Stray Shots: The DeMar DeRozan Bad Contract Extension Edition
The rookie deal non-max extension is one of the least efficient/riskiest contracts in the NBA. It comes when a player is still very young, at a stage when it’s possible to believe he might advance more in the next 12 months than he did in the previous 36 combined — even if history says that sort of leap at age 23 or 24 is unlikely. If a team passes on an extension and that growth comes right away, the team will have cost itself something like $10 million or $20 million by failing to lock up the player ahead of restricted free agency. Saving that kind of money has real roster-building impact; Boston would be short a Jason Terry or Courtney Lee right now had it not locked up Rajon Rondo at an absurdly cheap price at the extension buzzer in 2009.
And this round of extensions came at an especially tricky period. As I wrote in evaluating the Ty Lawson/Stephen Curry deals, at least a dozen teams are set to have something very close to max-level cap room this summer in a market that will be almost entirely lacking in star free agents — assuming the Lakers, Sixers, and Clippers lock up Dwight Howard, Andrew Bynum, and Chris Paul, respectively. Cap holds and roster moves might take a couple of teams out of that max group, and only a few of them will have a glaring need at the relevant position — the wing, in the case of DeRozan and the Raptors. But as many NBA executives have told me, it takes only one sucker/asshole/fool to blow up a player’s market value. The Mavericks, Cavaliers, Pistons, Bucks, Magic, and Kings are just a few of the teams that could have major cap room and holes at the wing if things break in a particular direction, and though not all of those teams are going to like DeRozan, it takes only one.
All of this was at work in Toronto’s decision to grant DeRozan an absurd extension, worth nearly $40 million over four years, that will put them over the cap this summer and take them out of the max-level cap derby in the summer of 2014. The trope is that “advanced statistics” frown on DeRozan, but the truth is that very few statistics of any kind paint him as a productive player. He’s a low-percentage shooter who can’t shoot 3s, and thus can’t space the floor on the wing. He has never shown even average creativity or timing as a passer, and Dwane Casey cut down on DeRozan’s pick-and-roll usage as soon as he got the Raptors head-coaching job. He’s a minus defender both on the ball (opponents shot better than 50 percent on isolation attempts last season, according to Synergy Sports) and not a particularly attentive helper off it. He’s only 23, but DeRozan has never had a league-average PER, and the chances he lives up to this deal are slim.
That said, the Raptors can at least hang their hat on a few things here:
• DeRozan has gotten to the foul line a fair bit, and that can be an indicator of future scoring prowess.
• Toronto will only be a hair above the cap this summer — and maybe right at it — meaning they’ll still have the full mid-level exception to use without any danger of approaching the tax line.
• DeRozan seems to be coming into his own as a bully of smaller players, something that might serve him well on the block against shooting guards.
• The four-year length leaves the five-year designated-player tag in the bag for Jonas Valanciunas.
• The Raptors cap sheet is clean enough that they could have something like $8 million to $10 million in cap space in the summer of 2014, even including Kyle Lowry’s cap hold. (Note: This assumes they renounce Ed Davis’s cap hold and that the salary cap levels grow by about 4 percent per year.)
• Toronto doesn’t have much (i.e., any) record of drawing max-level free agents, so although max-level cap room is useful for other purposes — including in-season trades — it has different levels of utility to different teams.
• Doing nothing is often not a realistic option for particular executives and ownership groups, even if it should be. There is an alternative path here: See how DeRozan performs this year, and if he’s shaky again with Terrence Ross waiting for more playing time, just let the guy walk and watch another sucker overpay. Teams are just loath to go that route, having invested years in asset development.
It’s not a catastrophic deal, since Toronto isn’t contending anytime soon regardless, and the cap sheet is almost spotless after 2014-15. But it’s a bad contract.
Again: How many teams set to have near max-level room this summer have a need for a $10 million point guard? Perhaps Sacramento, though Tyreke Evans’s cap hold will tie up most of their space at first. The Magic have needs everywhere, even if they did give Jameer Nelson a puzzling new deal over the summer. Maybe the Bucks, though they have to spend the first days of free agency waiting on Brandon Jennings. The Jazz are without a long-term answer at the position, and though they have a pile of giant outgoing free agents to deal with first, they stand as a clear potential point guard suitor. Atlanta will have a bundle of cap room — and the restricted free agency of Jeff Teague. The Hornets are out there if the Eric Gordon–Austin Rivers combo-guard extravaganza goes horribly, though that seems an unlikely destination. Dallas will always be lurking, though it will be interesting to see what happens if Darren Collison turns out to be a home run.
It takes only one, though; someone among this group would have come at Holiday with a $10 million-per-year offer, given a likely productive campaign this season. This is an overpay based on proven production, but Holiday is only 22, and unlike DeRozan, there are some hard data points we can point to in his favor. Holiday is a tenacious on-ball defender, and though he can get lost off the ball on the occasional smart cut, he should develop into one of the best defenders at his position. He has also been an above-average 3-point shooter his entire career, and though he takes 3s at a less-than-desired volume, that accuracy is a really good sign.
The knocks are real: He ranks near the bottom of the starting point guard pile in drives to the rim, assists, free throws earned, and generating close shots for his teammates. He was one of several ball handlers at the helm of a Philly offense that collapsed last season and relied almost completely on inefficient mid-range jumpers. And the Sixers have never trusted him to take the reins of the offense. He is prone to dribbling around the perimeter without going anywhere before settling for a pull-up 20-footer.
But Holiday is young, aggressive, and feisty, and he has played well in the postseason. He has registered a modest uptick in assists whenever Andre Iguodala has hit the bench, per NBA.com, and he should develop into a better creator given more experience and responsibility.
The interesting implications come with Evan Turner. If Philadelphia re-signs Andrew Bynum to a max deal with a year one salary of $17.7 million, they’ll be over the cap this coming summer and have something like $50 million in committed salary to seven players (including draft pick estimates) for 2014-15. That would put them about $10 million under the projected cap, but it includes nothing for Turner, a restricted free agent after next season. Turner’s cap hold will soak up all that projected cap room, and re-signing him to an extension of this size will commit Philadelphia to this core through 2015-16, after which Thad Young’s deal expires.
Is this core good enough for that kind of commitment? Or has Philadelphia already signaled its long-term preference for Holiday over Turner?
Between this $9.5 million deal and the $8.3 million annual contract Houston gave Omer Asik, it looks like smart NBA teams are beginning to recognize the importance of truly elite defensive players — even ones with limited offensive skills. Gibson is already 27, so it’s fair to assume he might have peaked already, even if he has shown a more diverse offensive skill set in fits and starts. Chicago relied on him much more than usual after both Derrick Rose and Joakim Noah got injured in the first round last season, and though the Bulls’ offense failed in that series, Gibson didn’t embarrass himself taking turns as a pseudo first option.
He’ll have to develop into a better offensive player, especially if this move results in the amnesty or trade of the wildly unpopular screaming monster known as Carlos Boozer. (We’ll get to this shortly.) Gibson has flashed a bunch of useful offensive skills, but only one of them — offensive rebounding — has been a consistent part of his game. He’s gotten about half his offense from cuts and offensive boards (thanks, Derrick), and big guys who shoot less than 50 percent without generating a lot of free throws are not all that useful offensively. Gibson will have to get better as a pick-and-roll player and passer in order for the Noah/Gibson front line to provide enough offense and spacing.
But, holy hell, is this guy a wrecker on the other end. He’s a tenacious worker who understands Tom Thibodeau’s strong-side schemes, rotates on time, blocks shots, and is generally in the right place. He can be vulnerable in the post against bigger scorers, but don’t even bother going one-on-one against the guy; opponents are 40-of-171 (23 percent) in isolation attempts against Gibson over the last two seasons, per Synergy Sports. Those quick feet are enormously valuable against LeBron James and other fast/big ball handlers, both after switches and in straight-up one-on-one coverage.
And the Bulls have remained impenetrable defensively even when Gibson has played alongside a front-line partner other than Asik; Chicago allowed 86.4 points per 100 possessions when Gibson and Asik played together last season, and 91.6 when Gibson played without Asik, per NBA.com. That 91.6 number, accumulated in 537 minutes, was still a full four points per 100 possessions stingier than the league’s best defense last season.
The popular take on this will be that Jerry Reinsdorf’s next move is to cut Boozer with the amnesty provision. Maybe. Gibson’s deal leaves Chicago with about $75 million committed to nine players next season, including Boozer, their first-round pick, and a $1 million buyout for Rip Hamilton, who may be gone before then. Fielding a team with even minimum deals will take them up to at least $77 million or $78 million in payroll, meaning they’d be looking at an additional $6 million to $10 million in luxury tax payments — depending on their other roster moves and how far the tax line jumps from its $70.3 million level.
Total bill in this scenario: something like $85-$87 million.
Slice away Boozer’s $15.3 million salary, and they’re looking at about $60 million for eight players — and a final payroll around $65 million, with no tax penalties. But the Bulls would still have to pay Boozer, meaning their final bill in this amnesty scenario would be around $80 million — only $5 million or so less than in the non-amnesty scenario. Dumping Boozer would also free up the full mid-level exception again, but spending that on actual players would wipe the savings away totally.
Look, $5 million is a lot of money to Reinsdorf, who has always considered the Bulls his low-rent toy and who low-balled poor Marquis Teague after the draft. But paying Boozer a huge percentage of the remaining $32.1 million in salary after this season while Boozer plays for another team is also pretty distasteful. Toss in the fact that Chicago might need Boozer’s offense if it has any interest in contending next season, when Rose is healthy, and it’s possible to see Reinsdorf holding off on the amnesty trigger for at least one more year.
Cutting Boozer in the summer of 2014 could leave Chicago with a useful amount of cap space, assuming they re-sign Luol Deng to a much cheaper deal. Nikola Mirotic, a Bulls draft pick currently working as one of the best scoring big men in Europe, is a wild card, depending on when Chicago will bring him over and how much they think he’ll be able to produce right away.
In any case: With this extension, Chicago has locked in a game-changing defender in his prime at a decent price. That’s a good thing.