The Best Potential Values of Free Agency
While stud free agents like Chris Paul, Dwight Howard, and Josh Smith steal the headlines in the early days of free agency, many smart teams eschew splashy acquisitions in favor of greater bang for the buck. With a relatively flat salary cap as the players’ percentage of basketball-related income is reduced under the 2011 Collective Bargaining Agreement and all but the biggest markets loathe to pay the new more punitive luxury tax, finding cost-effective additions is especially important for would-be contenders.
Rather than level the competitive playing field for small-market teams as the owners purportedly intended, the harsher tax seems to have hurt them so far. Previously, small-market teams were willing to go over the tax at times to finance a contender. Now, small market contenders seem unwilling to go into the tax, as shown by Oklahoma City’s trade of James Harden and the Pacers adamant statements that they will not go into the tax. Meanwhile large market teams like the Knicks, Lakers, Bulls and Nets have bit the bullet to do so. Of course, the new luxury tax has helped level the financial playing field, as small market teams get more tax money while having a ready-made excuse not to go into the tax themselves. But with small market teams unwilling to spend, getting value in free agency is all the more imperative.
Ray Allen and Nate Robinson had perhaps the two most amazing moments of the playoffs; Allen signed for the mini mid-level exception, while Robinson signed a non-guaranteed contract for the veterans’ minimum. Danny Green, who was on track to be Finals MVP at one point, was famously signed (and then re-signed) by the Spurs off the scrap heap. Meanwhile, Indiana may well have lost the 2013 Eastern Conference Finals due to its execrable bench – whiffing on signing Gerald Green and D.J. Augustin as free agents was ultimately the death knell for their amazing season.
Great free agent bargains usually meet one or more of the following criteria:
Low Money and Short Years
The first key criterion for a bargain free agent is, of course, actually being a bargain. This obviously means offering a high amount of production for the money paid, but it also usually means that the player is willing to sign a low-risk short-term contract or one that is non-guaranteed for the later years. Searching for bargains is not an exact science; if these players were sure things they would make far too much money to fit the category. Instead, finding free agents on the cheap is generally a gamble with a significant likelihood of failure. If that occurs, the team should be able to cut bait with little consequence and try again with a new player. In general, that means we are discussing players who might be willing to take 2 or less guaranteed years for approximately $3 million per year (the tax-payer mid-level exception) or less.
If the player doesn’t work out, non-guaranteed years are still very useful because they can act as immediately expiring contracts at the start of the following league year the next July. (This separates a non-guarantee from a team option, which must be exercised before the end of the league year.) The player can be traded and immediately waived by a receiving team looking to reduce salary.
A High Likelihood of Improvement
Perhaps the most important skill in identifying potential bargain free agents is evaluating who is likely to improve their performance from the previous year. After all, players who performed well the previous year generally command a high salary far beyond the “bargain” category. Ironically, a team’s acumen in finding undervalued free agents usually results in simply having to repeat the process the following year, as their smart acquisitions price themselves out of the sort of short-term, low-dollar contract that made them bargains in the first place. Therefore, teams must reliably be able to identify these types of players.
So what indicates that a player can improve?
This is generally the greatest harbinger of improvement. Whether it’s through skill improvement, working on their bodies, learning to play hard, or simply getting a little less crazy, young players have the most untapped potential. NBA players typically peak between ages 25 and 27, so players in or slightly below that age range are ideal. The older the player, the less likely he is to dramatically improve. A subcategory is the so-called “second draft,” in which players who underperformed on rookie contracts but are still young enough to improve are signed or traded for by another team.
Why was Nate Robinson perceived to play so much better last year? His PER was actually lower than the year before in Golden State, but he was able to contribute to a winning team because the fit with the Bulls was so good. The Derrick Rose-less Bulls severely lacked perimeter shooting and shot-creation, and Robinson provided both. Meanwhile, the Bulls’ excellent defense provided a backstop for his literal shortcomings in that area. Identifying players who uniquely fit the team’s system is a key to obtaining quality players on the cheap.
Bounce Back Candidates
Oftentimes a down year going into free agency can depress a player’s value the following season. But the player may have been misused, clashed with his coach, or simply missed more shots than normal the preceding year. Two-point FG percentage in particular is prone to quite a bit of random variation. A player who has previously established a quality level of performance (and is still young enough to bounce back) can make for a great bargain, especially if he is motivated to reestablish his value.
Previously injured players also provide a potential bargain. This is especially so where the player is coming from a team with a poorly-regarded training staff or coming to a team with a well-regarded training staff. Although 2012-13 was a lost year for the Suns, they still managed to get more out of Jermaine O’Neal than anyone thought possible.
In addition to players likely to improve, another potential bargain free agent is one who actually did play well the preceding year but for some reason is undervalued by the league or his previous team. This can be a player who played well in short minutes but went relatively unrecognized, or someone who the team’s analytics have identified as a contributor despite middling traditional statistics.
Playing in Obscurity
Another potential bargain is a player who played in relative obscurity. This category generally applies to players from overseas or the D-League, although players toiling in NBA backwaters may also fit. While there are certainly the odd “quadruple A” players in basketball, for most players statistical translations from other leagues prove relatively accurate. American players who have migrated overseas but performed well tend to be especially undervalued, as the thinking is that if they were any good they would have been identified as NBA players when leaving college. But even if the league were perfect at identifying the best players out of college, teams too readily discount the potential for Americans to have improved overseas. Players such as Anthony Parker have washed out of the league or slipped through the NBA cracks entirely, only to polish themselves into effective NBA players in Europe.
Players who do not fit the traditional notions of size or skill-set for their position can also prove free agent bargains, especially if the fit is good. Short, high-energy power forwards, shooting guards who can’t shoot (think Tony Allen before he came to Memphis), centers who are too skinny to defend the post, or point guards who look for their own shot first are prime examples of such players. These players can still be very effective, especially off the bench in relatively small doses.
The Contender Discount
Sometimes players everyone knows are good decide to take less money to play for a contender. Here is a checklist to identify such players: Is the player a veteran? Has he made a ton of money in his career? Might he be a shameless frontrunner/just want to win? Was he treated poorly and almost traded by his former team? Is he absolute money down 3 with seconds left in Game 6 of the Finals? Has he made more 3-pointers than—ok I’ll stop now. They aren’t hard to pick out.
So who might be the bargains of this free agent class?
Mike Dunleavy, Jr.
2012-13 Team: Milwaukee Bucks
New Contract: Verbally agreed with Chicago Bulls for reported $6 million over 2 years.
The Bulls surprised most team observers who had branded them cost-conscious by offering their mini mid-level to Dunleavy, who reportedly spurned higher offers elsewhere to sign at a relative discount with a contender. A plus-minus all-star in Milwaukee, Dunleavy shot 42.8 percent on threes last year and finally provides the Bulls with a credible backup at the small forward position. His acquisition has been capably lauded elsewhere, but it bears repeating that he is a fantastic fit for the Bulls. Though Dunleavy is a wing, he helps mitigate their current lack of a real fourth big man by allowing Luol Deng to move to the four at times. Meanwhile, Deng, Jimmy Butler, and Kirk Hinrich will protect Dunleavy from his primary weakness, which is difficult individual matchups on defense. Compared to the other contracts gleaned by wing shooters thus far in free agency, Dunleavy is a steal. He’s also a heady defender.
2012-13 Team: San Antonio Spurs
After starting parts of the previous three seasons with the Spurs, Blair’s playing time suffered last year as the Spurs finally found a way to play Tiago Splitter and Tim Duncan together and boost their defense. All in all, it was a down year for Blair as his once astronomical offensive rebound rate declined to mortal levels and Gregg Popovich apparently grew tired of his physical limitations on defense and in finishing at the rim. Nevertheless, Blair was effective the previous three years, posting PERs above 17 each year before regressing to 14.6 a year ago. Given his defensive issues, PER overrates Blair’s abilities. At his age, he seems likely to bounce back so long as he is not overexposed on defense. After playing so little, he should be available for a relative pittance.
2012-13 Team: Charlotte Bobcats
Two years ago, Williams was one of a parade of successful D-league call-ups that also included C.J. Watson and Kelenna Azubuike. He parlayed an effective 2010-11 with the Warriors (which included a 58.5 True Shooting Percentage and 42 percent shooting on 3s at 5.3 per 36 minutes) into a 2 year contract with the Bobcats. Since then Williams struggled mightily with injuries, but if he can put those behind him he could be a steal as a shooter off the bench. Even in an injury-plagued year in 2012-13, he managed a respectable PER of 13, and he is young enough to bounce back.
2012-13 Team: Dallas Mavericks
It was another lost season for Beaubois, who finally succumbed for the year to a broken hand suffered on March 17 against the Thunder. Beaubois burst onto the scene in 2009-10 for the Mavs, scintillating with a 40 percent mark on threes and an 18 PER as a 21 year old. He also recorded a 40 point game against the Warriors and almost pushed the Mavs to a miracle comeback in Game 6 of their first-round loss to the Spurs, after which Rick Carlisle was pilloried for not playing him more. That summer Beaubois broke his foot, had a second surgery on the foot that caused him to miss the Mavs’ championship run, and has never again reached those heights.
Nonetheless, Beaubois still shows potential—and is young enough to realize it. Even these last three years, he has shot over 60 percent at the rim while his jumper has deserted him. Two years ago, he managed a PER of 15. And he drips defensive potential due to his wingspan and athleticism. Coming off his rookie contract, Beaubois is a quintessential “second draft” player.
Daniel Gibson - Still only 27, Gibson had never shot below 38 percent on threes as a pro until last year’s 34 percent. This is clearly an outlier, especially since it has a ready explanation in the fact that Gibson was asked to play more point guard last year with Kyrie Irving’s various injuries and the lack of any other credible backup. Odds are that Gibson can still stroke it, and he would be a great fit on a team with playmaking wings.
Bobby Brown - The 6’1” Brown had various cups of coffee in the League from 2008-2010, never particularly impressing despite (or perhaps because of) his high usage rate as a nominal point guard. Since then he has evolved into one of the best guards in Europe at Montepaschi Siena, keeping his high usage but improving his outside shooting to 36 percent on 3s in the Euroleague this year. Kevin Pelton’s statistical translations like him, although I fear that at age 29 his shooting last year may have been an outlier and he has little room for improvement overall. Nonetheless, a cheap contract for Brown could make it worth finding out whether he can provide Bobby Jackson-level production off the bench.
Dwight Howard - Yes, he doesn’t remotely fit the criteria listed above, and he will make over $20 million per year for at least 4 years on his next contract. Plus, Howard’s back injury and diminished performance last year portend great risk. But in a league where the maximum salaries are capped, Howard has the potential to far exceed the value of his contract if he can return to the lofty heights he reached from 2008 to 2011 as a Top-5 player. While cheap players are nice, the true bargains under the NBA’s Collective Bargaining Agreement are the superstars.