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Why Harrison Barnes Turning Down $64 Million Was Smart

Harrison Barnes just turned down a contract that would’ve paid him $64 million over the next four years. That’s a lot of money, particularly for a player who hasn’t really established he’s much more than a role player or fifth starter, even if it’s on a world championship team.

Based on Real Plus-Minus at ESPN, Barnes was 21st in the NBA last year among small forwards. Based on efficiency at HoopsStats.com, he was 22nd at his position. His 13.3 Player Efficiency Rating was 32nd among qualified 3s, according to RealGM.com. None of these things screams “elite small forward.”

Heck, we can make an argument that they all say “below-average starter” much more easily than that. Yet, in spite of all that, the fact that he just turned down the chance to make more money than teammate and reigning MVP Stephen Curry (who made just $10.7 million last year and will only make $11.4 million next year) is not only understandable, it’s the right move.

Rein in the guffaws before you react. There are multiple reasons that this is a sign of things to come, and it’s similar to why the Cleveland Cavaliers have yet to ink their significant role player, Tristan Thompson, to a deal.

The NBA fan tends to look at “worth” based on what players are currently making. But market value, not actual value, is how NBA contracts are based.

For example, many of the cereal producers who make the Kellogg’s or Post brands will also make generic brands of the exact same cereal. For example, theoretically, the only difference between “Crunch Berry” and “Berry Colossal Crunch” could be just the packaging (if that’s one of the ones where this is true). Just for the purposes of our analogy, let’s assume they’re the same.

The store gets these two products, which are identical in terms of “value” in that they’re actually the same thing. But the market will pay more for one than the other because of packaging and marketing. One is “name brand” and the other is “generic.” In other words, market, not substance, is what determines the value of the thing.

When we’re looking at NBA contracts, we’re looking at market value, not real value. What Barnes produces relative to the NBA average isn’t relevant; it’s what teams are willing to pay for him. And that’s what gets all the weirdness to set in.

When Stephen Curry signed his extension in October 2012, he was coming off an injury and the cap was $58.7 million. Derrick Rose was on the verge of missing the year after inking a massive max contract and tearing his ACL. The notion of throwing big money at an injury-prone point guard — regardless of what his potential might be — was cause for skepticism.

The NBA had just come out of a lockout the year prior, and the future cap was something of a question mark. Teams were tentative on gambles. The heavy penalties on taxpaying teams had teams cautious about going over the cap.

It was, to put it succinctly, a buyer’s market. As it was, Curry’s deal at four-year, $44 million was considered reasonable to both parties. Now it’s arguably the best contract in the NBA (from an owner’s standpoint.)

But the difference between what Barnes was offered and what Curry got isn’t as extreme when you think of it this way: Curry’s deal was worth 18.4 percent of the cap when he first inked it. A four-year, $64 million deal for Barnes would start at $14.4 million provided he has the max 7.5 percent pay raise (which is what Curry had). That would be only 16 percent of the cap this year and only 14.3 percent of the cap the next year.

When adjusting for the cap, it’s actually quite a reasonable deal.

The question isn’t, “Is he worth it?” so much as, “Will someone else pay him that?” And the answer to that question is a resounding yes. And there are myriad reasons why.

Barnes shot 40.5 percent from deep last year and had a 1.23 DRPM, meaning he’s what we call a “plus defender” on the wings. That combination of skills makes him a “3-and-D” player that’s all the rage on the market right now. That’s the commodity that everyone is looking for, and it’s supply and demand. There are only so many Danny Green‘s to go around, so once you get past him, you start getting into the next level of guys who are pretty good, but not great, in both areas.

Add in the fact that Barnes has some ability to create (almost 30 percent of his buckets last year were unassisted), and there’s a little extra incentive to snatch him up. No, he’s not on par with Draymond Green in his defensive ability, nor is he a lights-out shooter. But he’s solid in both areas. And that’s enough to earn some bids for his biz.

Then you factor in that what will be unprecedented next summer isn’t just a leap in cap space, but in the sheer volume of teams who are going to have money to spend. Almost everyone will be below the cap.

Look, you put a bunch of billionaires in an auction, the ones who don’t spend their money on the top item are going to find second- and third-rate things to bid on.

Likewise, just because there’s more money doesn’t mean that the players got any better. So, that means that all this cap space will be floating around, but teams will be bidding on the same goods. And with all that extra money and the same supply, the laws of economics dictate that inflation is going to kick in.

And that means the cost of a guy like Harrison Barnes is going to go up. And it doesn’t have to go up to the point where every team would have to pay him that. It doesn’t have to go up to where the average team would pay him that. It only has to go up enough that one team would pay him that. A four-year, $75 million offer might seem insane for Barnes, but that could be the market for a next-tier, 3-and-D wing next year.

And that is a safe bet. At least one team, flush with spending cash and spurned by the stars will make him the “big name” they signed and gamble he’s going to break out if he’s given the chance. (See the Detroit Pistons and Josh Smith.) Or a team who’s only a two-way wing away from contending for the title will see him as the answer and fork over the cash.

It’s almost unfathomable that Barnes would be offered anything less than $15 million a year.

That means there’s almost no risk involved and a huge chance for reward with this “gamble.” In Black Jack terms, he’s hitting on 11 with only face cards left in the deck. With very little chance of getting less, and a very great chance of getting more, Barnes did the right thing in rejecting the offer. And he won’t be the last. Look for agents to be advising their clients to forego all rookie extensions because virtually anything teams offer now will be exceeded next summer.

Unless it’s a max deal, it’s almost detrimental to the player to accept the offer.

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