NBA free agency: Christmas in July


In a free market, prices for commodities eventually come to a perfect equilibrium that maximizes the benefit to both customers and suppliers. But the NBA is far from a free market. Free markets don’t have salary caps. Free markets don’t have moratoriums. Free markets don’t have maximum salaries, rookie scales, and luxury taxes. And most importantly, free markets do have what is known as perfect information. This means that both sides, customer and supplier, know everything about the product being sold and the benefits it will confer. The concept of perfect information in the NBA is laughable.

When it comes to free agency negotiations, agents are the suppliers, GM’s are the customers, and players are the commodities. As we covered yesterday, each player/commodity has a specific market price depending on their skills, stats, abilities, and experience. An agent’s job is to get their client a contract which will pay higher than the market price in annual salary. A GM’s job is to get the best value for their contract dollar. GM’s are not in the business of low-balling necessarily; they’re just trying to maximize the skill, ability, and experience of every commodity on their roster. Agents try to sell their clients based on their best possible performance. GM’s evaluate commodities based on their expected performance. The information is less than perfect because neither side actually knows how the player will perform once the contract is signed. Every free agent contract is a gamble. Sometimes that gamble pays off for both team and player. Sometimes it just pays off for the player. Either way, for several current NBA free agents, Christmas will come early this year because they’re in for a significant raise. Here are some of the players in the market who are about to get paid.

Nikola Pekovic

2012-13 Salary: $4,460,000

Predicted FA Annual Salary: $9,500,000

There’s no way around it, Nikola Pekovic is a beast. He’s a great scorer in the post and a very good rebounder. He led the NBA in points in the paint this season. His agent will no doubt try to market him as a 27-year old seven-footer with 20-10 potential. And that pitch very well might get Pek overpaid. If teams legitimately view him as a 20-10 guy, he could get a Hibbert-esque contract this summer. But Pekovic is not Roy Hibbert. He blocks less than one shot per game and hasn’t yet averaged 10 rebounds per game. His rebound rate, 15.9, is by no means elite (45th in the NBA.) But paint scoring and toughness are rare qualities in the NBA, and because he possesses them, Pek could get more money per year that what the Skills Market model has predicted. But it’s not likely he’ll ever be a 20-10 player, and any team who pays him like one is definitely overpaying.

J.R. Smith

2012-2013 Salary: $2,806,452

Predicted FA Annual Salary: $11,000,000

Smith’s predicted value is based on his production in the 2012-13 regular season only. That was far and away J.R.’s most productive period in the NBA. There is more than a small chance he will regress next season. Regression certainly reared its ugly head in the playoffs when Smith was almost useless for the Knicks. The Skills Market model is based on production, not efficiency. So Smith’s eight-figure value is owed to the fact that he scored 18 points a night, not the fact that he shot only 42% from the field. As a scorer, Smith has incredible potential. He gets to the line nearly four times per game. He is the NBA’s seventh best isolation scorer in terms of points per game. Everyone higher than him on that list makes at least $13 million per year. I think J.R. will likely get a short-term deal for $10 million per year or a longer-term deal for somewhere in the neighborhood of $8 million. While there is certainly not perfect information regarding Smith’s production next season, both sides of the negotiating table know there’s definitely risk and volatility involved, and thus Smith will probably get less than his market value.

The Suns are reportedly contemplating showing Smith the dough, according to the New York Post.

Nate Robinson

2012-13 Salary: $854,389

Predicted FA Annual Salary: $5,400,000

Nate Robinson played this season on a veteran’s minimum contract. Filling in for Derrick Rose, he became one of the most exciting players of the postseason and really showed what he could do with playing time and a coach’s confidence. Robinson would be a great backup point guard/off-the-bench scorer for team looking to invigorate its second unit. I see him getting a near-full mid-level exception from a team under the luxury tax line.

Carl Landry

2012-13 Salary: $4,000,000

Predicted FA Annual Salary: $7,500,000

Landry has always been a productive player. He’s bounced around more in his first six years than almost any player in NBA history.  Landry’s combination of offensive efficiency, post up scoring, offensive rebounding, and getting to the line almost ensures he’ll get every bit of his predicted value in the free agent market. Carl is a player who brings a lot to the table and takes very little off of it. He’s nearly a risk-free proposition.

Jarrett Jack

2012-13 Salary: $5,400,000

Predicted FA Annual Salary: $7,500,000

David West

2012-13 Salary: $10,000,000

Predicted FA Annual Salary: $12,000,000

Both Jack and West were players proved themselves worthy of a payday in both the regular season and playoffs. Two years ago, West, who was recovering from injury, took a short-term deal with Indiana to prove he was back and fully capable. He did that and then some this season. I could see him taking extra years for less money annually to secure his long-term future in Indiana, though he could still easily get his predicted value in the open market.

Jack has bounced around so much that it’s easy to forget he’s only 29. He proved he has the ability to start or be a great back up point guard for a team. He has a diverse array of skills that will more than warrant a raise of a couple million bucks.

Brandon Jennings

2012-13 Salary: $3,179,493

Predicted FA Annual Salary: $8,000,000

Jennings has hinted that he’ll extend his contract with the Bucks. What type of annual salary he’ll get is still up in the air however. Jennings has averaged 17 points and nearly six assists per game in Milwaukee. He gets into passing lanes, knocks down threes, and maintains a 2-to-1 Assist to TO ratio. Jennings’ is certainly worth his predicted value, but I suspect he’ll get more from Milwaukee. The Bucks made two things very clear this offseason. First, they planned to keep either Jennings or Monta Ellis, but not both. Second, they tried to extend Monta first, indicating that he was their primary choice. Now that Ellis has opted out, Jennings has all kinds of leverage over Milwaukee. I wouldn’t be surprised if he got something close to Rajon Rondo’s deal in Boston.

Paul Millsap

2012-13 Salary: $8,603,863

Predicted FA Annual Salary: $10,000,000

Millsap had a terrible contract year. His scoring, rebounding, and efficiency all fell off. Had he maintained his production from the previous two seasons, he would be looking at David West-level money this offseason. As it stands now though, Millsap probably won’t garner much more than $10 million especially with cheaper options like J.J. Hickson and Carl Landry on the market. The only way he’s getting more is if his agent convinces some team that a change of scenery will magically change Millsap into a double-double machine. That’s not a terrible sales pitch considering how crowded Utah’s front court has been along with the terribleness of the Jazz’s guard play.

Check back with us tomorrow as we review the free agents who are in for a financial reality check when the moratorium ends next week.

Tags: Free Agency

  • Daniel

    What about Monta Ellis’ projected salary.

  • Foreveris2long

    Ryan good stuff. What do you think the going rate will be for Wes Johnson? I hope the Suns stay the course with inexpensive help and let the young players take their lumps while they grow. While some veteran leadership is appreciated it should not be overpriced. The worst thing that can happen with this formula is the Suns will look good in the 2014 sweepstakes. OKC played that game perfectly while Westbrook learned to play point guard.

  • Scott
  • frenchysunsfan

    I hope Tyreke Evans will sign with the Pelicans so that they trade Eric Gordon to the Suns. A package including Brown, Beasley or Tucker and Scola would be good for them.
    Then we sign Millsap and we would have quite a good team for next season.

    The roster would be:

    PG: Dragic, Marshall
    SG: Gordon, Goodwin
    SF: Dudley, Marcus Morris, Tucker
    PF: Millsap, Markieff Morris, Frye
    C: Gortat, Len

    I think either Oriakhy and Garrett will not be signed.

  • http://jeffgubernick@cox.net south philly

    Be real; the suns will not go after any free agents or spend any money. Next year will be an exact duplication of this past year and the line up will also be the same.This is a 3 year develop through the draft project and possibly next year add a free agent if the money is right. Do not plan on the suns making the playoffs for 3 to 4 years.

  • Suns4Life

    Suns shouldnt pay any FA this year alot of money, maybe go for Oden on a one year deal but thats it. Next years FA pool is 20 times better then this years. Save the money and be ready for next year

  • Scott

    @frenchy -

    I don’t think Garrett is even on the list to be signed. But you are forgetting Malcolm Lee, whom the Suns acquired in moving up to #29 in the draft. He’s got a guaranteed contract.

    If the Suns are going to sign anyone else, either Lee and/or Oriakhi need to be dropped.

  • Scott

    I listed some of the Suns’ expiring contracts before, but I didn’t get them all. There’s nine players in their final year. Here’s a full list:

    Gortat – $7.7m
    Beasley – $6m
    Brown – $3.5m
    Markieff – $2m
    Marcus – $2m
    Marshall – $2m
    Tucker – $1m
    Lee – $1m
    Oriakhi – ? (not signed yet, but surely < $1m)

    Source: http://valleyofthesuns.com/salaries/

    As for next year's free agency … I don't see anyone there the Suns are likely to pick up. Larry Sanders? Greg Monroe? John Wall? Paul George? Eh, I don't think so.

    If the Suns progress at all, so far as I can see it will be through the draft, development, and trade.

  • Suns Fan In Portland

    Yes Oden. With the Suns training staff, I’m surprised I haven’t heard more talk of going after him. His injuries were so badly mismanaged by the Blazers that I think his injury ‘proneness’ is probably overstated. I’ve seen him play in person, and he has some really incredible skill. It would be fairly low risk, and if the doctors could pull another one out, the reward would be huge…

  • Azbballfan

    This roster would need expensive, major upgrades of the veteran talent variety to make a dent in the west

    Paying for high prices veterans like West, Milsap or JR Smith would be a terrible idea

    it would just take this team from the sweet spot top 5 lottery selection town to dumpville, the NBA purgatory occupied currently by teams like the Blazers, who are good enough win and not be terrible, but not nearly good enough to win anything meaningful and have players signed to big deals that they will eventually trade away

    We need to build through young talent, only sign young value low cost free agens and duplicate last years 25-57 record

    Yeah its not going to be any fun, but the 2014 draft is going to be fantastic, i would much rather bet on the Suns getting a good pick in that draft, rather than winning 35 games with overpriced talent

    Free Agncy is what you spend your money on when your not quite good enough to get over the hump and make a deep playoff run

    anything other than that is a waste of money

    I doubt the Suns FO is short sighted enough that they think adding JR Smith or Milsap at the cost of 20 million a year will take this team from top 5 lotto to WCF

    Building thru the draft and using our free agent money in a timely manner, i.e. when you really want to win and your close enough, is the way its gotta be done

    unless you want to be mediocre for a few more years after which you eventually blow it up and start all over again

    if you cant get CP3, Howard, Lebron, or any of the uber elite guys to come to you, and your willing to be patient with draft choices, thats what you gotta do

    unless the guys your signing are uber elite it really doesnt matter

    free agents are overpayed and we need to be very careful about who we spend money on

  • DBreezy

    The Suns do not have to be below 15 until preseason ends and it may be that long depending on how things shake out. Origakhi doesn’t have a guaranteed deal as a 2nd rounder. Unless he truly wows in SL, I expect him to come into camp with either no deal or one that has a couple of partial guarantees. NBA players actually don’t get paid until the middle of Nov, so there would probably be protection against paying anything if they cut him by the end of preseason and partial guarantees from there.

  • Azbballfan

    by the way when i said adding JR Smith or Milsap at 20 million a year i was saying that they would command about 10 million each, not 20 million for one or the other that would be rediculous

  • DBreezy

    I see there is a Gortat to the Spurs rumor floating around.

  • DBreezy

    I also see that @Foreveis’ boy R.Lo could be on the block to make room for Tyreke Evans. Lost love required?

  • Scott

    Heh, bringing Robin back would be par for the course. Now that he’s – erm – been on another team and greatly improved. ;)

  • Ty-Sun

    All things considered, the Suns already have a lot of young players that may still have potential. As much as I liked Gentry, developing young players was never his strong suit. Perhaps Horny can get more out of the Morris twins, Marshall and maybe even Beasley. If not, the Suns have another bad season and another good lottery pick in next year’s draft.

    Yes, I would love for them to be able to bring in some more young players with potential or more draft picks next year but it’s unlikely that they can get either of those in deals for the young players they already have on the roster. For example, no way will the Suns get a 1st round pick for Marshall but – if Gortat plays like he really wants a big payday after this season – then perhaps the Suns could bundle Gortat and Marshall in a trade for a 1st and other players before the trade deadline.

    But that’s if Marshall does NOT improve this season. Hopefully Horny and his new coaching staff will prove better at developing young players. Even if not, it’s unlikely the Suns could get anything for their young under-performing players than young under-performing players from other teams.

  • Foreveris2long

    DBreezy I heard that the Pelicans offered I think $10m/yr to Evans but I did not hear about the them ridding themselves of the Lopez contract. At $5m/yr I suspect they will find some takers. Then again since the Pelicans have the option on Lopez they can simply not renew the option allowing him to be an unrestricted free agent. Lopez was given a 3 year contract with the Pelicans having the right to renew after each season.

  • Foreveris2long

    DBreezy just read the Lopez contract is guaranteed for the 2013-2014 season unless he is waived by July 5, 2013. Considering they are attempting to stay under the cap with Evans, I suspect they would like a draft pick in return from a team who could absorb the Lopez contract. Otherwise it appears they lose him and get nothing in return after July 5.

  • Foreveris2long

    Actually Pelicans get nothing if they waive him BEFORE July 5 so I definitely appreciate their slight crisis.

  • Ty-Sun

    Interesting. I heard a few days ago that SA might be interested in Gortat but it was a vague rumor. Now I’m reading that they are proposing a trade for Splitter and a 1st round pick in 2014 or Diaw + “player/players to be named” and a 1st round pick in 2014. Splitter is an unrestricted FA this year so that would involve a sign and trade deal which I don’t think would be good for the Suns because Splitter would probably want a multi-year contract and I just don’t think he’s good enough for the Suns to do that.

    Diaw however has only one year left on his contract so that deal would depend on who else the Spurs were willing to throw into the deal before I would take the offer seriously.

  • DBreezy

    @Foreveris,

    Interesting details on the contract, didn’t know that as I had only read the rumor from WoJo.

    @Ty-Sun,

    While I’m all for Horny getting more out of the Suns ‘old’ youth as it would accelerate things, I’m skeptical. With Marshall, Goodwin, Tucker, and the Morris twins this might be the worst shooting summer league team in history!

    I’m interested to see what kind of attitude Kendall and the twins come in with. The twins have to be at serious risk of not having their 4th year options picked up if they don’t have a good offseason and while extremely rare Kendall could find himself in the same situation with his 3rd year option.

  • Doug

    No one the Suns can get via Free agency or trade in the foreseeable future can turn this franchise around. The only player that the Suns can fathomably get that can make the Suns a contender is…Andrew Wiggins, which means our best bet is to suck bad next year, as we most likely will regardless of who we sign.

  • Ty-Sun

    @DBreezy – I’m very skeptical of whether anyone can get more out of the Suns’ “old” youth but they may not have any other choice this season. If Horny can turn then around, great. If he can’t, then everyone hoping the Suns tank this season for a high draft pick next year will get their wish.

    Yes Marshall and the Morris twins are all in jeopardy of not having their options picked up next year. Hopefully they will all use that as motivation this season. If they don’t, I’m fine with letting them all go next year and hope that they all can find work playing in Europe or China next season.

    If not, Burger King might take at least one of them on to man the drive through window.

  • bk

    Doing nothing of as now is the right thing.

    The roster of 14 players is about $54M now. The cap space is $58M…. meaning that the team can sign someone $4M in the market. The team has to spend a minimum $49M. Leaving a little bit of cap space will be good for some mid season trade to get some picks for tax relief of other over-tax team.

    http://hoopshype.com/salaries/phoenix.htm
    http://www.cbafaq.com/salarycap.htm#Q15

    1. Gortat 7.7M
    2. Dragic 7.5M
    3. Frye 6.4M
    4. Beasley 6M
    5. Scola 4.5M
    6. Dudley 4.25M
    7. Brown 3.5M
    8. Morris 2.2M
    9. Morris 2.1M
    10. Marshall 2M
    11. Tucker 0.88M
    12. Lee 0.85M
    waived Haddadi 0.2M
    13. Pick Len ~5M
    14. Pick Goodwin ~1M

    Total: ~$54M

  • SomewhereInAmerica

    Realistically, if the Suns have PG of the future (Goodwin or Marshall), SG of the future (Dragic), Center of the future (Len) and a SG or SF of the future coming in next year’s first round, wouldn’t it make sense to pursue some options at PF that might pan out and improve?

    And I don’t mean Beasley. Perhaps Hickson or DeJuan Blair? Or Larry Sanders next year? Thoughts?

  • BigAZ

    the only FA worth trying is Oden and maybe oj mayo

  • Scott

    It’s a curious situation when – according to rumor – Portland doesn’t want Gortat and would prefer Splittter, while San Antonio would prefer Gortat, seeing him as “tougher” and an upgrade over Splitter.

    Maybe the Suns need to trade Gortat for Splitter and a 2014 first rounder, then trade Splitter and Lee to Portland for something like T-Rob, Withey, and a 2016 2nd round pick. ;)

  • Foreveris2long

    Scott, Splitter is a restricted free agent meaning he can call the shots where he goes forcing the Spurs to match any deal he gets.

  • frenchysunsfan

    Developping young players is a good thing for sure but what a lack of ambition. You need to add great players to play alongside with the young to make them improve. The Suns are going to develop players for 3 or 4 years who will win 20 games per season and they will contracts for other teams as soon as they can. If this is the way McD and Horny are going to work, we are going to miss Blanks and Hunter very soon …