How to Avoid the NBA’s Purgatory
In recent years, the principle that the NBA’s “middle” is the worst place to be has increasingly become gospel in league circles. The thinking is that rather than residing in the bottom half of the playoff bracket or the top half of the lottery, it is better to simply bottom out and get higher draft picks. However, the ascension of the Indiana Pacers and Houston Rockets from the dreaded middle to contender status in the past year may require a reevaluation of this supposed truism.
For the Pacers, one of the keys was their superior draft record. The Pacers drafted starters Danny Granger, Paul George, Roy Hibbert and Lance Stephenson despite never picking higher than 10th in the draft. The Rockets found a few second-round gems, like Chase Budinger and Chandler Parsons, but also made a series of smart trades that eventually netted them the draft picks and young talent that enabled them to get James Harden by trade from the Oklahoma City Thunder. Harden and the rest of the team’s young talent gave the team a bright future that eventually begat the signing of Dwight Howard.
Try as they might, not every team can emulate the draft success of the Pacers or Morey’s trading acumen. But, there is another simple lesson to be learned from the success of the Pacers and the Rockets: It is okay to be mediocre, as long as it does not entail locking up a mediocre core. Both teams were competitive while maintaining flexibility. After the Pacers’ 38-44 season in 2010-11, they avoided the mistake of re-signing free agent rotation players like Mike Dunleavy and Josh McRoberts. Taking advantage of the fact that Granger was the only long-term non-rookie contract on the roster, they were able to use cap room to sign power forward David West from the erstwhile New Orleans Hornets. Even that was only a two-year deal, minimizing the risk had West failed to recover from his ACL injury. The Pacers could have had ample cap room again this summer had they decided against re-signing West.
The Rockets maintained even more flexibility. After the 2012 season, the Rockets were faced with the impending free agency of Goran Dragic. Dragic had put up some superficially impressive statistics as the starter late in the 2012 season, but the Rockets realized his relatively low ceiling and let him walk rather than match his four-year, $34 million offer from the Phoenix Suns. They similarly refused to re-sign Courtney Lee at his going rate, a four-year, $21.5 million pact from the Boston Celtics, then used the amnesty provision on the $8.5 million annual salary of Luis Scola to create more cap room. With this room, the Rockets signed Omer Asik and Jeremy Lin to three-year, $25 million offer sheets that were not matched by the Chicago Bulls and New York Knicks, respectively. The Rockets also traded away point guard Kyle Lowry to the Toronto Raptors for a sandwich style protected pick that was guaranteed to fall between picks No. 3 and No. 14 in the draft. Eventually, the Rockets were able to trade shooting guard Kevin Martin along with the recently drafted Jeremy Lamb and that sandwich protected pick to the Thunder for Harden and assorted flotsam. Lin and Asik, while now considered somewhat expendable with the acquisition of Howard and emergence of Patrick Beverley, were crucial in getting the Rockets to the playoffs. Had they not reached the eighth seed, it is less likely that Houston would have proved an attractive enough destination for Howard.
Finally, excising Scola and Lowry’s salaries while letting Dragic and Lee walk enabled the Rockets to again have maximum cap room this year to sign Howard. Rather than pay big money to lock up players who were at best league-average starters at their positions, the Rockets maintained spending discipline to enable them to strike when true superstars became available.
This offseason has been notable for four teams who have committed long-term money to what project as mediocre rosters in 2013-14. Which of these teams has done so while maintaining the flexibility to improve further, and which have locked themselves in to mediocrity for years to come?
New Orleans Pelicans
Projected 2014 Cap Room: Negligible
Potential Key Rookie Extensions: Anthony Davis, maximum salary per year in 2016.*
*An educated guess at what the player would sign for, should the team choose to retain him.
A year ago, the Pelicans had just signed Ryan Anderson away from the Orlando Magic in restricted free agency for the value price of four years, $36 million while matching an offer to restricted free agent Eric Gordon to the tune of four years, $58 million. The future looked extremely bright, as they projected to have approximately $20 million in cap room this summer in addition to high draft picks this year and next. Instead, the Pelicans traded those picks for Jrue Holiday and signed Tyreke Evans into their cap space. Now, the Pelicans are locked into a team that most are projecting to fall just short of the playoffs this year.
The saving grace for the Pelicans is the fact that they took chances on young players with a significant chance of improvement. Anthony Davis, Holiday and Evans are all 23 or under. Davis in particular could well mature into a superstar, although the chances of him getting enough of the ball to up his usage rate to star levels are certainly lessened with the three gunners on the perimeter. Moreover, by the time Davis’ presumed maximum extension* will kick in, Anderson and Gordon will come off the books. Gordon has a player option for 2015-16, so he could even opt out the summer before.
*For the purposes of this exercise, we will assume he gets one. If he proves unworthy of the max, these Pelicans will not be contenders regardless of the efficacy of their other moves.
The Pelicans’ young core certainly has a ceiling significantly above mediocre, but GM Dell Demps* had better hope the pieces fit and improve. Otherwise, he might have thrown away a very high ceiling at the altar of short-term improvement.
*It might be more accurate to credit or blame owner Tom Benson for these moves, as reports have indicated his desire to improve immediately was the driving force behind them.
Projected 2014 Cap Room: Likely room for maximum salary, depending on possible Greg Monroe extension.
Projected Rookie Extensions: Greg Monroe, $11-13 million per year in 2014. Brandon Knight, $5-8 million per year in 2015. Andre Drummond, $10 million to maximum per year, 2016.
The Pistons’ main acquisition over the summer was Josh Smith, who played mostly power forward for the Atlanta Hawks but by most accounts will start at small forward in Detroit. Due to his inability to shoot, Smith’s fit at small forward is an awkward one, especially on a Pistons team that lacks a single proven outside shooter.*
*As you have heard before in this space, I am of the opinion playing smaller power forwards at small forward generally neutralizes their offensive advantages and relegates them to shooting jumpers because they lack the quickness to get by opposing small forwards or the space to post them up.
Some have defended the Smith signing by noting that a) the Pistons had to spend money to reach the salary floor b) that he is an asset that could be traded later on if needed, and c) that the fit will be less of a problem if Monroe is traded for backcourt help. But the biggest problem with the Smith signing is that he is unlikely to be anywhere near worth his $14.2 and $14.8 million salaries in the last two years of his contract. Even at age 27, Smith’s game is still largely dependent on athleticism aside from his underrated passing. The problem is, that athleticism is already noticeably on the decline. He does not manage nearly the number of spectacular highlight plays that he used to, and his body fat looks to have risen quite a bit in the last few years. He does not project to age well, especially on offense.
Smith’s contract would have made a lot more sense for a team with realistic hopes of contention in the next few years. He was rumored to be involved in a sign and trade with the Rockets, which would have been a perfect destination for him since the team should be battling to be in the top half of the West playoff bracket. In Detroit, however, Smith’s contract is likely to be an albatross by the time Detroit’s youngsters like Monroe, Andre Drummond, Brandon Knight and Kentavious Caldwell-Pope are mature enough for the Pistons to contend. But in the meantime, Pistons fans can revel in plays like this:
The good news is that Detroit does maintain flexibility even with the Smith signing. Assuming Monroe signs an extension averaging around $12 million per year, the Pistons could still have near maximum cap room next summer with the expiration of Charlie Villanueva and Rodney Stuckey’s contracts. However, looming extensions for Brandon Knight and Andre Drummond may force the Pistons to limit the length of any contracts given out in the summer of 2014.
Projected 2014 Cap Room: Up to a few million.
Projected Rookie Extensions: None of consequence.
Hawks GM Danny Ferry was lauded for pawning Joe Johnson’s contract onto the Brooklyn Nets and creating the flexibility for the Hawks to make offers to two max free agents this summer. Unfortunately, the dream of uniting Chris Paul and Dwight Howard in Atlanta never materialized, and the Hawks saw the aforementioned Smith leave for Detroit. The Hawks instead used their cap room on matching a four-year, $32 million offer in restricted free agency for incumbent point guard Jeff Teague, re-signing Kyle Korver to a four-year, $24 million pact, and signing Paul Millsap from the Utah Jazz for two years, $19 million.
So where does this leave the Hawks? While none of these are really bad contracts in isolation, they do leave the Hawks with only a little projected cap room in the 2014 off-season. They could potentially cobble together max cap room by waiving the non-guaranteed Lou Williams and finding a taker for Korver, Teague or Millsap. But, they are on track for max contract cap room again in 2015 when Millsap’s contract expires. Getting him for only two years and $4.5 million per season less than Smith was a coup. Moreover, none of the deals they signed this year are likely to become untradeable in the interim*, so the Hawks can take advantage of any potential opportunities to move those players should they arise. They also picked up two potential assets in the 2013 draft in Dennis Schroeder and Lucas Nogueira. Schroeder in particular has shown flashes in summer league.
*Korver comes the closest, as his deal runs through age 36. But his shooting should age well, and the Hawks smartly had it decline in value throughout the length of the deal rather than providing the typical annual raises. Teague’s deal is also a flat $8 million per season.
All told, the Hawks have done well to maintain a competitive team while retaining flexibility over the next two years.
Projected 2014 Cap Room: Up to a few million, depending on Larry Sanders/Brandon Jennings extensions.
Projected Rookie Extensions: Larry Sanders, $11-14 million, 2014. Brandon Jennings (if re-signed), $6-10 million per year, 2013
This offseason, the Milwaukee Bucks signed or acquired four players whose salaries total $34 million over a combined nine years. None of those players projects to be even a league-average starter this season. Luke Ridnour will be paid $4 million to play backup point guard, O.J. Mayo will make $24 million over the next three years with a history as a below-average starter at shooting guard and Zaza Pachulia will make $15 million over three years as the fifth-best big man on the team. Carlos Delfino, at two years, $6 million guaranteed as a projected small forward, is a better proposition. But with a very promising young frontcourt in Larry Sanders and John Henson, the Bucks would have been much better off taking a step back this year and trying to get a young stud on the wing in the 2014 draft while filling in the remaining holes with 2014 free agents.
Instead, the Bucks punted $13 million of 2014 cap room on Mayo and Pachulia. This is to say nothing of the situation with Brandon Jennings, a restricted free agent who may well play for the qualifying offer this year and walk next year. At least Jennings has the potential to be a slightly above-average starter–the Bucks’ decision to let him dangle while signing Mayo and Pachulia for more money than it likely would have taken to sign Jennings is difficult to understand. These signings likely ensure that the Bucks will remain in NBA purgatory for quite some time.