OT - NBA Max Deals

Submitted by Butterfield on July 2nd, 2012 at 11:12 AM

http://sportsillustrated.cnn.com/2012/writers/sam_amick/07/01/roy-hibbert-trail-blazers-pacers-free-agency/index.html 

I like Roy Hibbert.  He's a very good player and very much a helpful piece to any center-less team wanting to contend for a title.  I'd love him on my tema.  That said, Roy Hibbert will now have a max contract, whether it be with the Blazers or the Pacers, if they choose to match. 

My main question is:  How must the league's actual superstars -  the guys who change games, not just impact them (e.g. Durant, Bryant, James, etc.) - feel when they can't earn more money than a solid but hardly star-worthy guy like Hibbert?  Is this just another example of owners sabotaging the intent of their own CBA by handing out big deals to guys they were not originally intended for?  Or am I wrong thinking that Hibbert doesn't have the same impact on a team as a Kobe Bryant or Lebron James? 

 

Comments

dlcase1708

July 2nd, 2012 at 11:16 AM ^

I don't understand him getting a max deal.  I feel like you, that only superstars should be able to get that sort of money.  Joe Johnson, for instance, also doesn't deserve the max deal he got.  But, NBA GMs are known for being dumber than the GMs of almost any other sport.  That's the only reasoning I can possibly have for Hibbert getting a max deal.

coldnjl

July 2nd, 2012 at 11:18 AM ^

Hibbert is an all star at a position of scarecity. Being 7-2, 260 lbs who can score, rebound, and block shots. He is also 25 years old. How many other players in the NBA fit that mold? It is also only a four year contract, so it doesn't go that long, and therefore probably considered a safe bet by the Blazers and PAcers (who will match it). 

Butterfield

July 2nd, 2012 at 11:36 AM ^

I don't disagree with you that Centers are valuable due to the whole supply/demand thing, but his best season (this last), he averaged slightly under 13 ppg and around 9 rpg.  Those numbers alone don't warrant a max deal in my mind, even though decent players at his position are relatively scarce. Somebody has to fill those All Star Team center slots and Hibbert was one of the best of the unimpressive group IMO.  
 

I suppose this is like the whole left handed pitcher thing in MLB, which I never quite got either.  Teams will shell out outrageous contracts to decent left handers when they could get righties with better numbers for less money/years.  

akearney50

July 2nd, 2012 at 11:27 AM ^

A few years ago, nbadraft.net had an article about many NBA players are actually worth a max deal. I don't remember the hard figures but I believe it said that there are less than 10 players at any time that deserve a max deal. The criteria of wins, people in the seats, tv exposure, merchandise, etc. It was very interesting.

And yes, Hibbert's deal is exactly the reason the owners locked out the players.

Erik_in_Dayton

July 2nd, 2012 at 11:47 AM ^

That matches my humble and not-terribly-well-informed opinion, which is that NBA teams give out max deals way too often and that doing that is just about the worst mistake you can make.  A guy has to be truly elite, IMO, to warrant saddling yourself with the lack of options left to you under the salary cap when you've given out a max deal. 

bluesalt

July 3rd, 2012 at 9:29 AM ^

There are certainly some players who are overpaid.  That happens in every sport (not to mention field of work in general.)  But I think the max salary makes it so that some players, who would command and be worth more than a maximum contract were there no such restrictions, get paid less than they would.  This makes it so that some other players, who are worth less, get paid the same, because some of that #1 star money is going to #2 stars.  Furthermore, as there are more #2 star player, suddenly every team has 1-2 max contracts, or three in some cases, and this is what you're left with.

Again, certainly some players don't deserve it (Rashard Lewis), but for the most part, the mere existence of a maximum salary that's lower than 5-15 players would command in a truly open market obscures what some players are worth. Now you can compare what everyone's making to Lebron, and say "that guy gets paid what Lebron is paid -- he's overpaid!" when the statement "that guy gets paid what Lebron is paid -- Lebron is underpaid!" might be more accurate.

JeepinBen

July 2nd, 2012 at 11:37 AM ^

So much goes into a stupid NBA deal it's amazing how many of them actually happen. All the things mentioned above are good points, so here's a few more:

Salary Floor - the NBA instituted a new salary floor that teams must reach. This is part of why the Bobcats took on Ben Gordon's salary, they need to spend enough to be above the minimum. This might lead to some players being "overpaid" based on the market, but for the team involved they may need to "overpay" to make their salary cap numbers.

Restricted Free Agency - Teams may overpay RFAs on purpose to actually get what they want. Let's say Hibbert is worth 80% of a max deal. If Portland offered an 80% max deal, Indiana would match it right away and pay him market value. Instead, Portland offers more than that in the hopes that either: Indiana doesn't want to overpay and Portland gets their man or: Indiana has to overpay their player and hurt their long term cap structure.

I personally like Simmons' idea of "could this player play in the Miami/OKC Finals or woud he not be enough of an athlete" regarding the future of the league. I'm not sure Hibbert could run with them. I think a Max Deal is overpaying, but there's reasons to do it as well.

bd1rti

July 2nd, 2012 at 11:46 AM ^

I not only disagree with the argument. It was only a year ago that the same super athletic Heat team got taken down by a much older and slower Thunder team. Also they got pushed to the brink by a Celtics team that may have been "in their head" if you believe stuff like that, but was one of the least athletic teams in the playoffs. The two best teams this year are more athletic than we have seen, but that does not mean that playing a more traditional style won't work.

 

Furthermore, Hibbert strongly affected multiple games aganst this same Heat team in their series against them. Yes it was without Bosh, but he still had a few monster games. And as is tradition in the NBA if you're a big who shows up for 3 games a year and they happen to be in the playoffs you're going to get a max deal. Just ask Isaiah Thomas I'm pretty sure its somewhere in the CBA.

JeepinBen

July 2nd, 2012 at 12:12 PM ^

Although you meant the Mavs.

3 yeas ago everyone was looking to get bigger to deal with the Lakers and Bynum/Gasol. You really needed 2 bigs to win, which is why the Celtics had Perkins, etc. Then LeBron moved and everyone freaked out, to the point that the C's traded Perkins (who when healthy could have won them a title in LA) for Jeff Green - hoping he'd be able to match up with LeBron.

You could be right, in this age of over-reacting athleticism might become the new "2 big men" in that everyone will look to get more athletic and the Knicks will try to do it with Eddy Curry.

BlueNation

July 2nd, 2012 at 11:40 AM ^

Are we really having a conversation about Roy Hibbert? Damn offseason. Moral of the story is that he should absolutely not get a max deal. Not even close. It's Roy Hibbert...let's be real here.

bd1rti

July 2nd, 2012 at 11:41 AM ^

he is also a center on the blazers and will follow in the tradition of Walton, Bowie, Sabonis and Oden and have his knees implode the instant he touches the court there (goes without saying that I in no way hope for this).

 

Portland has been looking for another big man to team with LMA. This will give them a front line that can compete with the size with the lakers and if Damien Lillard turns out theyll have a playoff team again.

ForeverVoyaging

July 2nd, 2012 at 11:43 AM ^

Since Hibbert hasn't been in the league that long, his max deal will be worth considerably less then what somebody like Lebron or Kobe could get (based on seniority).

Hibbert - 58 mil / 4 years = 14.5 mil/year

Kobe - 90 mil / 3 years, with a back-loaded contract that nets him 30 million next season.

So Hibbert isn't going to be earning at a truly superstar level.

UMaD

July 2nd, 2012 at 11:45 AM ^

One of the main purposes of the CBA (from owner's perspective) is to cap the value of superstars.  Those guys get wildly underpaid.  Other people (like Hibbert) get the money instead.  The goal isn't for each player to get market value otherwise there would be no CBA.

The Shredder

July 2nd, 2012 at 11:50 AM ^

As of late big men are being over paid. There are so few true centers right now that the premium is high for them. The Rockets just offered Omer Asik from my Bulls a 3 year 30+ million dollor deal. The Bulls are cheap as it is. I see no way that they match that for their back up center. Its a back loaded deal with the last year being worth 15mil! Just goes to show what even an avg Big can get. 

And yes these teams go crazy and keep doing the very thing they fought. Like Pay Joe Johnson a trillion dollars

elpigeon

July 2nd, 2012 at 2:22 PM ^

The "Gilbert Arenas" Rule, as part of the new CBA, is the loophole here.

You can read about it here if you want: http://www.cbafaq.com/salarycap.htm#Q44

(Focusing on the third paragraph)

"The second-year salary in such an offer sheet is limited to the standard 4.5% raise. The third-year salary can jump considerably -- it is allowed to be as high as it would have been had the first-year salary not been limited by this rule to the Non-Taxpayer Mid-Level exception."

As I understand it, this is only for RFAs, specifically former second round picks that have 1 or 2 seasons under their belts.

smwilliams

July 2nd, 2012 at 11:51 AM ^

Something you might be overlooking...

Let's say Eric Gordon, a guy you really, really want to sign is available and he's willing to meet with you. Problem is, his hometown team has a lot of cap room and can offer him a bigger deal. How do you prevent your competition from having more money to throw at him? Why, you force them to pay out the ass to keep one of their current players.

I honestly think that's what Portland is doing here. Or they're just stupid.

ForeverVoyaging

July 2nd, 2012 at 11:53 AM ^

Rashard Lewis is a better example of NBA idiocy, IMO. A few years ago, the Magic signed him for more than $110 million over 6 years, which is pretty much the same amount of money Lebron makes with the Heat.

jmblue

July 2nd, 2012 at 12:58 PM ^

But it is kind of funny how the max salary only seems to restrict the superstars' salaries.  You might think there'd be some kind of sliding scale, but no . . . the non-superstars are happily overpaid all the same, and end up sometimes getting superstar money.

UMaD

July 2nd, 2012 at 4:00 PM ^

That's my point.  Lebron (and other superstars) are worth amounts well over what they get for maximum salary.  To be competitive teams have to spend to the TEAM cap.  If there was no INDIVIDUAL cap, those guys would get more money, and the 'overpaid' guys would get less.

I think theres a pretty strong argument that the degree to which they are overpaid are only in comparison to each other.  NBA franchise values keep balooning, so the owners are the real winners here.

dinsdale613

July 2nd, 2012 at 11:59 AM ^

This is why i have major problems with the NBA.  They just had a lock-out because the owners were losingtoo much money.  So they ask the players to take less and even get a frickin amnesty clause to protect them from bad decisons.  And what do they do?  Go out and make more bad decisions.  The NBA Finals just showed the whole league that you dont need or really want that type of player anymore.  The heat won a title with Chris Bosh playing center.  Roy Hibbert is not worth a max contract.  As someone else mentioned, there are only about 10 players in the league who do.  Someone needs to protect the owners from themselves.,  they are going to ruin themselves again.

This is why i think contraction in the NBA is a valid idea.  There is literally not enough talent to go around and the owners make stupid decisions.  Look at this past draft, there were one, maybe 2 franchise players in it.  Cut down the number of teams, which will make the talent pool smaller, then people wont get into a bidding war over Roy Freakin Hibbert

 

1 percent

July 2nd, 2012 at 12:21 PM ^

So you are saying owners who are million to billionaires make such poor decisions they needed to be protected from themselves and are also in favor of a higher unemployment rate since cutting teams costs not just players and coaches but also everyone who gets the stadium ready and businesses that thrive off of gameday.

bronxblue

July 2nd, 2012 at 12:30 PM ^

To be fair, most of those owners made their money independently of sport, so there is no proof that whatever skills made them successful in their business life correlate to similar success as the owner of a pro team.

And regardless, while I would feel bad for those people no longer employed because teams contracted, that happens all the time.  Heck, the entire state of Michigan has been going through that for, what, 20-30 years?  Businesses have to evolve, and when the quality of your product takes a hit because of a dearth of talent, the logical thing to do is stop straining that talent even thinner with more teams than it can properly supply.  Sure, I'm guessing there are fans in Sacramento, Golden State, and Charlotte who would miss their teams, but at the same time those teams have been consistently bad for some time and have mediocre talent.  Sure, they might get lucky and draft/sign a great player who makes them better, but then that just means some other team misses out on that player and likely takes their place at the bottom.  Yes, you have to have winner and losers for any sport to function properly, but when the divide between the good and bad teams is so pronounced and a return to collective competitiveness isn't in sight, then finding ways to address that issue are necesssary.

dinsdale613

July 2nd, 2012 at 12:32 PM ^

In business, if you run a bad business, you should not get to keep said business.  NBA owners did not get rich off of these teams.  They look at them as side projects and investments,  Then, ironically, these men who are by and large great business men do not know how to run their business.  Then you get the Dan Gilberts of the worlds who complain to Daddy when no one wants to come play for them.  They made a bad investment, own up to it.  The impact of contraction would be bad yes, but again, badly run businesses should not get to stick around just because the guy who runs it wants to play at basketball with out any idea what he is doing.

Also remember, a large number of these arenas are not owned by the teams,  so it's not like they would not have others events with which to use their employees

TheLastHarbaugh

July 2nd, 2012 at 2:53 PM ^

The owners clearly need to be protected from themselves. That's what the entire lockout essentially boiled down to. For a bunch of successful businessmen, they have no fucking clue how to run this particular business.

Seriously, the NBA had to institue a max salary rule to prevent the owners from giving mid level players $345,354,634 a year. That's all you need to know.

UMaD

July 2nd, 2012 at 12:25 PM ^

If there are 30 teams and you can fit 2 max players on each team, there should be about 60 max contracts out there.  This is a star-driven league with a huge supply of players in the Battier, Chalmers, Ibaka, Perkins mold and a scarcity of impact players at the perennial all-star level.

Hibbert ain't Lebron, but the Blazers don't get to choose between the 2.  The Blazers have to take their best shot at getting all-star caliber players.  Hibbert, due to his size and age, has a good chance at being a perennial all-star.

I'm not saying he's worth MAX money necessirly, but it's far from outrageous.

Nick

July 2nd, 2012 at 1:15 PM ^

A couple points regarding the lockout and the seemingly hypocritical contracts handed out in the aftermath:

  • The owners had all the leverage since they either claimed to or did lose money as a league.  The players getting the shaft was the logical endpoint of the negotiation.  The only argument against the owners holding out for a better deal was that they would lose too much fan goodwill and popularity.  That has clearly been proven false.
  • Owners/GM's can hurt themselves handing out large contracts as it can hamper financial flexibility to make changes if the players aren't living up to their contract as a whole.
  • While numersous large contacts being handed out can hurt an individual owner's bottom line, it can NOT hurt the leagues profitability and here is why:   The CBA specifies a set percentage of 'basketball related income' of between 49 and 51% for the duration of the deal (it was 57%).  What this means is that owners as a whole can't make less than this % no matter how many bad contracts they hand out.  This is fixed and can't be changed.  The NBA works on an escrow system where in 10% of players paychecks are 'escrowed' into an account and at the end of the league year (July 1st-11th), the league audit determines whether any salary should be returned proportionally to the players.  If league payroll as a whole was too high in a year, owners keep all $ in the escrow account and if it wasn't enough to keep obtain the minimum 49% of BRI for the owners, more is taken out the next year.
  • So, establishing that owners as a whole can't lose profitability because of player payroll in this CBA, here is where these contacts do have an impact:  They affect the split of profits.  Some owners with huge payrolls will still have to meet that with increased revenues, so there is INTERNAL TEAM RISK in bad contracts but NOT league risk.
  • The total amount of player salary also affects the players themselves. Since players are limited to half of the league revenue, any new contracts signed only take away salary from currently contracted players.  So, essentially each new contract takes $ proportionally from players already under contract.
  • This is why there was haggling over a lot of the salary cap mechanisms during the lockout.  Things like the mid-level exception, mini-mid level, rookie wage scale, etc. affect which teams have which options to use.  For example, a more restrictive MLE for tax-paying teams means that the money supply for veteran free agents is lowered, effectively allocating more $ to rookies and free agents who sign with teams who have cap space (and thus don't have the cap exceptions - MLE,BAE).  The punitive luxury tax rules steer money away from role players and towards star players as teams are more restricted in how they round out the end of their rosters.
  • This new CBA was designed to 'protect them from themselves' in a sense.  Every owner wants to compete for championships, but also want to save money.  These dual incentives often clash in pro sports and lead to complex decision making.  By restricting their ability to spend as well as re-establishing how much of the revenue split they recieve, owners can better achieve both outcomes.  Essentially, the parameters by which to construct teams have been tightened, free market forces have been minimized and teams can better achieve their dual incentives (profit-maximize, win) without sacrificing the other.

1 percent

July 2nd, 2012 at 12:17 PM ^

Tiger Woods career on course earnings =112 million
Rashard Lewis career on court earnings =148 million .... I think KD, Kobe, LeBron will be fine.

bronxblue

July 2nd, 2012 at 12:23 PM ^

This has always been the problem with sports teams - the owners tend to be independently wealthy and thus don't "need" the team to be successful for them to maintain their wealth, so they greenlight bad contracts and overpay guys because they follow their GMs and scouts.  And since most GMs and scouts move around teams all the time, they have less incentive to really be thoughtful of who they sign - unless you are Miami, NY, LA, you probably have a hard time attracting good FAs.  So you overpay to get the guy in the door, and then you just hope it works out.  That's why Joe Johnson had the max deal - he was a big enough name that Atlanta could market him, and who else was going to sign with the Hawks?  Same thing with Hibbert - he's an all-star at a position of need who wouldn't have given Portland a second look without a big-time offer.  So yeah, he's not worth $58M or whatever, but if I'm Portland and I want to keep Aldridge around and Paul Allen doesn't mind footing the bill, why not try to blow people out of the water instead of getting into a bidding war with others?

But yeah, these are the types of deals that hurt the league during the last CBA, and they are just repeating those same signs again but with a slightly lower ceiling.

jmblue

July 2nd, 2012 at 1:09 PM ^

I don't really have a problem with that.  I think it's more obnoxious when owners run their franchises (which are quasi-public goods, given their importance to our society) strictly as a business and look to cut corners where they can (e.g., Los Angeles Clippers).  This is a very different kind of investment than a regular company.  You're not trying to drive other franchises out of business, just beat them on the playing field.  (And if you do beat them on the field often enough, you will almost certainly recoup your initial investment when you sell the franchise.)

El Fuego

July 2nd, 2012 at 2:22 PM ^

I must say Hibbert deserves a Max deal.  He was/is incredibly valuable to the Pacers.  His numbers may not jump out at you, but he opens up the floor for other play makers like Granger or Hill.  He gets fronted and someone always sags hard on help defense to keep the ball from him which leaves another player open.  Plus, the Hibbert-West-Granger front court is the biggest/strongest in the league.

On defense, players are afraid to get to the rim because they will get stuffed.  Players like Wade (pre game 4 in the Indiana-Miami series) would settle for jump-shots when that's the weak part of their game just because Hibbert roamed the paint.  If anything, his pressence alone changes the game.  I think he was +50 (or something ridiculous) on the floor against Miami in that series.

Also, he is 25, an All-Star, has an incredible work ethic, and is still developing his game.  He has nothing but upside in a position that lacks depth in the NBA.  Trust me, he is the real deal and he deserves one.

 

TheLastHarbaugh

July 2nd, 2012 at 2:40 PM ^

This is why everyne should have been on the side of the players during the lock out.

When it comes to giving out contracts the owners act like a bunch of starving fat kids who've just been unleashed on Willie Wonka's chocolate factory.

Is it Hibbert's fault that someone was dumb enough to give him that contract?

The owners do shit like this and then wonder why they're not making any money, or are so far over the luxury tax.

snarling wolverine

July 2nd, 2012 at 3:53 PM ^

In these labor disputes, the ultimate goal of any players' union in sports is to achieve a situation like baseball, with no salary cap and market forces determining salaries.   This has led to ridiculous payroll inequalities and situations where certain franchises are almost hopeless.  The NBPA has in the past talked about dumping the salary cap and even the draft. If they were to start "winning" some of these disputes, we'd be headed that way.

The ultimate goal of owners in these disputes is to achieve a situation like the NFL, with its hard cap and massive revenue sharing.  This has led to parity and a sense that any franchise can compete for the title.  I've got to root for that.

I agree that it's not the players' fault if owners offer them dumb contracts, but in the long run, the players' demands aren't healthy for the sport.  

 

 

LSAClassOf2000

July 2nd, 2012 at 6:14 PM ^

It will be interesting to see if deals start changing in the next few years when the luxury tax ceases to be a 1:1 system and goes to an incremental system where you pay a certain amount per dollar for the first several million, then more per dollar in another range, and so on depending on how far above the cap a team goes. I think repeat offenders are penalized further actually. 

It is things like this that constantly make me wonder about the business model of the National Basketball Association. I believe that players coming off rookie-scale contracts can be signed for up to 30% of cap if they meet certain criteria too, at least in the new CBA, and this player can then be made eligible for the so-called "Bird Rule" and get a five-year extension. It seems like the deals that result are the  reason you find teams at nearly twice the actual cap now and again, which I would think makes the revenue situation of some teams untenable in the long term, especially with some of the changes yet to take effect. 

Tacopants

July 2nd, 2012 at 4:53 PM ^

Lebron, Wade, Kobe, etc all make a ton more money off endorsements than random bad max contract guy.  LeBron earns another $10 mil a year from one sponsor: Nike (on top of his 20 mil max contract).  I don't think they're very worried about Hibbert suddenly eating into those sponsorship dollars.

Roy HIbbert is the type of guy who trusts his eyes to Dr. Rahmani, not the guy who leads national ad campaigns.

aratman

July 2nd, 2012 at 5:20 PM ^

I don’t for the life of me understand why people are so concerned about how much entertainers make.  It is like wonder how much Subway paid for there meat, you can argue the price of the sandwich but what is the concern for profit?  If you don't like the ticket prices don't go to the game.   If a people don't go to games they won't have money to pay the players, unless they have the money to pay players and then it is there money.  That is a product issue not an issue of how someone else is paid.