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Paging Bima: The Josh Smith Contract

Discussion in 'Houston Rockets: Game Action & Roster Moves' started by justtxyank, Feb 25, 2015.

  1. justtxyank

    justtxyank Contributing Member

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    So it's a little early still and I will admit to being among the ones who is surprised to even care as I expected Josh Smith to be a total dud. I was wrong and am happy to be so.

    But, that brings us to Josh Smith's potential earning power in the offseason. Smith wisely chose NOT to take the 2 year offer from the Rockets, opting to sign on for a single season. This brings him into free agency this offseason with the potential to make some more money.

    A quick explanation for people on Josh Smith contract from Detroit and how it works going forward:

    As Josh Smith was waived after September 1st of this year, his 2014 salary was paid to him on normal schedule this year, but the remaining salary was stretched out over what amounts to 5 years, or through the 2019 season. It comes out to 5.4 million a year beginning next year. The Pistons have incentive for him to sign a new deal with another team, as they get to use the right off offset to reduce the amount they owe him. The way this works is that for every dollar above the 1 year veteran's minimum his new contract is for, the Pistons get to reduce the amount they pay Josh by 0.50.

    So, how does this impact us this offseason? I've heard people suggest that Smith would be easy to resign because he likes it here, the offset would negate any pay difference, etc. I'm not so sure. My premise is based on a few factors:

    1) There is always at least one team that is stupid enough to overpay a player
    2) Players will almost always go for the money
    3) The Rockets will only have their MLE this offseason
    4) The Rockets will want to use some portion of the MLE to re-sign KJ McDaniels AND potentially a foreigner

    REVISED

    OK, so here is a revised spreadsheet to review. This compares the 120% of current salary option to the tax payer MLE to the non tax payer MLE and then a mystery team's $8 million offer.

    The columns to the far right show you the total salary for both a 5 year comparison and the first 2 years. The reason for this is that the Rockets could theoretically offer Smith a 2 year contract with the promise of taking care of him in year 3 when they have his bird rights. He'd have to bet on himself obviously for that to be appealing.

    [​IMG]

    What this chart says to me is that an offer of the full non-tax payer MLE would be comparable to an $8 million offer on the market. I just can't imagine that the Rockets will want to do that as they will almost assuredly want to use some of that MLE on KJ. On top of that, if they use the MLE up on one player they won't have any exceptions to use on other free agents at all.

    If they were to go with the regular 120% of current salary offer, Smith would be potentially walking away from close $6 million over two years.

    No matter what road the Rockets take, if there is a team out there that wants Josh Smith and values him at least at $8 million, the Rockets would be asking Smith to leave a minimum of $2.5 million on the table to stay in Houston.

    Paging BIMA: Are my numbers here correct?

    Thoughts?
     
    #1 justtxyank, Feb 25, 2015
    Last edited: Feb 26, 2015
    7 people like this.
  2. justtxyank

    justtxyank Contributing Member

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    Also keep in mind that it wouldn't work exactly this way because he'd probably be signing for 2 or 3 years at whatever the Rockets offered and then doing a new deal, so that would help as well.

    Here's another grid reflecting that possibility:
    [​IMG]

    This reflects Smith signing a 2 year MLE deal with the Rockets and then a new 3 year deal after that with 5% raises VS a mystery team signing him this offseason for $8 million year 1 with 5% raises for 5 years.

    This still amounts to $6 million extra dollars. Not sure if that is significant to Josh Smith or not. Maybe this is the scenario that the Rockets would want to sell Smith on? He'd have to bet on himself not getting injured and being worth a big contract following 2 more seasons.
     
  3. dobro1229

    dobro1229 Contributing Member

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    A point I'd like to emphasis that I hear a little too much-

    -There is this notion floating around that says "If you look at what Detroit is already paying him... he's already making X amount"

    What Josh Smith is already making from his previous Detroit contract will not factor in his decision making come July 1st. I think we need to be open and honest that its a business, and "Earning It" really has nothing to do with it.

    He's going to take the maximum amount that he can as we all would do. I think him and his agent will not even factor in what he's already making from Detroit as a justification to sign for less.

    Just wanted to double point that out before it gets floated around again and again where we expect Josh to take less than his market because of what he's already owed.
     
  4. TheFreak

    TheFreak Contributing Member

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    You don't even know what a write-off is.
     
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  5. justtxyank

    justtxyank Contributing Member

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    Not sure if serious...
     
  6. joeson332

    joeson332 Member

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    damn, show me your ways
     
  7. larsv8

    larsv8 Contributing Member

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    I think the stretch provision only stretches the cap hit. He will probably still be paid the same amount over the same number of years as his original contract.

    Also, I really don't think many teams will offer Smith a significant deal.
     
  8. justtxyank

    justtxyank Contributing Member

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    That's the big mystery. If a team for example is only offering him $5 million, suddenly the numbers shrink considerably.
     
  9. Haymitch

    Haymitch Custom Title
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    Seinfeld reference, I think.

    <iframe width="420" height="315" src="https://www.youtube.com/embed/XEL65gywwHQ" frameborder="0" allowfullscreen></iframe>
     
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  10. okeezie

    okeezie Member

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    Happiness means more than you think. Especially after the Detroit debacle. I doubt he signs with the 76ers for the most money.
     
  11. Mr. Clutch

    Mr. Clutch Contributing Member

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    In 2-3 years I think he's much less likely to get a big contact. He'll be over 30
     
  12. YOLO

    YOLO Member

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    he's been looking pretty happy hanging out with harden on saturday nights in houston :cool:
     
  13. jjc1

    jjc1 Member

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    He may be willing to sign a 1-2 year deal around $4 million per year to stay with us. I think he really likes it here and Dwight is signed for the next 2 years as well. That will probably leave us with a little under $2 million in MLE money to re-sign KJ.
     
  14. try

    try Member

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    I actually looked this up a while ago. The salary of every waived player is stretched (twice the number of years remaining plus one), thus increasing the amount of years the salary is paid. So Josh Smith gets $5.4 million per season by the Pistons over the next five years—and would have even if Detroit didn't stretch the cap hit!
    In addition, teams can decide to "match" the payment schedule by stretching the cap hit as well, that's what is usually meant when talking about the "stretch provision".

    Source: CBA FAQ, Questions 65 and 66
     
  15. malakas

    malakas Member

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    Which team would take a gamble on him after what happened in Detroit?
    Most contenders will not. A couple of months imo are not enough and GMs of contenders are reluctant to spoil the chemistry like this.
    Maybe one of LA/NY ?
     
  16. CertifiedTroll

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    I can no longer trust cyber x or bima. They obviously dont know much about modern age if they still use pagers.
     
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  17. Mr. Clutch

    Mr. Clutch Contributing Member

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    Really? Chemistry is your concern after he fit so easily and was willing to go to the bench?
     
  18. malakas

    malakas Member

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    That was right after taking a HUGEE ego hit and humble pie and going to this bbf's team. It may work for the Rockets but other GMs will think will it work for us or we will have a big problem and he will revert back to his Detroit days?
    I don't think there will be such a big market for Josh Smith as you think.
    My guess is he will resign for the Rockets.
     
  19. Invisible Fan

    Invisible Fan Contributing Member

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    As long as they know their ish, they could use carrier pigeon for all I care.
     
  20. D-rock

    D-rock Member

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    I know your making a joke but it's funny how words evolve. Before there was a device called a pager or loudspeakers paging people, there were young boys employed in palaces, theaters, etc. to run errands/relay messages called pages. It was converted into a verb when a page summoned you, "being paged".
     

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