EastCoast

July 2nd, 2016 at 12:38 AM ^

This free agency period has been thoroughly dumb. $9 million per year gets you a solid back-up. I would be SO ANGRY if I had agreed to a multi-year contract last off-season.

Wolfman

July 2nd, 2016 at 12:59 AM ^

Magic had just agreed to a 5 year, 25 million deal, some chump change like that and as the board alludes to, Free Agency made that seem worthless in about a week's time. Things, obviously, did work themselves out in favor of the Magic Man. Remember when he inked that deal we all felt like we did tonight over this guy's, and Magic is on anyone's all time starting five. 

pmark1210

July 2nd, 2016 at 4:30 AM ^

but everyone knew this was coming. so if they did their deals last year and didn't give themselves the opt out to hit this year, that's on them. next year will be even more money. That's why guys like durant and LeBron have opted out and will probably only sign 2 year deals with player option after 1.

EastCoast

July 2nd, 2016 at 12:43 AM ^

Any other off-season I would agree, but this one has been a circus.

If the salary cap had gone up more gradually, that money would be going to other, better players.

I mean, hell, Evan Turner got a four-year/$70 million contract. My 76ers previously traded him for two second round picks....and it wasn't considered a bad trade.

I Like Burgers

July 2nd, 2016 at 8:29 AM ^

I have to wonder how this is going to play out in the locker rooms. I mean think of your own workplace. If everyone was on a relatively equal pay grade one day, and then the next the dude in the cube next to you is suddenly making 10x more and Janice in accounting is now driving a Range Rover and talking about her second vacation home, that would piss me off a bit.

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MaizeAndBlueWahoo

July 2nd, 2016 at 10:05 AM ^

You know what his real value is?

$153M for five years. Because that's what someone was willing to pay.

Kinnnndddd of.  Actually, in economics, auctions (and free agency is essentially an auction) have a winner's curse, where the winner overestimates the value of what's being auctioned.  This happens a lot in sports free agency.

I Like Burgers

July 2nd, 2016 at 1:52 PM ^

Yeah this is more of a case of someone winning the lotto and buying a gold plated jet ski just because they can. Doesn't mean its a good idea or economical.  Just means you can do it.  NBA teams have an influx of cash, they all have to spend at least $85M of it, so yeah, why not overpay for something.

And in 3-4 years when NBA rosters are full of these cap binge salaries it won't be such a good idea.

ska4punkkid

July 2nd, 2016 at 12:53 AM ^

How do NBA and MLB players make so much more than NFL players? Seems like NFL is the more dangerous employment, not to mention the most popular sport in America. Are the NFL revenues just not that big or what?

drz1111

July 2nd, 2016 at 2:06 AM ^

Here's the rigorous answer. In US pro sports, players get between 35-50% of revenues. That's higher than for a typical business. See:

http://cdn.fangraphs.com/blogs/wp-content/uploads/2015/03/mlb-nfl-nba-p…

Aggregate salaries, as a percentage of revenues, have been generally falling in most sports over the last 20 years. That's mainly cause of two factors: revenues are rising faster than salaries readjust and most of the sports unions have been quasi-broken over the last several years, since lots of players live quasi-paycheck-to-paycheck and can't afford a long strike (or put more charitably, their years of maximum earning power are short and they can't afford a long strike). Either way that gives ownership a huge advantage in labor negotiations.

So before going into the details, keep in mind that aggregate player salaries in the NBA, over the long term, have been going down. NBA players are more screwed than enjoying a windfall.

But, the NBA has some weird salary dynamics. The best NBA players are much more valuable than any other players in any other sports other than, perhaps, NFL QBs, because the better a player is,the more possessions can be funneled to them. LeBron is involved with the vast majority of Cavs possessions. Compare with MLB, where the best players in the top of the lineup only bat like 10% more than the guys batting 8th over the course of the season. So you'd expect the best NBA players to be by far the best paid players in sports - IIRC, LeBron is worth well north of $50M a season in a free market - with guys on the bench taking a disproportionately low share of revenue compared to other sports.

The NBAPA specifically negotiated so that wouldn't happen. First, they agreed to a max salary that's way lower than the "true" value of top players. So there more money left over for average players and scrubs than you'd expect. Second, in exchange for agreeing to a salary cap, they negotiated for a salary floor that's much higher, relatively, than other sports. Both the cap and floor are tied closely to revenue. So effectively all teams have to spend within a narrow band, max players are grossly underpaid and the net result is that salaries for average or worse player get grossly inflated. It's very communist, but it trades the upside of salary inflation (at times, in some sports, players have gotten 50-60% of revenues, much more than NBA players get today) for a guaranteed baseline and higher salaries for the majority of their union (i.e., the shitty players).

For what it's worth, at the time people thought this was an awful deal for the players, but it turned out to be a good result for everyone but the LeBrons of the world. Baseball players refused a cap, but also refused a floor; as a result, the owners figured out ways to drive down salaries with bullshit "competitive balance" rules that they pimped to the public as being a way for small-market teams to compete, but were really thinly-veiled mechanisms to remove the incentive of large-market teams to spend by reducing the marginal revenue a team received when they won. By making mediocrity relatively more profitable, MLB set up the current dynamic where salaries are stagnant (and an ever-shrinking percentage of revenue) and big market teams (the Dodgers excepted) don't really try to spend to win anymore, since the marginal cost per win is greater than the marginal revenue. It acts as a de facto cap without the floor that protects players in the NBA.

drz1111

July 2nd, 2016 at 4:27 AM ^

It's 1 - endorsements; 2 - Union selling them out (great players are inherently outvoted; unions always serve the majority of workers at the expense of the best performers); 3 - marginal value of each dollar being less for someone like LeBron than for the second guy off the bench, and the lower max helps players like LeBron win championships.

In the NFL, you see QBs voluntarily reducing salaries bc unless they do, it's basically impossible to win. In the NBA, if you had no max salaries, you'd probably see the same dynamic. Otherwise, at theoretical equilibrium, all players are paid a fair salary for their value and stars just leave less money against the cap to spend on a supporting cast; LeBron teams (which would be LeBron surrounded by scrubs) would be no better than a team of 5 decent guys, assuming everyone performed as expected when the contescts were signed.