Sussing out the financial implications of the Oct. 31 contract-extension deadline
By Rob Mahoney
While much of the league was engaged in the second night of regular-season NBA action, a handful of teams made final decisions regarding contract extensions for their promising fourth-year prospects. The Oct. 31 extension deadline gave a number of negotiations fresh momentum and a clear sense of urgency; by midnight, a surprising seven extensions had been made official, including three that were finalized by game time or later.
Each of those extensions will have a considerable impact, as will the lack of an agreement for those talented players who expected to receive one but didn’t. Below, we look at a few specific cases, with an eye on how some of the recent extensions (and non-extensions) stand to impact team-building goals.
The Raptors agreed to a four-year, $40 million extension with DeMar DeRozan.
At this point in his career, DeMar DeRozan does precisely one thing at an above-average NBA level: score.
But even the 23-year-old’s profile as a scorer is littered with caveats. DeRozan isn’t able to consistently create off the dribble against defenses aware of the limitations in his game, thereby limiting his value to a high-functioning offense. He doesn’t have any three-point range to speak of, as evidenced by his career-high 26.1 percent shooting from long range last season. His off-the-ball instincts aren’t terribly sophisticated, and his decision to rely on long, inefficient two-pointers have yielded predictably unimpressive results. In a sense, DeRozan is a scorer because he doesn’t do all that much else; he’s had opportunities to pile up attempts on bad Raptors teams and put up solid points-per-game averages as a result.
But aside from youth, athleticism and whatever we can make of DeRozan’s scoring game, what is it that the Raptors are paying for here?
Behind a rapidly improving team defense and some stark upgrades in personnel, the Raptors are one of the most promising young teams in the league. But between DeRozan and the recently signed Landry Fields, Toronto now has roughly $16 million annually committed to an unproven wing core through 2015. Factor in the far more affordable (and honestly, far more promising) Terrence Ross, and it’s hard to see what purpose DeRozan serves. This is a rebuilding team that has voluntarily hamstrung its own construction efforts, and though that’s hardly the fault of DeRozan alone, his deal brings the Raptors that much closer to a cap-out.
Toronto will spend much of this season trying to build an offense capable of keeping up with its rising defense, but there’s little evidence to suggest DeRozan is capable of playing a major role in such a system. He’s a perfectly useful player in moderation, but when featured too heavily — and paid in a way that prevents Toronto from adding more substantial talent — DeRozan gives his team an artificial ceiling. There is, of course, a chance that he improves dramatically; that potential is theoretically in play for every young athlete possessing DeRozan’s gifts. But $10 million or so a season is a tough price to pay based on an unsubstantiated gamble, or worse yet: a fear of missing out on DeRozan’s improbable epiphany.
With the contracts of both DeRozan and Jose Calderon set to expire next summer, the Raptors were positioned to explore a variety of attractive options to secure their roster’s foundation. But this extension — coupled with some $43.5 million in other virtually guaranteed salary next season — makes Toronto a limited player in next summer’s free-agent market. The same will likely be true the following summer, when Toronto will need to re-sign Kyle Lowry and, likely, Ed Davis, too. A team in need of wing competence, additional ball-handling (given Calderon’s likely departure) and more outside shooting will have little room to address those needs conclusively over the next several seasons — all because the Raptors were spooked into overpaying their own player.
The Nuggets agreed to a four-year, $48 million extension with Ty Lawson.
It’s hard to broach this Nuggets team in any definite terms, if only because their roster is still so fantastically weird. But Denver’s unusual depth can be transformed into a real contender, and a particularly fun one at that. It’ll take a bit to get there, though. These Nuggets will need to dramatically improve their defense, but have the athleticism and capability to pull off such a feat. They’ll need to continue along their individual developmental paths, and continue to build their games from within. And they’ll need Ty Lawson — the engine of Denver’s fast break, and the Nuggets’ one truly essential piece — at the helm.
Whether by extension or restricted free agency, Denver GM Masai Ujiri had little choice but to bring back such a crucial shot creator. That makes the fact he was able to re-sign Lawson at a reasonable, long-term price all the more impressive; the Nuggets didn’t bid against themselves or some hypothetical market value, but instead came to an affordable price that will allow this core to work up to its potential.
Danilo Gallinari, Wilson Chandler, Kenneth Faried, Andre Miller and now Lawson are all under contract through 2015 or later, with Andre Iguodala, Corey Brewer and Timofey Mozgov possibly poised to join that bunch at the end of this season. To some, that may seem like an imperfect core. But with unripe talent and ideal personnel to execute George Karl’s offensive philosophy, the Nuggets are wise to invest in concept only to re-evaluate down the line. The pieces involved are pricey, but enough of Denver’s end-of-the-bench players are on their rookie deals, offsetting the four $9 million+ salaries at the top of the cap sheet. Plus, with so many useful players in so many overlaying roles, the Nuggets will be in position to trade a cog or two down the line for the sake of tweaking their roster.
But this continued endeavor only makes sense with Lawson, a savant at creating efficient offense, on board, and on board at a sum the Nuggets can live with. A sum of $48 million over four seasons is well within that acceptable range, and should ultimately make Lawson one of the better value deals in the league by his contract’s end.
The Kings did not agree to an extension with Tyreke Evans, thus making him a restricted free agent next summer.
When betting on potential, it helps to have every bit of information possible. Careful study of workout habits, extensive film review, personality assessments, progressive shot charts, situational data and plenty more all come into play, as team decision-makers attempt to separate what could be from what will.
And thus when it came to the phenomenally talented (and somehow even more confusing) Tyreke Evans, Sacramento president of basketball operations Geoff Petrie decided to wait, explore another full season’s worth of information and make a final decision on the young King next July. It’s not just the right move, it’s the logical move; with DeMarcus Cousins ready to take the leap (in a strictly metaphorical sense) and mid-level deals clogging up Sacramento’s cap picture, Evans could either be the force that pushes the Kings toward legitimacy or the costly enigma that keeps them stranded in the mire. There’s a lot riding on both Evans’ development and the Kings’ eventual decision, and Sacramento has circled back in an attempt to make the best and most informed call possible.
Not to double-down in negativity on the Raptors, but it’s essentially what Toronto should have done with DeRozan. Extensions should be reserved for those who demonstrate something definitive — be it a certain developmental arc, a clear and useful skill set and/or an on-court compatibility. Both DeRozan and Evans have shown shades of each, but leave enough questions unanswered that they deserved to play out the 2012-13 season without a long-term financial commitment.
That doesn’t mean each isn’t important to their respective franchise’s workings in their own way. It simply means that they didn’t quite meet their burden of proof, albeit for very different reasons.
Evans has capitalized on more of his potential than DeRozan has, but undercut his value with on-court ambiguity. The Kings don’t quite know what to make of Evans in terms of his optimal position or role, and due to previous salary commitments, they’re discouraged from prematurely piling an Evans extension on top of it all with so little to lose in free agency next summer.
The Kings have made plenty of mistakes. John Salmons’ indefensible five-year, $39 million contract from back in 2010 continues to do Sacramento harm. Mid-sized deals for Chuck Hayes, Jason Thompson and Francisco Garcia have given the Kings some useful rotation players, but perhaps not enough flexibility. A sizable commitment to Marcus Thornton helped Sacramento keep a productive piece, but also makes it difficult to work under the cap. Yet even with a track record of errors in judgment, the Kings got this one right, or at least as right as they could for the moment. Evans could become the kind of player Sacramento needs him to be, but why bank so heavily on that possibility when the option to keep him isn’t going anywhere?