It's a good time to be an NBA free agent. The salary cap is expected to rise by $24 million per teamfor next season, and then rise by a similar amount in 2017-18. That means an additional $720 million available to pay players this season, more than half of which is in the form of cap room.
It's also a great time to own an NBA team. Player salaries are capped at about half of basketball-related income. In plain terms, if the players are getting an additional $720 million in salary, there's an additional $1.44 billion in revenues. Folks who work in the NBA are going to be making a lot more money over the next few years.
There's a point to this for fans: players are going to sign super-ginormous contracts that surpass anything we've seen before in the NBA. Don't get sticker shock by dollar values. The salaries are supported by league revenues. In a capped environment, especially one with maximum salaries for individual players, the actual dollars are irrelevant. Think in terms of percentage of cap, and things can get a bit more reasonable.
Only a bit, though. Players signed under the old cap will almost all become instant bargains. Think about Boston's Jae Crowder, who is young, productive, and signed for just $29 million over the next four years. There's a strong chance that Washington's Bradley Beal, who has been decidedly average even when healthy, will sign a contract that would pay him roughly $98 million over the same four years. Timing is a crucial factor in how much players can earn in their careers.
Regardless of the amount of money available, there are always free agent busts and bargains, as well as players who provide fair value for their contract.
Before delving into the individuals, a few words on the methodology. The ratings are based on the Player Production Average (PPA) metric I developed. PPA accounts for how individuals contribute to their teams winning and losing, and does so by applying weight to various statistical categories, each in proportion to how that category contributes to wins and losses. It's similar to John Hollinger's Player Efficiency Rating (PER) or David Berri's Wins Produced.
PPA includes features of each—it's pace neutral (like PER), and accounts for defense (like Wins Produced, albeit differently). Where PPA differs significantly is in its handling of offensive efficiency. In my analysis, PER sets the bar too low—shooting more can increase a player's rating with a conversion rate as low as 28 percent—while Wins Produced sets the bar too high in its assessment that a player adds nothing with his shooting from the floor unless he shoots better than 50 percent. PPA hits the Baby Bear "just right" spot with a "break even" level that floats a bit year to year depending on league efficiency in that season.
Free agent value is assessed using a blend of total and per 100 possessions production for each player. Future production is estimated based on analysis of the career trajectories of similar players in NBA history. Those similars are selected by a model that looks at an array of statistical categories including age, playing time, possession usage, and the standard box score stats. Each player's anticipated share of an average team's production becomes his Estimated Cap Value for next season.
Worth the Money
1. Kevin Durant — The offseason's top prize is established as an all-time offensive weapon, and he's secretly an excellent defender. I estimated his value at more than 30 percent of the cap, despite missing ten games with injury. He's likely to re-sign with the Oklahoma City Thunder, but whichever team gets him becomes an instant contender to reach the Finals. Estimated Cap Value 2016-17: $31.3 million.
2. Hassan Whiteside — Whiteside is a maximum salary lock, and he deserves it. Somewhat underutilized by the Miami Heat, he was still worth more than 23 percent of the cap last year. His production is likely to push his value past the 25 percent mark for the next several seasons. Estimated Cap Value 2016-17: $26.4 million.
3. Al Horford — It's generally good to be leery of offering huge money to players over 30 years old. Horford's game should age well, however. Good shooting typically doesn't depart (it often improves with age), and he's a savvy defender and rebounder. My projections suggest he has another two to three maximum-salary-level years left, though buyer beware on the fourth. Estimated Cap Value 2016-17: $23.5 million.
4. Andre Drummond — He still has some holes in his game (hello, free-throw shooting), but he doesn't turn 23 for another month and he's been insanely productive for the Detroit Pistons throughout his career. Detroit will surely lock up the restricted free agent. Estimated Cap Value 2016-17: $22.2 million
1. Pau Gasol — He'll be 36 next season, and he'll sign a short-term contract, which makes him perfect for title-hunting teams that need help up front like the Golden State Warriors and the San Antonio Spurs. Last season, I estimated his production was worth nearly 21 percent of the salary cap. That would translate to nearly $19.9 million against the new $94 million cap. He's likely to sign a one-year deal in the $12-15 million range, and boost the championship fortunes for whichever team lands him. Estimated Cap Value: $22.1 million
2. Jared Dudley — Nobody will confuse Dudley with the game's elite performers, but Dudley is a solid player who could have significant value as an off-the-bench super-sub who splits time between power and small forward. He's a deadly three-point shooter who spaces the floor and avoids mistakes. Last season, playing mostly at PF, he was worth almost ten percent of the cap. That translates to about $10 million this season, but he's going to be available for the $5.6 million mid-level exception or less. Estimated Cap Value: $11.3 million
3. Jon Leuer — There's zero buzz about him, but he seems like a classic Spurs "get a good player on the cheap" pick-up. He rebounds well and shoots threes competently, and could be a relatively inexpensive signing for a team in the market for a stretch four. Last year he was worth about seven percent of the cap, or about $9.7 million in 2016-17 money. Estimated Cap Value: $12.2 million
4. Mirza Teletovic — The hot stretch four this summer is Ryan Anderson. The New Orleans forward will have multiple teams in pursuit, and could land a deal that starts in excess of $20 million (about 21 percent of the cap). Teletovic was just as good last season, and he actually shot threes more frequently and better than Anderson did. Teletovic will likely be available for about half Anderson's price tag. Estimated Cap Value: $11.4 million
Future Cap Albatrosses
1. Bradley Beal — A mortal lock to receive a maximum salary contract from the Wizards, Beal's four seasons in Washington have been marked by frequent leg injuries and decidedly average play when healthy. Fans point to his age (he just turned 23), three-point shooting, and performance in the playoffs to suggest he's worth the money, but the history of players like him (more Dennis Scott, Mike Miller, or Quentin Richardson than Ray Allen) suggests his peak won't be high or long. Free agents who are likely to produce as much or more, but at a lower price: the Orlando Magic's Evan Fournier or the Los Angeles Lakers' Jordan Clarkson. Estimated Cap Value: $11.5 million
2. Harrison Barnes — Reportedly, multiple teams are preparing maximum offers for the swingman. He's still young, and he had a good season in 2014-15, but last year was a significant regression. As a low-usage role player, he's fine. At a maximum salary, his team will need more and there's little in Barnes's background to think he can provide it. Estimated Cap Value: $12.7 million
3. Dwight Howard — Howard's demise has been overstated, but he's past 30 and he has had troubled relationships with teammates and coaches at every stop in his career. His game is predicated on superior athleticism, and his post-back injury drop-off was significant. Odds are, he's not going to age well. He's eligible for the highest maximum salary, which could start his contract as high as $31 million. I don't think he'll get that much, but he'll command something in the neighborhood of four years and $100 million. The first two years should be good, but there's a good chance his next team will be paying $55 million over his last two seasons for a significant decline. Estimated Cap Value: $17.9 million
4. Joakim Noah — Reports indicate that multiple teams are planning maximum salary offers to Noah, which seems insane. Past 30, Noah's production declined each of the past two seasons before he got hurt last year. His new team will be purchasing the expensive decline portion of Noah's career. Estimated Cap Value: $10.5 million
5. Dwyane Wade — Wade has had a great career, and he showed last season that he still has some game some nights. But he also showed last season that he can't bring it every night—unsurprising for a guard in his mid-thirties. The Heat would be wise to continue offering Wade one-year contracts. Multiple years would be as foolish as when the Lakers awarded Kobe Bryant a two-year extension. Estimated Cap Value: $13.8 million
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