[The Vertical] Front-Office Insider: What’s a max player?

Front-Office Insider: What’s a max player?

By Bobby Marks of The Vertical
Yahoo Sports
http://sports.yahoo.com/news/front-office-insider--what-s-a-max-player-143955332.html


With the salary cap set to rise to $92 million this summer, the term max contract has been used loosely to describe the value of a certain level of player.

The max salary is a three-tiered salary structure that rewards a player with the maximum salary allowed based on years of service. For 2016-17, a max salary is projected to start at $21.3 million for a player with zero to six years of service, $25.5 million for a player with seven to nine years of service, and $30.2 million for a player with 10-plus years of service.

Since the summer of 2013, 24 players have received max contracts.

Of those 24 players – including Cleveland Cavaliers franchise player LeBron James and teammate Kyrie Irving – 19 have played in at least one All-Star Game.

The five max players who have not earned All-Star honors: Gordon Hayward, Enes Kanter, DeAndre Jordan, Wes Matthews and Greg Monroe. Jordan, however, earned first-team All-NBA honors this season.

Hayward and Kanter were restricted free agents who had offer sheets matched by Utah and Oklahoma City, respectively. The Mavericks upped their offer to Wes Matthews once DeAndre Jordan spurned them to return to Los Angeles. Monroe’s contract with Milwaukee, although a max deal, is only a three-year contract with a player option for the third year.


The Vertical talked with various league executives and identified 11 players – six of whom have not played in an All-Star Game – who could earn a max contract.

• Restricted free agents: Bradley Beal, Andre Drummond, Harrison Barnes and Evan Fournier.

• Players with full Bird rights: Mike Conley, DeMar DeRozan, Al Horford, Nicolas Batum and Kevin Durant.

• Cap-space candidates: Hassan Whiteside and LeBron James. (Cleveland could use early Bird rights with James, but would have to sign him to a two-year contract).



THE ORIGINAL MAX PLAYER
The definition of a true max player is always an interesting discussion.

“A franchise-level player who is the first- or second-best player on your team,” is how one league executive described a max player before the salary cap was slated to escalate. “A player that you want with the ball in their hands at the end of the game, someone you would want to take the last shot with the game on the line.”

One general manager said a franchise player could also be one who changes the landscape on the defensive end, such as Jordan or Whiteside.

Oddly, the Golden State Warriors don’t have a max-contract player on their roster.


FACTORS THAT DICTATE A MAX SALARY
The CBA
Teams can exceed the salary cap to sign a free agent who has full Bird rights.

The downside, however, is that if teams don’t retain a player using Bird rights they usually don’t have the cap space to replace him in free agency.
The Cavaliers last season were at a clear disadvantage when it came to Kevin Love’s free agency. Cleveland, already over the salary cap, would have only had the mid-level exception to use had they let Love go.

Retaining Love might have seemed like an overpay, but Cleveland now has a $21 million trade chip if they were to move him in the future.

The same could be said about Jordan and the Clippers last July.

Before free agency started, the Clippers’ only option was to bring back Jordan at a max salary. Los Angeles was already over the salary cap, and if he had signed elsewhere the Clippers would have had only the minimum to replace him.

Supply and demand
Similar to the housing market, free agency is dictated by supply and demand.

Teams with needs at certain positions often dictate the salaries in free agency.

In the Grizzlies’ situation, they will hold little leverage when it comes to Conley.

With six teams in need of a starting point guard, Memphis will likely have to overpay for Conley – perhaps $25.5 million annually – if it wants to keep him.

Unlike Atlanta, which has backup Dennis Schroder waiting in the wings, Memphis does not have that luxury.

Restricted free agents
Restricted free agency gives teams a clear advantage in retaining their own players.

In the cases of Barnes and Beal, the best solution for the Warriors and Wizards, respectively, would be to retain both players even if that means overpaying at the $21.3 million projected max.
Both teams can also take the approach Oklahoma City did last season with Kanter.

The Thunder let the market dictate Kanter’s value and matched the Trail Blazers’ offer sheet but with less years and a lower percentage increase per year.

Teams that retain their own players through restricted free agency can then use that player as a trade chip going forward. Trading a player still on his rookie contract brings back little value to teams.

The salary-cap floor
The bottom three teams in the league – Brooklyn, Philadelphia and the Lakers – will have the most cap space this summer.

But even with close to $50 million in space, all three teams would likely have to overpay a non-max player to get him to join a rebuilding franchise.

Each team also will need to spend enough to reach the salary cap floor of $82.8 million.

One GM told The Vertical that some teams are exploring the idea of signing a player to a large one-year contract above market rate, even if the salary comes in at the max.

For a team such as Utah, which has $24 million in cap space and 15 players under contract (including its potential first-round pick), that could be the approach to take.

The list of 11 projected max players could certainly grown if teams with cap space take this approach.


THE NEW TV MONEY
The idea of a max player being a team’s first- or second-best performer still carries weight, however, with the salary cap rising to $92 million this summer and a projected $107 million in 2017-18, teams no longer look at salaries simply through the lens of a max deal. They now consider the percentage of the value of the contract in context to the cap.

There are two ways to look at player salaries: money out of pocket from teams and the percentage that counts against the salary cap.

For example, Love signed his max contract last summer that will count $21.1 million against the cap for the 2016-17 season. However, he will only count 22.9 percent against a $92 million cap compared to 30 percent under the $70 million cap in 2015-16. This would be comparable to the Cavaliers signing Love next season for $16.1 million. One could argue that’s his true value.

When Matthews and Kanter signed their max contracts, they were viewed as overpays. But both players’ $17.5 million salaries next season will only count 19 percent against the cap (compared to 23.4 percent in 2015-16). Both players’ true evaluations reflect more of a $13 million player in 2016-17.

Barnes would be the Warriors’ highest-paid player next season if he were to sign for the max salary of $21.3 million. Barnes’ projected salary percentage would be comparable to teammate Klay Thompson’s salary percentage on the $15.5 million he made under a $70 million cap this past season. The true value of Barnes’ contract his first year would actually be worth $16.3 million using a $70 million cap.

This gap in value will become greater when looking at the 2017-18 season, when the cap is projected to reach $107 million.

General managers believe teams that signed players to max contracts in 2015 will have a clear advantage in 2017, when the cap rises to $107 million.

The $18.8 million All-Star Kawhi Leonard will earn in the third year of the max contract he signed in 2015 will count 17 percent against the Spurs’ cap, compared to 24 percent if the cap had risen to only $80 million in 2017-18. Although Leonard’s $18.8 million will count against the cap, his percentage value would be $14 million.

The free-agent salaries signed this July will certainly send sticker shock across the NBA.

The market and new TV money will certainly play a factor, but remember that max salaries are simply a percentage of the salary cap and not a reflection of the performance level or player labels teams once used.

 

Every year people get surprised at the crazy money that gets thrown around. The article is just a reminder that the money being spent isn't always tied to production, there is the open market supply/demand that is key too.

 

Honestly, the names on the list didn't surprise me, but Fournier? I raised an eyebrow.

 

So, Wizards going to offer the MAX to Noah, eh?