I wanted to take some time and set the table on the NBA free agent market coming up. In short: t'will be insane.
1). WWDD - What Will Dwight Do? - Nearly any team that gives Dwight his max him will cap themselves out, but in this market, if you have a need at center getting Dwight Howard on a two- or three-year deal is better than settling for Festus Ezeli on a longer deal.
Go figure what that Dwight guy wants. You could probably teach behavioral economics classes on exactly how irrational his decisions have been. Years ago, he opted into a player option in Orlando which extended Dwightmare for 12 months. He then left LA for Houston, leaving an extra year, bigger raises, and about $25mm on the table.
And that last decision might have actually paid off. At 30 years old, he has opted out right when the salary cap spikes so precipitously that about 40% of the league can offer him his max without making major sacrifices. This is a major lesson in how uncertain the future is. When Dwight inked his deal in Houston, the league was crying poor and nobody had even heard of the new TV deal.
But will any team max him? Will Dwight prioritize money, being "the man", or winning? It's anybody's guess. The one thing that seems clear is that he isn't returning to Houston.
I think the most likely suitors are Dallas, Chicago, and New York. One team I would advocate going after him is Brooklyn. They have so much space (and will probably trade Brook Lopez eventually) that signing Dwight at even 3 years $90mm wouldn't preclude them from getting another guy or two, and it also ensures that whoever does get him has to outbid that offer, which will be a recurring theme of this piece.
2). Will anybody take bad teams' money? Orlando, Brooklyn, Philly, and the Lakers are at the top of the list in terms of cap space. They combine to have somewhere well north of $200,000,000 available. Yes. You read that right. These four teams have space approaching a quarter of a billion dollars.
Billion. With a B.
But will anybody take their money? You assume the Lakers can attract players, and that they will likely spend some of their space while still assuring they have enough space to attract two max free agents in the summer of 2017.
Orlando has the opposite problem. With young players at every position, any new player they bring in steals minutes from a younger incumbent. Will Orlando be able to attract the top-tier style of free agent who is good enough to supplant one of their young guys, or will they strike out and be forced to overspend on role players? The last time Orlando had significant cap space, they were forced to overpay (with less competition) for Channing Frye and Ben Gordon. The situation is rosier now, but their record proves them to be far from a "destination" for great free agents.
This is why acquiring Serge Ibaka was so great for them. It saved them from paying three bench guys starter money. More on Serge in a moment.
Meanwhile, Brooklyn and Philadephia are both bad. Philly desperately needs everything except bigs in a market flush with bigs and not much else. Brooklyn has three NBA players on their roster and needs everything. How much will they be forced to overpay to attract even a rotation player?
Let's say Jeremy Lin has a three-year deal on the table from Brooklyn for $45,000,000, but he actually wants to go elsewhere. Other teams would be wise to call his bluff instead of matching, and bid against desirable locations instead of the team with the most money. When everyone has space, players can prioritize other things, like winning, and when dealing with rotation-level or borderline starters, the worst thing a team can do is match dollars with a non-competitive team for a certain player. Find the guy who prefers winning to being a starter and save a bit of money.
In this way, other teams' ability to control themselves and not match over-overpays from bad teams will dictate what portion of that $200,000,000 in cap space will not be spent.
3). How many free agents move? I have a feeling that Dwight Howard might be the best free agent to actually change teams, depending on how you feel about guys like Kent Bazemore and that ilk. It simply makes too much sense for Horford, Conley, and Batum to stay put if their respective teams put that 5th year max on the table.
And if they do, then all of those teams can keep those players' lower cap holds on the books and there will be even MOAR space out there. For reference, the difference in Conley's max salary and his cap hold gives Memphis an additional $11mm in space.
And what does this do to the restricted FA market? Restricted guys almost never move, but if Brooklyn can't get Horford or Dwight (spoiler: they probably can't), do they have a better way to spend their cap space than simply throwing massive offers at every RFA?
FWIW, I think the second best free agent to move this offseason will be Kent Bazemore.
4). How many teams will screw with each other? This is my unequivocal favorite thing about free agency. I love what Portland did with Enes Kanter last year, and what Dallas did with Chandler Parsons the year before. Teams have to do business with each other, but they're also in open competition, and frankly, I wish we saw more of the latter. If I was a team like Philly or Brooklyn, I'm targeting one unrestricted guy that I like, then I'm using the rest of my cap space to throw crazy money at every single RFA.
Evan Fournier? You get the max.
Mo Harkless, Allen Crabbe, and Ezeli? You get $4 years, 60mm each.
Jordan Clarkson? You get your four-year Arenas max. Tyler Johnson, Langston Galloway? You get something less, but for four years.
All the way down the line, currying favor with agents and tying up other teams' cap space in 3 years when I'll actually be good enough to start signing guys.
One other small thing: Chandler Parsons has real incentive to take a 2+1 or even 1+1 deal. Parsons has five years of experience right now and is only eligible for a 25% max contract, but in two years he will have seven years of service and will be eligible for the higher 30% max.
With Parsons' checkered medical history, gambling on yourself to get a max at age 28 or 29 might be too risky. However, there is value to a team simply telling Parsons to pick his contract and stripping the value out of his deal for Dallas, particularly if this other team were perhaps in the Western Conference, perhaps even in the Southwest Division, and perhaps EVEN if this team were an aging team with a need for a playmaking wing who can slide down to the power forward, a team competing directly with Dallas for a playoff spot next year and beyond.
I honestly don't know if I were Dallas if I would prefer Parsons on a 1+1, or a 3+1. I might choose 1+1, opting to limit my risk, confident despite recent evidence to the contrary that I can attract more free agents if Parsons decides to walk. Then again, simply locking up a wing who can handle, shoot, and pass for the rest of his prime at what will eventually be less than 25% of the salary cap is pretty attractive.
5). Who can avoid making a massive mistake? LOL. Not everybody. Very few teams will get value, and frankly, if a team waits to get a value contract they'll end up not signing anyone.
Likely, the only value contracts will carry a significant amount of risk. Honestly, Lance Stephenson could be a value contract, and he could be stretched in two years if it goes the other way. Terrance Jones, Mo Harkless, Derrick Williams, E'Twaun Moore, Meyers Leonard - young guys who don't have it quite figured out yet could hit, but probably wont.
The key for teams will be to discern who will make a difference for them, to be unafraid to overpay them, and to then get out. In a vacuum disregarding the skillset a team needs, is there a massive difference between giving 24 mpg to Eric Gordon or Arron Afflalo? Because there will probably be a significant financial difference. Same question to Ryan Anderson and Mirza Teletovic? Same question Rajon Rondo and Brandon Jennings?
The other key is which team can stay disciplined and only give out one- or two-year deals instead of 3- or 4-year deals? Can you get a team option instead of a player option? Instead of agreeing to 3-year, $40mm deal, can you defer $4-5mm of that guaranteed money into a partially guaranteed 4th year, which you can then use the stretch provision to spread out over an additional three more years? Little tricks like this should tip the scales between two players who are relatively equal.
One final key: is any team willing to sacrifice more of their space now to get a guy on a descending deal? For instance, Ryan Anderson probably wants years and security. A 4-year, $68mm deal starts at just under $16mm and ends up at over $18mm when Anderson is well past 30.
But imagine if you flipped it, and started him at $18mm this year? How much more of an asset would Anderson be at the start of the 2017 season on a 3-year, $52mm deal with the cap set to balloon again to $109mm? That contract might actually be an asset instead of an overpay.
6). This seems like a good time to talk about the early odds for worst contract:
5). Rajon Rondo - if he gets any more dollars or more years than 2 yr, $22mm
4). Hassan Whiteside - if he gets his max fully guaranteed.
3). Matthew Dellavedova - if he gets more years or dollars than 3 years, 25mm (which he almost definitely will)
2). Ryan Anderson - if he gets any more than 3 years, $51mm
7). How many teams will give money to their own guys? - Some teams will miss out on starters and face a decision. Splurge on a bench guy, or not spend at all. But wait! There is a third way.
A little-used provision in the CBA allows teams to extend vets after the 3rd anniversary of four- or five-year deals, but you have to use cap space to do so. There are very few of these players in the league, but three have already been traded and all are good bets to be renegotiated and extended: Jeff Teague, George Hill, and Serge Ibaka.
This is why the Magic did so well acquiring Ibaka. They can use cap space to bump Ibaka's salary next year up to his max - $25mm - and then they can tack on years to that deal, turning what looks like a one-year rental into a centerpiece of their team for years to come.
Maybe Ibaka will not want to do that, opting to bet on himself. His max will be $5mm higher next year. What I would suggest to Ibaka is to take the max next year - more than doubling his salary from $12,250,000 to north of $25mm. Then I would extend for one year guaranteed, and a player option on year 3. This puts him back on the market at age 28, at a time when he should still be able to command a max salary well into his 30s. Look for teams like Utah (Derrick Favors & George Hill), Atlanta (Kyle Korver), and New Orleans (Jrue Holiday) to consider locking up their own players if they strike out on their free agent targets.
Of course, that would entail the Pelicans actually thinking about the future.
I'll have more about the Grizzlies specific free agency, but everything said here "bears" impact on their situation.