for way too many years at way too much money. And that’s why it’s all going to happen again in 2014, probably in the most horrendous way since the infamous Summer of LeBron.

A year from now, James, Kobe, Dirk, Wade, Melo, Pierce, Deng, Bosh, Gay, Pau and Z-Bo can hit free agency. Granger, Lowry, Gortat and Bogut will be there too as *gasp* fallback options for teams that whiff on their top targets. The group of restricteds will feature Paul George, DeMarcus Cousins, John Wall, Greg Monroe, Larry Sanders, Derrick Favors and Eric Bledsoe. Miami, Lakers, Dallas, Cleveland, Washington, Orlando, Philadelphia, Detroit, Utah and, wait for it, Phoenix and Toronto are all set to have varying degrees of cap space ranging from “we can get one max guy” to “we can get every free agent in every sport.” Additionally, Chicago can enter the race if Deng walks and they amnesty Carlos Boozer (they will). With the Bulls in the mix, there will be at least 12 teams looking to spend big, with roughly 10-15 max guys available for the taking.

We saw a similar overall picture in 2010, and it ended in a majestic display of shortsightedness and panic. Should be fun.

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  • Kris

    Did you feel like including Amir Johnson on the list just for the sake of including his name/contract? He’s STILL on the Raptors and that contract is looking like a GOOD deal not a ‘BAD’ one.

  • JL

    I’ve thought about this before, and another aspect of it is that teams need to field a team. Putting a bunch of d leaguers out there will most likely alienate most fans who don’t have a long term vision. That said, the frequent bidding against themselves (I think it’s a product of agent persuasion) and overpaying for old/overrated talent is their own damn fault.

  • http://triplejunearthed.com/dacre Dacre

    I love articles like this…. now I want NBK and shock exchange’s input. 0_o

  • http://triplejunearthed.com/dacre Dacre

    Do teams need to spend all their money? If you sign 15 guys for 3 million each a season and only spend 45 mill on contracts does the league fine you?

  • patrick

    The Pekovic contract is the best one out of the bad ones imo. Pekovic is the most underrated center in the league imo. Very powerful around the basket

  • Ugh

    Not quite, but it is more complicated than most people think as there is a minimum salary based around a player’s number of years in the league, how long they’ve been with a team, etc. Haslem costs the Heat more per year than an undrafted European rookie the same age would, for eg.

    More influential on bad spending is that a mediocre team can make more profit than a good one – Phoenix fans pay as much to watch Beasley take bad shots as Nets fans will to watch KG take 5 a game. There’s not as many reasons to pay him less than his agent demands when viewed in those terms.

  • http://triplejunearthed.com/dacre Dacre

    What then is stopping a gm from just not spending?

  • MGN

    Come on! How could you not include Amare and Boozer in 2010 bad contracts?

  • Leo Sepkowitz

    How is his being on the Raptors relevant? In the three years since he inked his contract, he’s averaged 9.6 & 6.4, 7.1 & 6.4 and 10 & 7.5 this past year. He’s an alright guy off the bench with $13.5 million left over the next two years. What’s good about that contract?

  • Leo Sepkowitz

    Those are bad contracts now, but at the time they were worth it. Amar’e posted 23 and 9 while playing all 82 in his last year with Phoenix and made NY desirable to Melo, for better or worse. Boozer put up 19.5 and 11 in ’09-10, and is still sneaky good—he averaged 16 and 10 this past year and was huge in the first round against Brooklyn. It’s alright to overpay to get guys like that on your team. STAT’s injury and chemistry problems are just tough breaks.

  • Leo Sepkowitz

    Great question—for ’13-14, the League mandates that each team must spend no less than 90% of the salary cap on payroll. That’s about $53 million next season.

  • Leo Sepkowitz

    I don’t think Pek’s likely deal will be a bad one at all. Talented centers get huge contracts. Pekovic will get a notch more than offensively inept guys like JaVale (4/44) and DeAndre (4/43), and he deserves it.

  • LP @ThisisEther

    teams must spend 90% of cap

  • LP @ThisisEther

    That Amir Johnson contract isn’t bad, he was playing with and behind Bargani….. he averaged 10 and 7.5 this year, but thats in 28 minutes per game……6 milly a year for an upcoming power forward who is actually doing ok in the league? I’ll take it….

  • i_ball

    How much did OKC give Perk?

  • Yao’s foot

    You posted his points and rebounds, but forgot to mention his defensive contributions, averaging over a steal and block a game, and he is actually a pretty good post defender. Dude’s still very raw, and this upcoming season will speak volumes about how good that contract really is.

  • JackPackage

    Good, now do a piece on the overwhelming lack of interest shown by NBA GM’s in developing young drafted talent.

    Also, the Amir Johnson contract was not a bad contract at all. He’s averaged about 10 & 7 with a steal and a block per game, whilst playing good defence… For $6 million a year. That contract is good value, nothing can convince me otherwise.

    Kinda like the Seattle Mariners/Adrian Beltre contract. They signed him after a career year at the plate and people called it a bad contract because he didn’t replicate his offensive numbers at the plate in Seattle’s cavernous park but stats wise, his defence alone was worth the price of his contract.

    Amir Johnson just finished outside of the Top 50 in PER last year. I don’t really like PER, I’m just saying, however you look at his stats, he is worth more than $6 million a season.

    NBA GM’s utterly perplex me, case in point. This off season, teams largely ignored and underpaid; JJ Reddick, JJ Hickson, Corey Brewer and Nate Robinson. Teams could have had any three of those players for the same price as Josh Smith signed for. Both JJ’s are starting 5 quality and Brewer and Nate are elite bench players. What’s Josh Smith? A mercurial talent who almost takes as much away on the offensive end as he adds on the defensive end?

    Monta Ellis 3/25. Nate Robinson 2/4. Dafuq?

  • Tuomas Uotila

    Here in Finland, we have a saying that roughly translates to “It’s not the person asking who’s dumb, it’s the one who pays”.

    On that note: kudos to you, Johan Petro.

  • Sulsbruck

    The Food part about The korver contract, is that it decreases every unlike most other. I don’t hate the deal sine it is gonna take a couple of years anyway for the rookies to blosom.

  • Sulsbruck

    Sorry for the terrible gramma. iPhone hell

  • Basketball_iQ

    Take perk away from okc and they don’t smell the 2nd round

  • i_ball

    Well they will sign a different center or two with that money. I know he is supposed to be a really solid defensive 5 but he can’t even score on a lay up… He is not worth that much money. I think he gets paid more than Asik for example. And if the two of them swap teams OKC is going back to the Finals.

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