The players and their agents knew the salary would rise significantly in two years. So why sign four and five-year deals this summer? Former power agent and current Phoenix Suns president Lon Babby has the answer.
While negotiations between the NBA and its TV partners ESPN/ABC and TNT were proprietary this summer, rumors leaked that the TV deals would at least double in value beginning in 2016.
Players knew it. Agents knew it. Since revenues and the salary cap are a function of each other, they knew the money available in two years would dwarf the money they could get this summer. Many projected at least a 30% jump in the salary cap beginning in 2016. A 30% jump in the salary cap means a 30% jump in player salaries on new free agent deals.
Hence, the prevailing expectation was that the better free agents would fight hard for shorter deals with opt-outs in 2 or 3 summers, rather than taking the full 4 or 5 year deals being offered by teams.
NBA front offices knew it as well. In fact, NBA front offices knew the new deal would more than double (it ended up tripling) and the agents most likely had a strong suspicion of the same, if not the facts themselves.
With front offices knowing this, it's no surprise they tried hard to lock up the game's best free agents to 4 and 5 year deals at today's prices because today's good deal is tomorrow's steal.
"It was a factor," Suns president Lon Babby of the looming TV deal. "Everybody saw this was a development coming on the horizon."
So who won this tug of war on contract lengths?
Don't hold your breath. The war never materialized. Of the NBA's very best free agents in their prime, only LeBron James insisted on a deal that expires within two years. LeBron signed a "maximum" deal that expires in two seasons , but also allows him to become a free agent next summer via a player option. It's possible the NBA and the union will agree artificially increase the cap by half the expected required jump in 2016 to "ease in" the increase. If that happens, LeBron can re-sign to a higher salary as early as next summer.
The plan was a sound one: get into the free agent market as often as possible during your prime. Sounds genius, right? If not genius, it at least sounds logical.
But none of the other free agents took the same route. Every one of the free agents in their primes took the most years possible.
Sure, Lance Stephenson took three years from Charlotte. But that was a function of being squeezed out this summer. He accepted $9 million/year (25% less than he wanted on day one) in exchange for hitting the market again in three years. His initial request of the Pacers or any team was a longer-term deal at his asking price.
Chandler Parsons took three years from Dallas, but that was Mark Cuban's doing more than anything. He constructed a contract offer for Parsons in such a way that Houston would refuse to match. That included the one less year, a major trade kicker (15%) and a maximum salary offer that was at least 20% more than Parsons' real worth. Cuban won.
Chris Bosh, Carmelo Anthony, Eric Bledsoe and Marcin Gortat all took the full five years to stay with their current team. Each is very likely to still be playing at a high level in two seasons and could have requested even higher salaries, but chose the security.
The other big names took four years, either from free agent offer sheets or deals constructed by "home" teams to slightly out pay what another team could offer without going the full five.
The Phoenix Suns had a good summer. Knowing free agent salaries could rise at least 30% in 2016, they locked in four of their six free agents to at least four years at today's rates. Only Anthony Tolliver and Zoran Dragic got shorter deals, but that was due to the Suns offer more than their desires.
- Isaiah Thomas, 4 years, $27 million, $6.75 million average annual value (AAV), through 2018
- Markieff Morris, 4 years, $32 million, $8 million AAV, through 2019 (extension)
- Marcus Morris, 4 years, $20 million, $5 million AAV, through 2019 (extension)
- Eric Bledsoe, 5 years, $70 million, $14 million AAV, through 2019
All are 24 or 25 years old, just barely entering their primes. Beginning in 2016, with an increased salary cap likely raising the mid-level exception into the $9 million AAV range, those deals will look like steals.
Why would the players commit to such long terms deals?
"As a player," Babby said. "It's a balance between when do you want to end up back in the marketplace and how much of your future do you want to secure? The challenge is finding that balance."
In the Suns players cases, each wanted long term security over the potential of more money in two seasons.
"For the Morris twins, we were prepared to give them the longest deal we could offer," Babby said. "For them, part of it was their desire to secure their future."
But Babby also said there was a special catch with the twins: "For the twins it was also that were the only place that was likely to provide them the opportunity to play together. They wanted it badly, and we wanted it badly too because we know they play better together. We wanted to put that out there for as long as possible. There's no guarantee they will stay here or stay together, but we pointed out the most likely possibility was in Phoenix."
Bledsoe and Thomas wanted long-term security as well. Bledsoe's injury history likely played at least a small part. From the outset of free agency, Bledsoe's camp demanded 5 years at $84 million ($16.8 million AAV). The Suns initially countered with 4 years and $48 million ($12 million AAV) based on what other teams could offer, but eventually relented in a compromise that saw the two sides come closer to the Suns' AAV in exchange for year five.
"For us, the way to resolve the Eric Bledsoe situation was to take advantage of the fifth year which only we could offer," Babby said. "That's what drove that compromise. In Eric's case that fifth year helped."
The NBA is a fickle business. There's only 450 jobs out there each season and only so much money for each player.
"The significance of what events might occur in the future played a role but not a significant role in the negotiations," Babby concluded, regarding the Suns' summer of signings.