NBA
NBA AM: Restricted Free Agency Is Tough
Jeff Hawkins is an award-winning sportswriter with more than four decades in the industry (print and digital media). A freelance writer/stay-at-home dad since 2008, Hawkins started his career with newspaper stints in Michigan, North Carolina, Florida, Upstate New York and Illinois, where he earned the 2004 APSE first-place award for column writing (under 40,000 circulation). As a beat writer, he covered NASCAR Winston Cup events at NHIS (1999-2003), the NHL's Chicago Blackhawks (2003-06) and the NFL's Carolina Panthers (2011-12). Hawkins penned four youth sports books, including a Michael Jordan biography. Hawkins' main hobbies include mountain bike riding, 5k trail runs at the Whitewater Center in Charlotte, N.C., and live music.
All posts by Jeff HawkinsUpdated15 Oct 2021
Restricted Free Agency Is Not Fun: In the NBA, there are a number of processes that are remarkably effective; however, like all systems, there are some processes that are not as effective as they were meant to be. The biggest is restricted free agency. While in essence the idea of a team having the ability to retain a player sounds smart, but what it ends up doing, especially for those who are not max-level players, is create animosity.
Deciding the market value of a player is never easy. For someone like New Orleans big man Anthony Davis, locking him in at a full maximum contract is a no-brainer. But for others, finding the right value without market influence isn’t always easy. In the case of the Cleveland Cavaliers and Tristan Thompson, the Cavs believed they had the framework of a deal when free agency opened in July; however, as the market started to play out it became clear Thompson might have far more value as an unrestricted free agent then he could receive as a restricted free agent.
The problem with restricted free agency for other teams willing to make an offer is that it ties up valuable cap space while a home team decides whether to match. Equally, a team trying to poach a player can only offer a deal that is slightly smaller than the home team, increasing the chances that the home team matches.
In Thompson’s case, a four-year deal would be better for Cleveland than a five-year deal. The smaller raises that another team can offer would also be favorable to the Cavaliers, so why make it easier for the Cavs to keep their guy on a cheaper deal?
This is where the frustration brews on both sides.
The other part of restricted free agency is that some teams just are unwilling to get involved with a player that will likely ultimately be matched. In the case of Thompson, anything short of the maximum likely get matched by the Cavaliers, especially on a four-year deal.
The other part that often gets overlooked is the fact that, historically, players who have taken less than max value in an early deal have often outplayed those deals. The number of players that looked like they signed a high-end deal when they put pen to paper, today look like a bargain especially with the ballooning salary cap.
In the case of Thompson and an $80 million offer, which is what was reported in early July, that seems like a mountain of money that he would be foolish to pass on; however with more than 15 NBA teams projected to have more than $15 million to spend next July, is it smart for Thompson to take what the Cavaliers offer? Or would it be smarter to play out the season, hope that he continues an upward trend and let the market define his value next summer?
Former Detroit Pistons and now Milwaukee Bucks big man Greg Monroe was believed to have been offered $50 to $60 million to remain a Piston last summer. Monroe opted to take the qualifying offer and while he did not receive a full max deal, he did agree to a three-year, $50 million deal with Milwaukee. He didn’t receive a full four-year max deal, but did get max level at $16.5 million this season versus the $12-$13 million per year talked about last summer. Like Jimmy Butler of the Chicago Bulls and Tobias Harris of the Orlando Magic (who turned down extensions last year and became restricted free agents this summer), all passed on early contracts that seem like an incredibly high value only to be rewarded this past summer with much bigger deals.
This is where restricted free agency becomes contentious because in order for a player to truly maximize his earning potential, he almost has to get to unrestricted free agency. The system almost requires it unless it’s a no-brainer at max level money.
For players like Thompson and New Orleans guard Norris Cole to truly maximize their earning potential, both players likely need to pick up their qualifying offer and play out the season this year and let the market determine their true worth.
Every player hopes that their team, at the earliest moment, gives them the largest contract possible – that’s the ideal scenario. However, for a team like Cleveland or New Orleans, they are in essence competing against themselves and their player’s agent in finding the right value. Waiting a year does not necessarily mean a team loses a player, what it does mean is the player can anchor a new contract based on real market conditions. It also gives them the opportunity to choose how their deal is constructed, where options in their deal are placed and what kind of bonuses and incentives are included if they’re not going to get max-level money. As a restricted free agent it’s tough to get those kinds of details included in your deal without the help of another team.
Because Thompson and Cole haven’t reached deals now doesn’t necessarily mean they won’t get new deals with their existing teams next July. There does become some risk that the home team loses their player to unrestricted free agency, but both teams still possess a tool opposing teams cannot offer and that’s the ability to offer more money, larger raises and a longer-term deal. While some of these elements have become less important as more players look to option years to hit free agency again, they still do possess value and ultimately those players can choose to remain where they are going forward.
Looking back to last year after failing to reach a deal, the narrative was Tobias Harris was leaving Orlando or that Jimmy Butler wanted to be somewhere other than Chicago. As free agency played out, both players stayed exactly where they are because their home teams rose to the challenge after understanding what the market would present those players. There’s no doubt that emotion played a factor when both Harris and Butler passed on their offers last summer, but today passing on those offers was a great business decision.
For Thompson and Cole, waiting a year simply gives them more options. There is a little bit of risk with injury, which both players could cover with short-term loss prevention insurance, however the gain on the other side could be far greater especially as other teams can set their values.
It’s likely that both Cole and Thompson sign qualifying offers and play out the season with their current team. That doesn’t necessarily mean the end of the road despite the rhetoric coming from their agent. The agent clearly would like to see a higher level deal done today. That said he has prepared his clients for what’s possible next summer, and those players seem to be on board with waiting things out if their current teams won’t meet the higher price.
Restricted free agency is far from ideal, it creates contention, confusion, a little animosity and a lot of uncertainty; however it’s not the only tool in the toolbox as the home team still has the chance next summer to step up to the plate and consummate a better deal.
Season Previews Are Here: The 2015-16 NBA season is almost here and Basketball Insiders wants to get you ready with our annual team by team Season Previews. We will drop two teams per day from here out, and a bunch of team previews have been posted already. Here they are in case you missed one of them:
Sacramento Kings 2015-16 Preview
Philadelphia 76ers 2015-16 Preview
