Forget Everything You Know About Free Agency, Because It's All About to Change

Howard Beck@@HowardBeckNBA Senior WriterJuly 1, 2015

Ben Margot/AP Images

The NBA free-agent market generally moves to a steady, predictable beat—a metronome powered by a cash register. Players hit the market. The drawer opens. The drawer empties. The drawer closes.

It all happens in fairly orderly fashion, with few surprises or major tremors ("The Decision" notwithstanding).

All of that is about to change, rather spectacularly.

Indeed, everything you know, or thought you knew—about free agency, player values, payroll management and roster building, all of the logic and methodology internalized over years of studious observation—is practically obsolete.

Billions of dollars in new television revenue are about to flood the NBA economy, warping it beyond recognition. The salary cap will leap by $22 million in 2016, a 32.6 percent increase, and by another $19 million the following year.

Twenty-seven teams could be flush with cap room next summer—an unprecedented event in the modern NBA.

Forget order. Forget logic. Forget predictability.

"It'll just be total chaos," said one agent with a major firm. "Total pandemonium."

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Though the cap spike (and presumably, the pandemonium) is a year away, the effects will be seen much sooner—as in, today, as the 2015 free-agency period opens.

No one knows exactly what to expect, but everyone seems certain it will not be business as usual.

DeAndre Jordan reportedly is interested in signing a short-term deal to allow him to re-enter free agency under an exploding salary cap.
DeAndre Jordan reportedly is interested in signing a short-term deal to allow him to re-enter free agency under an exploding salary cap.Stephen Dunn/Getty Images

Dozens of players could opt for one- or two-year deals, to position themselves for bigger paydays in 2016 and 2017. Teams might willfully overpay players, with the knowledge that cap inflation will make today's "ludicrous" contract look like tomorrow's bargain. The entire NBA economy could be skewed, a year early.

And some existing bargains will become downright cheap.

The NBA's rookie scale, which is set in advance, will not keep pace with the salary cap, making first-round picks even cheaper, relative to total payroll—and thus more valuable than ever.

The same applies to the minimum player salary, the mid-level exception and the biannual exception, all of which had their values fixed by the 2011 collective bargaining agreement.

"There's no question, the norm is not the norm anymore," said Mark Bartelstein, the chief executive of Priority Sports, which represents more than 30 NBA players. "Everything is going to change."

About 170 players will hit free agency at midnight July 1, although no deals can be signed until July 9, per league rules. Will we see a flurry of one-year deals? It would make sense, for players across the pay spectrum. Consider the following examples:

• LeBron James can earn a maximum salary of about $22 million this summer, or $93.9 million over a four-year deal. But if he re-enters free agency in 2016 (a near certainty), his new starting salary would be $29.3 million, or $125.1 million over four years.

CLEVELAND, OH - MARCH 7: Timofey Mozgov #20 of the Cleveland Cavaliers and Brandan Wright #32 of the Phoenix Suns fight for a rebound during the second half at Quicken Loans Arena on March 7, 2015 in Cleveland, Ohio. The Cavaliers defeated the Suns 89-79.
Jason Miller/Getty Images

• Brandan Wright, a defensive-minded journeyman center, might command a starting salary of $10 million this summer. But in a cash-flooded 2016 market, he might get $13 million or more.

• Glen "Big Baby" Davis, a backup center, would earn $1.36 million next season if he signed a minimum-salary deal, as he did this past season. But in 2016? With hundreds of millions available in the market? Davis might not have to settle for the minimum. Indeed, it's conceivable that, starting in 2016, the minimum salary will be rendered temporarily irrelevant.

In fact, the most frequently used exceptions—the mid-level, the mini mid-level, the biannual—could nearly disappear for a year or two. Cap exceptions are, by definition, used by teams that are over the salary cap. When a team ducks under the cap, it loses the exceptions.

Nearly every team could be under the cap in 2016. And many, or even most, could be flush with cap room in 2017, when the cap spikes again.

With so much money available, players won't be forced to accept cap exceptions. That means even the lowliest role players will have incentive this summer to sign short contracts.

The conventional wisdom among team executives is that will indeed be the prevailing trend. Bartelstein said that's an overstatement.

"This is not a game of monopoly or poker," he said. "You're dealing with people's lives, people's careers and their families, their futures. Each player has got his own, unique circumstances. … Nobody's got a crystal ball, and things can change dramatically from year to year in a player's career."

Consider the case of DeMarre Carroll, a Bartelstein client who plays for the Atlanta Hawks. Carroll just had a breakout season, emerging as an elite defender and three-point shooter. He is in his prime. He will be highly coveted this summer. And he has until now—hitting $2.4 million this past season—earned a modest salary by NBA standards.

WASHINGTON, DC - MAY 15:  DeMarre Carroll #5 of the Atlanta Hawks drives to the basket against Paul Pierce #34 of the Washington Wizards in Game Six of the Eastern Conference Semifinals during the 2015 NBA Playoffs on May 15, 2015 at the Verizon Center in
Scott Cunningham/Getty Images

Team executives say Carroll could command $12 million a year this summer. Based on the new inflation, that figure could leap to $16 million or more in 2016. But as a player who has never enjoyed a major payday and is about to turn 29, Carroll might be better off taking a long-term deal now.

"If you're DeMarre Carroll, you're probably going for the money," said an agent with another major firm. "You're going to say, 'Screw it, I'm 29, I haven't made any money, I want to know I'm making $48 million.' "

The same agent said he expected fewer four- and five-year deals this summer, in favor of one- and two-year deals.

Age and injuries are a constant threat to player value and long-term security. And those factors will likely play a major role in every deliberation this summer, as players, their families and their agents weigh the possibilities.

For a superstar like James, whose market value will never dip, barring a catastrophic injury, the decision to take short-term deals is fairly simple.

"For everyone else, you have to go through a very intense analysis," Bartelstein said.

Those calculations—the balance of short-term risks against long-term rewards, the gamble on one's own health and talent and market value—could have a major impact on the top free agents this summer.

The class includes LaMarcus Aldridge, Kevin Love, Marc Gasol, Kawhi Leonard, Jimmy Butler, Draymond Green, DeAndre Jordan, Paul Millsap and Goran Dragic.

SACRAMENTO, CA - MARCH 1: LaMarcus Aldridge #12 of the Portland Trail Blazers looks on during the game against the Sacramento Kings on March 1, 2015 at Sleep Train Arena in Sacramento, California. NOTE TO USER: User expressly acknowledges and agrees that,
Rocky Widner/Getty Images

The younger stars—Leonard, Green and Butler—are all restricted free agents seeking their first big payday, and might prefer longer deals. Jordan, just 26, has become one of the NBA's top defenders, and his value is only climbing. With time on his side, and one big contract already banked (a $43 million deal signed in 2011), he might be a candidate to take a one-year deal.

At the other end of the spectrum: Brook Lopez of the Brooklyn Nets. Lopez might be the best scoring center in the NBA. But he has had multiple surgeries on his right foot, clouding his future. He is certain to opt for long-term security this summer, whether he stays in Brooklyn or signs elsewhere.

It's conceivable that teams will be more willing to spend, or even overspend, this summer, knowing that the cap—and the luxury-tax threshold—will leap next year. A team with talent and cap room, such as Milwaukee, might want to flex its spending power now, before the entire league is flush with cap dollars.

But the real fun begins in 2016, when the revenue from a $24 billion broadcast-rights deal starts spilling into NBA coffers. The salary cap will shoot from $67 million to $89 million, and even some of the NBA's most profligate spenders (hello, Brooklyn) will have cap room, and a chance to start over.

And the 2016 free-agent class will be stellar, led by Kevin Durant and potentially including Damian Lillard, Andre Drummond, Dwight Howard, Al Horford, Joakim Noah, Mike Conley and, of course, everyone who signs a one-year deal this summer.

NEW YORK, NY - FEBRUARY 15:  Kevin Durant #35 of the Oklahoma City Thunder and the Western Conference looks on during the 2015 NBA All-Star Game at Madison Square Garden on February 15, 2015 in New York City.  NOTE TO USER: User expressly acknowledges and
Elsa/Getty Images

As of now, 27 teams—all but Golden State, Cleveland and Chicago—are projected to have significant cap room in 2016, enough to sign at least one "max" player. This is a very big deal.

As recently as the summer of 2009, only three teams had cap room—any cap room—per cap expert Mark Deeks. In most years, maybe four to six teams have had room. That has been the norm for at least two decades.

Twenty-seven teams with cap room? It's unprecedented, and it's impossible to predict the effects.

"For the first time, we will have some real competition in the marketplace," Bartelstein said. "There will be a lot more competition, which is a good thing for the players."

Players will have more choices, in addition to more dollars coming their way. Teams may have to work harder than ever to lure top free agents. And small-market teams might feel more insecure than ever.

When the Charlotte Hornets are one of the few teams with cap room, it's easier to land an impact free agent like Al Jefferson (2013) or Lance Stephenson (2014). But when nearly everyone has cap room? How does Indiana compete with New York, or Minnesota with Los Angeles?

"It benefits the big markets if they're good teams," said Bobby Marks, the former Nets assistant general manager.

Mitch Kupchak has the Lakers positioned to add a number of the NBA's top free agents over the next two summers.
Mitch Kupchak has the Lakers positioned to add a number of the NBA's top free agents over the next two summers.Nick Ut/Associated Press

Using the Clippers as an example, Marks said, "If they're a playoff team and Minnesota is not, of course they have the advantage, because it's a big market and it's L.A."

But if the teams are about even competitively, the market size "is not as much an advantage as it once was," Marks said.

"The trend has been toward players going to teams that have been in the playoffs and have a chance to win," he said. "I mean, New York is expensive. You have to take that into account, also."

Agents and players will cheer the coming chaos and uncertainty. General managers will salivate over the chance to buy shiny, new players. Owners will surely cringe at the rapidly rising salaries—another reason to fear a labor stoppage in 2017.

Assuming no changes to the system, a star player (or several) could cross the $33 million salary plateau in 2017—a figure no player has reached since Michael Jordan in 1997-98, before maximum salaries were instituted. By 2019, a player could cross the $40 million mark.

And in 2017, some NBA star—possibly James or Durant—could sign the league's first $200 million contract, based on current projections.

At the other end of the spectrum, NBA rookies will soon become even greater bargains than they are today. 

Consider: This year's No. 1 pick, Karl-Anthony Towns, is set to make $4.75 million next season under the rookie scale—about 7 percent of the salary cap. But his second-year salary, $4.97 million, would represent just 5.6 percent of the cap, and his third-year salary, just 4.8 percent.

MINNEAPOLIS, MN - June 26:  First overall pick in the 2015 NBA Draft Karl-Anthony Towns of the Minnesota Timberwolves is introduced to the media on June 26, 2015 at the Minnesota Timberwolves and Lynx Courts at Mayo Clinic Square in Minneapolis, Minnesota
David Sherman/Getty Images

The main drawback of this fertile new NBA economy? It may soon be impossible to know how to value anyone. Today's reasonably priced, $5 million backup point guard might cost $8 million in 2016. That $10 million-a-year rebounding specialist? He might soon command $15 million.

And every current contract will be seen in a new light. Carmelo Anthony's $22.9 million salary? Tough, under a $67 million cap. But his $26.2 million in 2017? Not so bad under a $108 million cap.

Even Deron Williams' bloated contract (worth another $43 million over the next two years) won't look quite as awful. Still an albatross, to be sure, but a less onerous albatross, as he goes from 31 percent of the Nets' cap next season to 25 percent in 2016-17.

"The whole salary structure of the league is going to change, to a degree," Bartelstein said.

A rapidly rising cap could mean more superteams, with three or even four star players uniting.

Or perhaps the added spending power, and the increased competition for stars, could lead to a better distribution of talent.

Everyone might get overpaid. We might not know how to tell.

We are entering uncharted territory, the great unknown.

One thing is certain: The norm is not the norm anymore.

Howard Beck covers the NBA for Bleacher Report and is a co-host of NBA Sunday Tip, 9-11 a.m. ET on SiriusXM Bleacher Report Radio. Follow him on Twitter, @HowardBeck.


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