Basketball is an American game, the NBA is an American league, and the economics of it are entirely American, even as it markets itself worldwide and attracts international players. Capitalism still rules here.
And that particular reality is about to throw some fans into a serious case of sticker shock, as a confluence of events is going to result in a group of players getting seriously, massively, grotesquely, bizarrely overpaid. And there’s nothing that can be done to stop it.
On one side, you have this new TV deal, as Tom Ziller of SBNation points out.
There’s a massive shadow over the 2015-16 NBA season. The shadow created by the giant sack of money hanging over the league, ready to drop on July 1, 2016. The league is always changing, but the infusion of money from a new national TV broadcast deal is going to shake the NBA to its core. Some of the impacts will be positive, some negative. But the impacts are coming, and fast.
Ziller stresses that $1.07 billion (with a b) in cap space is going to be spent next summer and adds:
Only $1.6 billion of that is currently committed, meaning NBA owners will need to spend an additional $1.4 billion on player salaries in ’16-17 one way or another.
It’s important to note here that this isn’t money the NBA can spend. It’s money it has to spend by virtue of the collective bargaining agreement. If a team doesn’t reach the salary floor, it’s required to distribute the difference to its existing players.
Ergo, one way or another, that very significant chunk of change is going to be spent.
And, in addition, TFB colleague Morten Jensen points out, there just aren’t that many franchise-altering players available—truly available—next summer. Sure, there’s Kevin Durant, but after that the pickin’s slim down to the likes of Andre Drummond and Jeff Teague, and even those guys are likely to get max offers from their current digs.
Next offseason is best understood if you consider it like 30 billionaires who need a used car bidding against each other. And they all have to buy a car. As they each buy a car, the price of the remaining cars goes up because no one wants to be stuck in the 1985 Yugo with a radio stuck on static and no air conditioning.
So they start throwing down $200K on the 2009 Prius. It’s not worth it, but it’s worth more than the rest. And that’s how the Harrison Barnes of the world end up getting over $20 million a year and why Eric Gordon will be making more than Stephen Curry a year from now.
Barnes averaged 10.1 points and 5.5 boards as a third or fourth option in the Golden State Warriors’ fast-paced offense last year, but it’s a very realistic possibility he can get a max bid starting at $21.5 million just because he’s a 3-and-D wing in a league where those are climbing in value faster than gold. He’s still young with upside and well…what else are you going to spend it on?
Tristan Thompson is a seemingly never-ending negotiation with the Cleveland Cavaliers, trying to get what he can out of this summer, but not all that reluctant to miss a year if he has to because he knows that if he does, he’ll get silly money next summer. In theory, if he did, he could actually make more money over five years by not playing this year than by playing this year.
If he signed a four-year max deal next year, it would be worth $91.8 million. The Cavs reportedly offered him a five-year, $80 million. If I paid you $11 million more to not work for a year, would you do it?
He has the potential to be a consistent double-double machine, but his scoring ability is limited. Sure he’s efficient, but he rarely gets points away from the rim that will always hinder him. But when you have that much money to spend, and you have to spend it, who else are you going to grab? Pau Gasol?
Jordan Clarkson, who parlayed a second-round pick into an NBA career last season, will be a restricted free agent next year, and should get a massive offer from someone. Sure the Lakers can match it, but he’s getting paid either way.
Terrence Jones has shown flashes of promise and would have worth around $8-10 million a couple of years ago (reference Taj Gibson’s contract) but he’ll field an offer in the mid-teens. Ryan Anderson could get an even better offer with the price of stretch 4s going through the roof, even if he can’t defend a rubber duck on crutches.
There will be those looking to gamble on guys like O.J. Mayo and J.R. Smith, who have shown they are, at best, mid-level players and pay them eight figures. Don’t even rule out the idea of Gordon (if he can stay healthy this year) or Aaron Afflalo getting a similar offer.
Don’t think of it in terms of fairness and compare their worth in some sort of humanitarian sense with the soldier in Afghanistan. It’s just the cold, hard reality of capitalism. It’s supply and demand at work. It’s what happens when the former is low, and the latter is high.