Why the Cavaliers Gave Aging Anderson Varejao a $30 Million Contract Extension

Alec Nathan@@AlecBNathanFeatured ColumnistNovember 1, 2014

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With LeBron James in tow, the Cleveland Cavaliers aren't going to be bashful when it comes to signing checks. 

Case in point: The Cavaliers officially inked center Anderson Varejao to a three-year extension worth $30 million on Friday. 

Yahoo Sports' Adrian Wojnarowski passed along the contractual details: 

On the surface, it's admittedly a puzzling agreement. This season, Varejao's base salary sits at $9.7 million, according to ShamSports.com, and the new deal will actually bump his average annual earnings up to $10 million. 

That's a pretty penny to pay for a 32-year-old center with an extensive medical record. 

Varejao has been limited so much, in fact, that he hasn't appeared in more than 65 regular-season games since the 2009-10 season. 

Specifically, Varejao has appeared in just 148 of the Cavaliers' past 314 games (dating back to the start of the 2010-11 season), meaning he's logged minutes in a meager 47.1 percent of the team's regular-season contests during that four-year span. 

But Cavaliers owner Dan Gilbert didn't make a rash decision. In fact, it was a rather cunning move if we consider the moderating variables at play. 

Lynne Sladky/Associated Press

First and foremost, Varejao and James share an incredibly close friendship, one that's been well-documented since James announced his decision to return to Northeast Ohio. 

As the Akron Beacon Journal's Jason Lloyd noted during Cavaliers media day in September, James and Varejao's kinship dates back to the former's first stint in Cleveland: 

Varejao is the lone holdover from James’ first tenure in Cleveland. He is the only one left who remembers the trip to the NBA Finals in 2007 and owning the league’s best record on two other occasions, only to endure the heartbreak of failure.

Part of the reason Varejao survived the roster purging of the last four years is because of his ties to James. The Cavs always believed if James wanted to return, Varejao could be one of the pieces to lure him back. LeBron often has referred to Varejao as one of his all-time favorite teammates and he did so again on Friday.

By extending a monetary olive branch to Varejao, the Cavaliers played things safe. 

Remember how unhappy James was when the Miami Heat made the decision to amnesty Mike Miller prior to the 2013-14 season? Well, the Cavaliers avoided a similar situation by addressing Varejao's contractual situation upfront.  

The other primary factor motivating Gilbert's decision revolved around the impending salary-cap spike. 

Although it remains to be seen just how significant the increase is, the league's new media rights deal is expected to thrust the cap upward of $80 million when the agreement kicks in, according to Grantland's Zach Lowe

With those stratospheric numbers in mind, it's easy to see why Gilbert was so amenable to offering Varejao $10 million annually. 

At that value, Varejao just barely cracks the league's 20-highest base salaries among centers, according to Spotrac, and the team option for year three ensures that the team will be able to maintain financial flexibility down the line. 

Additionally, Gilbert has been very open about his desire to spend beyond the league's luxury-tax threshold in order to assemble a title contender. 

Here's what Gilbert told The Plain Dealer's Chris Haynes regarding that approach: 

That message is unchanged, clearly the cap will be going up in the next couple of years based on the revenues of the league as well, but that message is still there. I think that when you have so much invested, if you want to look at this financially and take away the other stuff, I almost think it's kind of silly when you invest so much into a franchise and have such high costs already, and then at the margin, I know it's a lot of raw dollars when you look at it by itself, but relative to everything that's invested, I was a little bit surprised when our franchise was going to stop right there. To me, it's like getting to the two‑yard line, and okay, we're done now.

While reckless spending beyond the tax line is certainly risky business (see: 2013-14 Brooklyn Nets), inking Varejao to a deal slightly above his true market value right now could result in prognosticators viewing the compensation more favorably when the new salary cap takes effect during the second year of Varejao's new agreement.

So if $30 million is what it takes to preserve LeBron's happiness and ensure the Cavaliers will have a reliable presence patrolling the paint during the team's title chase, Gilbert can't be faulted for generously compensating a franchise staple. 

To that point, Varejao helped fortify the interior effectively in 65 appearances (29 starts) last season.

According to NBA.com, players who were defended by Varejao shot a meager 31 percent from the field, while opponents who matched up against the Brazilian big saw their field-goal percentage decrease by a massive 14.8 percent when compared to their season-long averages. 

A deeper dive into the numbers reveals that centers defended by Varejao also shot 3 percent worse inside of six feet when compared to their season-long averages, according to NBA.com. 

As Cleveland continues to familiarize itself with Kevin Love's strengths and weaknesses as a low-post defender, the Cavaliers can gain a certain level of comfort knowing that they have a rock like Varejao locked up for at least two more years. 

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