In light of Tyreke Evans’ departure, I find myself reflecting on all of the weirdness that is restricted free agency in the NBA. While I certainly cannot claim to know about the intricacies of player contract negotiations, a survey of restricted free agent contracts of the past few years indicates that the wait-and-see approach that the Kings used in wih Tyreke Evans may not have been the best course of action. It always sounds like a good idea to let the market decide a player’s value, but in fact, many of the worst contracts in the NBA right now are the result of restricted free agency and some of the highest-value contracts were negotiated as extensions before a player hit restricted free agency. Let’s take a look at some comparable situations in recent memory. First, the high-value extensions:
Less than a year ago, the Warriors negotiated a contract with Stephen Curry for 44 million over four years. The sharp-shooting point guard had shown flashes of brilliance, yet struggled with injuries over the course of his first three years in the league, playing only 26 games during the lockout-shortened 2011-2012 season. However, after signing the extension, Curry had a breakout season, playing in 78 games and averaging 22.9 points and hitting 45% on three pointers while setting the NBA record for most three pointers in a single season. Had the Warriors allowed him to hit restricted free agency, there is no question that he would have received a maximum offer sheet from an NBA team. Instead, the Warriors have arguably the best shooter in the NBA locked up for only 11 million a year.
The Oklahoma City Thunder have a young, athletic, shot-blocking big man locked up for four more years at 48 million. Players with Ibaka’s size and shot blocking ability tend to get paid more than guards, which is why it’s still a good contract for the Thunder, even though will make more than Curry. If Ibaka had hit the restricted free agency market after playing 80 games and averaging 13.2 points on 57% shooting, 3 blocks and 7.7 rebounds per game, there is a very high chance that a team with cap space, such as the Cleveland Cavaliers, might have offered him a max deal this summer. Instead, the Thunder have a quality defensive big at a reasonable price for the foreseeable future.
Soon after Rondo signed his extension for 55 million over 5 years in 2009, he emerged as one of the top point guards in the NBA. If he had hit restricted free agency in 2010, he would have surely gotten a huge offer. That was the year in which every team was clearing cap space to sign LeBron James, and there is no question that one of the teams who missed out on the LeBron sweepstakes, such as the New York Knicks or the Los Angeles Clippers, would have made Rondo a max offer in hopes of making a splash. Instead, Rondo is a Celtic with a contract that is affordable enough that the Celtics are likely to keep him around as they attempt to rebuild.
Jrue Holiday agreed to a four-year 41 million extension last November. He then proceeded to average 17.7 points and 8 assists (nearly double his per game average from the previous year) for the 76ers en route to his first all-star appearance. While he has since been traded to New Orleans, there is no question that his current contract is significantly lower than the one he would have received in restricted free agency this summer.
All of these potential or actual All-Stars are under contract for less than the max with the teams that drafted them. Now, let’s look at what can happen when teams allow their players to enter restricted free agency.
After the Clippers traded Eric Gordon to New Orleans for Chris Paul, it was expected that Gordon, who averaged 22.3 points for the Clippers in the 2010-2011 season, would be New Orleans’ franchise player. However, considering he was injured for most of his first season in New Orleans, the team declined to offer him an extension. That didn’t stop the Phoenix Suns from offering him a max contract (four years, 56 million) in restricted free agency the next summer, which New Orleans matched. Gordon’s contract is now considered an albatross on a roster that also includes Tyreke Evans, Austin Rivers, Jrue Holiday. The Pelicans have clearly decided to move in a different direction rather than build around Gordon, yet his contract is now very difficult to move. It’s a situation that likely could have been avoided had New Orleans managed to negotiate an extension similar to the ones signed by Curry, Holiday or even Ty Lawson (four years, 48 million).
When Portland Trail Blazers forward Nicolas Batum entered the restricted free agent market last summer, his expected value was in the 36 to 40 million range. However, the Timberwolves made an aggressive push to sign the small forward, offering him 46.5 million over four years. Clearly, the offer was designed to dissuade the Trail Blazers from matching. Batum averaged nearly 14 points, 4.6 rebounds and only 1.4 assists in his fourth year in the league. The Blazers ended up matching the deal, and while Batum has improved, the fact that he is making even more than Tyreke Evans over the next few years indicates that his contract is quite steep. If the Blazers had offered him a 40 million dollar extension before he hit restricted free agency, they could have saved 6.5 million.
This is a bit of a different situation considering the Knicks picked Lin up in the middle of the season and didn’t have the option to offer him an extension during the middle of Linsanity. However, the Rockets structured a contract with a poison pill that was designed to hit the Knicks with a huge luxury tax bill in the third year of the deal. The Knicks declined to match, Lin went to Houston for 3 years and 25 million. All indications pointed to Lin wanting to return to New York and if the Knicks had offered something like 20 million over three years, structured in the typical NBA way, they might have been able to keep Linsanity alive at a reasonable price. Recent Reports as recent as July 7 indicated that Lin’s contract had the Rockets shopping him.
The Raptors signed the New York Knicks forward to a three year, 20 million dollar contract last summer. This was a strategic gamble that the raptors made in hopes of landing Canadian-born Steve Nash (http://www.cbssports.com/nba/blog/eye-on-basketball/19487134/raptors-extend-offer-sheet-to-landry-fields-in-order-to-secure-steve-nash) , which did not end up working out. This deal also had a poison pill, which was enough to keep the Knicks from matching. Unfortunately, it also means Landry’s trade value is very low. Landry is a fine player, but if the Raptors had not been trying to manipulate the situation so heavily and a team had simply offered Landry fair market value, it is very likely that Landry could have signed a midlevel deal at about five million a season, which is a far more reasonable contract.
If there is anything to be learned from these examples, it is that the very nature of restricted free agency often leads to a team overpaying for a restricted free agent and daring the incumbent franchise to match the deal. When teams negotiate extensions with their players, they avoid the awkward situation of being forced to match an unreasonable deal and often successfully secure building blocks for the future at fair-value contracts. Perhaps the best example is a comparison of arguably the top two centers in the Eastern Conference: Roy Hibbert and Joakim Noah. The Pacers let Hibbert become a restricted free agent and ended up paying him 56 million over four years, while the Chicago Bulls negotiated an extension with Joakim Noah worth 60 million over five years. While Noah’s contract is longer, his annual salary is two million less than Hibbert’s on average.
While the Kings off the court situation over the last year certainly had an impact on the way the front office handled Tyreke Evans contract situation, there is plenty of evidence to suggest that the team could have agreed to an extension worth considerably less than the 44 million Tyreke will make in New Orleans over the next four years. Considering the situation at the time when Vivek and co. took control of the team, I don’t have a problem with acquiring Greivis Vasquez in a sign and trade. Vasquez is a true point guard and honestly a better fit for the Kings roster, considering the presence of Marcus Thornton and rookie Ben McLemore. However, it is hard not to wonder what could have been if the Kings had agreed to extension with Evans last fall.
There’s no need to dwell on the past, but the Kings organization would be wise to take recent history into account when considering how to proceed with DeMarcus Cousins in the next few months. Cousins reportedly wants a max contract, but declining to make him an offer and allowing him to enter restricted free agency could be the only way to guarantee that he gets one.