[h=1]Best, worst FA deals so far[/h][h=3]The offseason's biggest steals and overpays according to WAR[/h]By Tom Haberstroh | ESPN Insider
After two weeks of free agency, most of the big fish have been reeled in. LeBron James, Carmelo Anthony, Chris Bosh and over 50 other free agents have agreed to deals. Now, it's time to weigh in and see who hauled in a catch -- and who would have been better tossing their bounty back.
Free agency is all about finding value. Finding talent isn't necessarily as important as finding talent at a discount. In a league with a salary cap that means every team has a strict budget, getting bang for your buck is absolutely essential.
To figure out the best and worst deals of free agency thus far, we analyzed all the contracts signed, and compared their average annual salary to the amount expected based on the player's age and 2013-14 production. I based the projected salary on a regression I ran using age and 2014 free-agent contracts.
Production was measured by using a real plus-minus derivative called WAR (wins above replacement), which estimated how many wins a player contributed to his team given how many minutes he played and his impact on both ends of the floor.
With the WAR figures in hand, we then looked at the contracts that were handed out this summer and calculated that teams were paying on average about $1.4 million per WAR on the open market. As you might expect, this pay rate varied according to the age of the player. To state the obvious: Teams will typically shell out more money for 24-year-old Gordon Hayward than 35-year-old Chris Andersen, even though both players delivered similar total production last season (around 5 WAR).
From there, we calculate the difference between the actual contract (AAV) and what we'd expect given the market, age and production (Expected AAV). The difference between these two amounts is what we'll call annual surplus value.
At its core, free agency is a game of improvement. Surplus value is its currency. The best teams with the best front offices routinely find ways to improve their roster without breaking the bank.
So without further ado, let's take a look at the signings that were the biggest steals -- and, on the other side, the players who made off like bandits.
[h=3]Best deals[/h][h=3][/h]<!--INLINE MUG-->
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Patty Mills, San Antonio Spurs | Age: 25
Contract: Three years, $12M | AAV: $4 million
2013-14 value: 5.8 WAR | Expected AAV: $9.8M
Annual surplus value: +$5.8M
The Spurs just keep on Spursing. Mills was the NBA's best backup point guard last season. Playing behind future Hall of Famer Tony Parker, Mills led all Spurs in 3-pointers and averaged 19.5 points per 36 minutes. At just 24 years old, he was a key cog in his team's NBA Finals win.
Teams would normally fight for this sort of young talent. But the Spurs nabbed him for $4 million a year, a rate cheaper than 34-year-old Caron Butler and 32-year-old Chris Kaman received from the Detroit Pistons and Portland Trail Blazers, respectively.
Granted, Mills underwent shoulder surgery, which should knock him out for the first few months of the season. But the Spurs shrewdly took the long view here, locking in a young player to a multiyear contract. Mills is one of the best 3-point shooters in the league. He's entering his prime, and the Spurs got him for 50 percent off Avery Bradley. That's highway robbery.
<!--INLINE MUG-->
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<!--END INLINE MUG-->Dirk Nowitzki, Dallas Mavericks | Age: 36
Contract: Three years, $25M | AAV: $8.3M
2013-14 value: 14.0 WAR | Expected AAV: $13.3M
Annual surplus value: +$5.0M
<OFFER>When the numbers on Nowitzki's contract first came out, teams rolled their eyes. That's when we thought the Mavs were giving Nowitzki -- a likely first-ballot Hall of Famer and one of the best teammates in basketball -- $10 million per. Then we all found out that the actual price was even lower: $8.3 million.</OFFER>
Nowitzki is hardly a spring chicken. But he's still one of the best big men in the league. And this season, he'll make less than Jordan Hill.
This is a coup for the Mavs. According to real plus-minus, just four players delivered more wins last season than Dirk did. For that top-flight production, he'll receive less over the next three seasons combined than Kobe Bryant will make in 2014-15 alone.
That sound you hear is Mark Cuban's CyberDust account buzzing with a barrage of hate messages from around the league.
<!--INLINE MUG-->
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<!--END INLINE MUG-->Channing Frye, Orlando Magic | Age: 31
Contract: Four years, $32M | AAV: $8M
2013-14 value: 10.8 WAR | Expected AAV: $12.2M
Annual surplus value: +$4.2M
Let's just get this out of the way: Frye is an RPM darling. As a smart 3-point shooting big man, Frye is a poster boy of the modern NBA, contributing to the scoreboard in ways that aren't fully captured in the box score. The spacing he affords his teammates by drifting on the perimeter simply can't be quantified by conventional stats.
If a championship contender got Frye at this price, we'd probably hear more about it. But because the basement-dwelling Magic grabbed him at a time when they probably shouldn't be giving big money to veterans, the deal won't get its due. It's a fairly long commitment to a 31-year-old, but at just $8 million a year, this could be the Paul Millsap contract of this offseason.
<!--INLINE MUG-->
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<!--END INLINE MUG-->Isaiah Thomas, Phoenix Suns | Age: 25
Contract: Three years, $21M | AAV: $7M
2013-14 value: 7.2 WAR | Expected AAV: $11.1M
Annual surplus value: +$4.1M
This is Asset Accumulation 101 by Phoenix GM Ryan McDonough. Considering the Suns might have Eric Bledsoe and Goran Dragic in their backcourt, acquiring Thomas might seem like point guard gluttony. But smart teams find talent at discount prices, then deal with fit issues later.
With a career scoring average of 19 points per 36 minutes, Thomas has long been one of the best scoring point guards in the league. The Sacramento Kings were focused on his diminutive stature rather than his immense impact. Sacramento outscored opponents when Thomas was on the floor, and lost by 9.7 points per 100 possessions when he hit the pine, according to NBA.com. The Suns will gladly take him at this price.
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Vince Carter, Memphis Grizzlies | Age: 37
Contract: Three years, $12M | AAV: $4M
2013-14 value: 8.3 WAR | Expected AAV: $7.8M
Annual surplus value: +$3.8M
When it was clear Mike Miller would take his talents to Cleveland, the Grizzlies went out and found a veteran 3-point shooter to replace him. Carter has quietly aged into one of the NBA's most valuable role players on both ends of the floor. The Grizzlies managed to get him at clearance price. Carter is old, but the Grizzlies did their homework on Hall of Fame wings who were still playing at Carter's age and found the drop-off wasn't as steep as one would expect (think Reggie Miller and Grant Hill). Carter was a strong contributor on both ends of the floor as a Mav and will fit seamlessly in Memphis. Jodie Meeks received $7 million more than Carter. I'd rather have Carter and his 8.3 WAR.
[h=3]Worst deals[/h]
<!--INLINE MUG-->
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<!--END INLINE MUG-->Carmelo Anthony, New York Knicks | Age: 30
Contract: Five years, $125M | AAV: $24.8M
Annual surplus value: -$13.9M
There are mixed reviews on this contract. Nate Silver at FiveThirtyEight thinks it doomed the Knicks to mediocrity. Bill Simmons at Grantland called Melo one of the game's most underappreciated players and asserted the Knicks are a solid supporting cast away from a title. However, at this money, RPM disagrees: According to the metrics, Anthony will be one of the overpaid players in the game.
Like most, RPM sees Anthony as a below-average player on the defensive end. As such, he needs to be otherworldly on offense to warrant a $124 million commitment. Anthony's a great scorer, but he rated as only the 18th-best offensive player in the league last season. That's probably a bit unkind, but Melo's age and defensive struggles make this contract a dubious one by any estimation.
<!--INLINE MUG-->
<CENTER></CENTER>
<!--END INLINE MUG-->Chris Bosh, Miami Heat | Age: 30
Contract: Five years, $118M | AAV: $23.6M
2013-14 value: 9.2 WAR | Expected AAV: $11.1M
Annual surplus value: -$12.5M
RPM isn't a huge fan of Bosh's play last season. Still, it'll be fascinating to see how his role change will affect his ranking here. The Heat are banking on the fact that Bosh was marginalized somewhat in his role as a floor-spacing big man and will hope to see his value go up once he becomes a No. 1 option. Bosh has shown he can be a 24-and-10 player in the NBA, but it's uncertain whether he can anchor a top-10 defense while doing it. If he can pull it off, he'll be worth a max contract. But based on last season, he has a lot to prove as he enters his 30s.
<!--INLINE MUG-->
<CENTER></CENTER>
<!--END INLINE MUG-->Gordon Hayward, Utah Jazz | Age: 24
Contract: Four years, $63M | AAV: $15.8M
2013-14 value: 5.0 WAR | Expected AAV: $9.5M
Annual surplus value: -$6.3M
Behold the Salt Lake City premium. Hayward is a fine young player, but the Jazz were forced to overpay in order to lure a player of his caliber to Utah. Charlotte, another small-market squad, forced their hand by handing him a max contract, one of the richest deals of the offseason.
We hear a lot about Hayward's membership in the exclusive 16-5-5 point-rebound-assist club. RPM's more comprehensive viewpoint isn't as bullish on his game. Hayward does have room to grow and he'll need to do so to justify the lofty price tag.
<!--INLINE MUG-->
<CENTER></CENTER>
<!--END INLINE MUG-->Jordan Hill, Los Angeles Lakers | Age: 26
Contract: Two years, $18M | AAV: $9M
2013-14 value: -0.9 WAR | Expected AAV: $3.4M
Annual surplus value: -$5.6M
What are the Lakers doing? Fewer contracts raised more eyebrows around Las Vegas Summer League than this one. The Lakers continue to overvalue their own players. They seem determined to languish in mediocrity.
This is Millsap money, even though Hill's contribution pales in comparison to players of this pay grade. RPM is brutal on Hill, a guy whose sparkly box score numbers were inflated by Mike D'Antoni's system. Making matters worse, Hill's defensive contribution is next to nil. His contract figures to be salary filler before it eventually develops into a trade greaser a year from now.
<!--INLINE MUG-->
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<!--END INLINE MUG-->Caron Butler, Detroit Pistons | Age: 34
Contract: Two years, $9 million | AAV: $4.5M 2013-14 value: -2.1 WAR |
Expected AAV: -$.5M Annual surplus value -$5M
In his first foray into basketball ops decision-making, newly hired head coach and president Stan Van Gundy made acquiring shooting a top priority. After snagging Jodie Meeks at a lofty price of $19 million, he signed Butler to midlevel-type money. Unfortunately, RPM sees him as a washed-up 34-year-old.
Butler shot 40 percent from deep last season. But his defensive inability erased any value he might have provided as a floor stretcher. All indications point to him as a positive influence in a young locker room. It's clear Van Gundy is taking care of one of his guys; he coached Butler in Miami a decade ago. But he's a much different player now.
After two weeks of free agency, most of the big fish have been reeled in. LeBron James, Carmelo Anthony, Chris Bosh and over 50 other free agents have agreed to deals. Now, it's time to weigh in and see who hauled in a catch -- and who would have been better tossing their bounty back.
Free agency is all about finding value. Finding talent isn't necessarily as important as finding talent at a discount. In a league with a salary cap that means every team has a strict budget, getting bang for your buck is absolutely essential.
To figure out the best and worst deals of free agency thus far, we analyzed all the contracts signed, and compared their average annual salary to the amount expected based on the player's age and 2013-14 production. I based the projected salary on a regression I ran using age and 2014 free-agent contracts.
Production was measured by using a real plus-minus derivative called WAR (wins above replacement), which estimated how many wins a player contributed to his team given how many minutes he played and his impact on both ends of the floor.
With the WAR figures in hand, we then looked at the contracts that were handed out this summer and calculated that teams were paying on average about $1.4 million per WAR on the open market. As you might expect, this pay rate varied according to the age of the player. To state the obvious: Teams will typically shell out more money for 24-year-old Gordon Hayward than 35-year-old Chris Andersen, even though both players delivered similar total production last season (around 5 WAR).
From there, we calculate the difference between the actual contract (AAV) and what we'd expect given the market, age and production (Expected AAV). The difference between these two amounts is what we'll call annual surplus value.
At its core, free agency is a game of improvement. Surplus value is its currency. The best teams with the best front offices routinely find ways to improve their roster without breaking the bank.
So without further ado, let's take a look at the signings that were the biggest steals -- and, on the other side, the players who made off like bandits.
[h=3]Best deals[/h][h=3][/h]<!--INLINE MUG-->
<CENTER></CENTER>
<!--END INLINE MUG-->
Patty Mills, San Antonio Spurs | Age: 25
Contract: Three years, $12M | AAV: $4 million
2013-14 value: 5.8 WAR | Expected AAV: $9.8M
Annual surplus value: +$5.8M
The Spurs just keep on Spursing. Mills was the NBA's best backup point guard last season. Playing behind future Hall of Famer Tony Parker, Mills led all Spurs in 3-pointers and averaged 19.5 points per 36 minutes. At just 24 years old, he was a key cog in his team's NBA Finals win.
Teams would normally fight for this sort of young talent. But the Spurs nabbed him for $4 million a year, a rate cheaper than 34-year-old Caron Butler and 32-year-old Chris Kaman received from the Detroit Pistons and Portland Trail Blazers, respectively.
Granted, Mills underwent shoulder surgery, which should knock him out for the first few months of the season. But the Spurs shrewdly took the long view here, locking in a young player to a multiyear contract. Mills is one of the best 3-point shooters in the league. He's entering his prime, and the Spurs got him for 50 percent off Avery Bradley. That's highway robbery.
<!--INLINE MUG-->
<CENTER></CENTER>
<!--END INLINE MUG-->Dirk Nowitzki, Dallas Mavericks | Age: 36
Contract: Three years, $25M | AAV: $8.3M
2013-14 value: 14.0 WAR | Expected AAV: $13.3M
Annual surplus value: +$5.0M
<OFFER>When the numbers on Nowitzki's contract first came out, teams rolled their eyes. That's when we thought the Mavs were giving Nowitzki -- a likely first-ballot Hall of Famer and one of the best teammates in basketball -- $10 million per. Then we all found out that the actual price was even lower: $8.3 million.</OFFER>
Nowitzki is hardly a spring chicken. But he's still one of the best big men in the league. And this season, he'll make less than Jordan Hill.
This is a coup for the Mavs. According to real plus-minus, just four players delivered more wins last season than Dirk did. For that top-flight production, he'll receive less over the next three seasons combined than Kobe Bryant will make in 2014-15 alone.
That sound you hear is Mark Cuban's CyberDust account buzzing with a barrage of hate messages from around the league.
<!--INLINE MUG-->
<CENTER></CENTER>
<!--END INLINE MUG-->Channing Frye, Orlando Magic | Age: 31
Contract: Four years, $32M | AAV: $8M
2013-14 value: 10.8 WAR | Expected AAV: $12.2M
Annual surplus value: +$4.2M
Let's just get this out of the way: Frye is an RPM darling. As a smart 3-point shooting big man, Frye is a poster boy of the modern NBA, contributing to the scoreboard in ways that aren't fully captured in the box score. The spacing he affords his teammates by drifting on the perimeter simply can't be quantified by conventional stats.
If a championship contender got Frye at this price, we'd probably hear more about it. But because the basement-dwelling Magic grabbed him at a time when they probably shouldn't be giving big money to veterans, the deal won't get its due. It's a fairly long commitment to a 31-year-old, but at just $8 million a year, this could be the Paul Millsap contract of this offseason.
<!--INLINE MUG-->
<CENTER></CENTER>
<!--END INLINE MUG-->Isaiah Thomas, Phoenix Suns | Age: 25
Contract: Three years, $21M | AAV: $7M
2013-14 value: 7.2 WAR | Expected AAV: $11.1M
Annual surplus value: +$4.1M
This is Asset Accumulation 101 by Phoenix GM Ryan McDonough. Considering the Suns might have Eric Bledsoe and Goran Dragic in their backcourt, acquiring Thomas might seem like point guard gluttony. But smart teams find talent at discount prices, then deal with fit issues later.
With a career scoring average of 19 points per 36 minutes, Thomas has long been one of the best scoring point guards in the league. The Sacramento Kings were focused on his diminutive stature rather than his immense impact. Sacramento outscored opponents when Thomas was on the floor, and lost by 9.7 points per 100 possessions when he hit the pine, according to NBA.com. The Suns will gladly take him at this price.
<!--INLINE MUG-->
<CENTER></CENTER>
<!--END INLINE MUG-->
Vince Carter, Memphis Grizzlies | Age: 37
Contract: Three years, $12M | AAV: $4M
2013-14 value: 8.3 WAR | Expected AAV: $7.8M
Annual surplus value: +$3.8M
When it was clear Mike Miller would take his talents to Cleveland, the Grizzlies went out and found a veteran 3-point shooter to replace him. Carter has quietly aged into one of the NBA's most valuable role players on both ends of the floor. The Grizzlies managed to get him at clearance price. Carter is old, but the Grizzlies did their homework on Hall of Fame wings who were still playing at Carter's age and found the drop-off wasn't as steep as one would expect (think Reggie Miller and Grant Hill). Carter was a strong contributor on both ends of the floor as a Mav and will fit seamlessly in Memphis. Jodie Meeks received $7 million more than Carter. I'd rather have Carter and his 8.3 WAR.
[h=3]Worst deals[/h]
<!--INLINE MUG-->
<CENTER></CENTER>
<!--END INLINE MUG-->Carmelo Anthony, New York Knicks | Age: 30
Contract: Five years, $125M | AAV: $24.8M
Annual surplus value: -$13.9M
There are mixed reviews on this contract. Nate Silver at FiveThirtyEight thinks it doomed the Knicks to mediocrity. Bill Simmons at Grantland called Melo one of the game's most underappreciated players and asserted the Knicks are a solid supporting cast away from a title. However, at this money, RPM disagrees: According to the metrics, Anthony will be one of the overpaid players in the game.
Like most, RPM sees Anthony as a below-average player on the defensive end. As such, he needs to be otherworldly on offense to warrant a $124 million commitment. Anthony's a great scorer, but he rated as only the 18th-best offensive player in the league last season. That's probably a bit unkind, but Melo's age and defensive struggles make this contract a dubious one by any estimation.
<!--INLINE MUG-->
<CENTER></CENTER>
<!--END INLINE MUG-->Chris Bosh, Miami Heat | Age: 30
Contract: Five years, $118M | AAV: $23.6M
2013-14 value: 9.2 WAR | Expected AAV: $11.1M
Annual surplus value: -$12.5M
RPM isn't a huge fan of Bosh's play last season. Still, it'll be fascinating to see how his role change will affect his ranking here. The Heat are banking on the fact that Bosh was marginalized somewhat in his role as a floor-spacing big man and will hope to see his value go up once he becomes a No. 1 option. Bosh has shown he can be a 24-and-10 player in the NBA, but it's uncertain whether he can anchor a top-10 defense while doing it. If he can pull it off, he'll be worth a max contract. But based on last season, he has a lot to prove as he enters his 30s.
<!--INLINE MUG-->
<CENTER></CENTER>
<!--END INLINE MUG-->Gordon Hayward, Utah Jazz | Age: 24
Contract: Four years, $63M | AAV: $15.8M
2013-14 value: 5.0 WAR | Expected AAV: $9.5M
Annual surplus value: -$6.3M
Behold the Salt Lake City premium. Hayward is a fine young player, but the Jazz were forced to overpay in order to lure a player of his caliber to Utah. Charlotte, another small-market squad, forced their hand by handing him a max contract, one of the richest deals of the offseason.
We hear a lot about Hayward's membership in the exclusive 16-5-5 point-rebound-assist club. RPM's more comprehensive viewpoint isn't as bullish on his game. Hayward does have room to grow and he'll need to do so to justify the lofty price tag.
<!--INLINE MUG-->
<CENTER></CENTER>
<!--END INLINE MUG-->Jordan Hill, Los Angeles Lakers | Age: 26
Contract: Two years, $18M | AAV: $9M
2013-14 value: -0.9 WAR | Expected AAV: $3.4M
Annual surplus value: -$5.6M
What are the Lakers doing? Fewer contracts raised more eyebrows around Las Vegas Summer League than this one. The Lakers continue to overvalue their own players. They seem determined to languish in mediocrity.
This is Millsap money, even though Hill's contribution pales in comparison to players of this pay grade. RPM is brutal on Hill, a guy whose sparkly box score numbers were inflated by Mike D'Antoni's system. Making matters worse, Hill's defensive contribution is next to nil. His contract figures to be salary filler before it eventually develops into a trade greaser a year from now.
<!--INLINE MUG-->
<CENTER></CENTER>
<!--END INLINE MUG-->Caron Butler, Detroit Pistons | Age: 34
Contract: Two years, $9 million | AAV: $4.5M 2013-14 value: -2.1 WAR |
Expected AAV: -$.5M Annual surplus value -$5M
In his first foray into basketball ops decision-making, newly hired head coach and president Stan Van Gundy made acquiring shooting a top priority. After snagging Jodie Meeks at a lofty price of $19 million, he signed Butler to midlevel-type money. Unfortunately, RPM sees him as a washed-up 34-year-old.
Butler shot 40 percent from deep last season. But his defensive inability erased any value he might have provided as a floor stretcher. All indications point to him as a positive influence in a young locker room. It's clear Van Gundy is taking care of one of his guys; he coached Butler in Miami a decade ago. But he's a much different player now.
