NBA executives, analytics and the man himself agree: LeBron James is underpaid, as our Tom Haberstroh explored in Tuesday's Per Diem.
He's not alone. The NBA's restrictions on individual contracts mean some players are prohibited from securing their full value on the open market.
WHAT'S THE MAX?
It's important to note there's not one "max" contract. Instead, the most players can make depends on their experience in the league. The max for players with at least 10 years of experience (19.1 million this season) is much higher than the same figure for players with seven to nine years in the league ($16.4 million). There's the same gap for players in their first six seasons ($13.7 million), though the NBA evened things up for young stars like Kevin Durant and Derrick Rose by making certain players eligible to get up to 30 percent while extending their rookie contracts.
Advanced metrics can help us determine just how large this pool is. My wins above replacement metric is ideal for this task because it focuses on how much value a player provides his team on the court, which is a result of productivity and playing time.
Say you're the GM of a team with cap space this summer. How much will you have to pay to add a win to next season's total? Well, some players are better values than others, but on average teams paid about $1.5 million above the minimum salary for each WARP the previous season during free agency last summer. In 2011 after the lockout, that figure was slightly higher -- nearly $1.8 million. Combining the two markets gives a value of $1.6 million for each additional win.
Based on that figure and WARP projections for the full 2012-13 season, many players in the league (38 in all) are worth more than the lowest max level of $13.7 million. Let's focus instead on players worth more than $16.4 million, since that is now the maximum amount for many star players. That yields a group of 19 players -- basically somewhere between the number of players on All-NBA teams (15) and on the All-Star teams (24). They can further be divided into a few categories.
Name your price
LeBron James ($40.5 million on-court value)
Kevin Durant ($36.9 million on-court value)
Having James or Durant on your roster basically guarantees a playoff team, so it's no surprise that they're valued at significant percentages of the cap (70 percent for James; nearly 65 percent for Durant).
Let's say Durant and James were free agents next summer and the NBA removed restrictions on individual salaries. In that scenario, assuming a $60 million cap, the most another team could offer would be $54 million by clearing all its contracts and having only 12 minimum-salary spots counting against the cap. Would someone be willing to do that for four years to build around Durant or James? Possibly.
Good values at the max
Russell Westbrook ($25.5 million on-court value)
Chris Paul ($24.8 million on-court value)
James Harden ($22.6 million on-court value)
Stephen Curry ($21.5 million on-court value)
Blake Griffin ($20.7 million on-court value)
Tim Duncan ($20.3 million on-court value)
Beyond James and Durant, six players project as being worth more than $20 million this season, a mark just three players in the league surpass in terms of actual salary. Besides Curry, whose omission from the All-Star team looks bad in WARP's eyes, the rest of this group is made up of surefire All-NBA picks.
This group includes four players who either signed extensions last year or are in the first season of extensions. Because of his ankle woes, Curry agreed to a four-year, $44 million extension last fall that will be a great deal for the Warriors. Westbrook left some money on the table by signing an extension starting at 25 percent of the cap rather than holding out for a deal starting at 30 percent, like Durant and Rose received. Westbrook would have been eligible for the special 30 percent contract after making the All-NBA team a second time last season.
Griffin bumped his extension up from 25 percent to 30 percent after being voted by fans to start the All-Star Game a second time. He owes the fans a big thank-you -- assuming a $60 million cap, that translates into an extra $17.3 million over the five-year deal. Harden could technically still qualify, but only by winning MVP.
The one max player who is actually overpaid
Kobe Bryant ($19.8 million on-court value)
For the most part, the NBA's max contracts mean star players are underpaid. The exception is Bryant with a salary of $27.8 million, who is unique because of his longevity as a star. Annual raises on the contract he originally signed in the summer of 2004, plus an extension that kicked in last season, mean Bryant makes nearly $7 million more than anyone else in the league. So while he's still more valuable than the "maximum" salary for players of his experience, Bryant is slightly overpaid in terms of his on-the-court exploits. Of course, the Lakers would still be far over the luxury tax if Bryant was making "only" $20 million, and the Buss family is happy to pay a little extra for all the other value Bryant brings the franchise.
Dwyane Wade ($19.9 million on-court value)
Carmelo Anthony ($18.5 million on-court value)
Dwight Howard ($18.0 million on-court value)
Paul Pierce ($16.5 million on-court value)
Four veteran stars are paid approximately what they're worth. Pierce, with a salary of $16.5 million, is the closest to a perfect match of anyone on the entire list. Howard has been a max bargain in the past, and may be again in the future, but he hasn't quite lived up to his contract this season following back surgery.
Joakim Noah ($18.8 million on-court value)
Paul George ($17.7 million on-court value)
Marc Gasol ($16.8 million on-court value)
George, a first-time All-Star, is one of two players on this list who will still be on their rookie contracts next season (more on the other in a second). As for Gasol and Noah, both are nice values on long-term deals. Gasol signed for slightly less than the max as a restricted free agent after the lockout, and Noah is in the second year of a five-year, $60 million deal that pays him less than Hedo Turkoglu this season.
Ryan Anderson ($18.8 million on-court value)
Nicolas Batum ($18.3 million on-court value)
Of the 19 players valued at more than the max, 14 are All-Stars. Three others (Curry, Gasol and Pierce) were prominent omissions. That leaves two oddball players, both of whom rate better by WARP than other all-in-one metrics. Anderson and Batum have in common that they both shoot a lot of 3s (Anderson leads the NBA in attempts and Batum is fourth), which WARP rewards because of the value of floor spacing. Both are enjoying strong seasons, and Anderson in particular was a great buy for the Hornets last summer (he'll make $34 million over the next four years, slightly less than Jeff Green), but they're not really max guys.
The NBA's other best value
Kyrie Irving ($18.9 million on-court value)
Besides elite superstars, the other group prevented by the collective bargaining agreement from exploiting its full value on the open market is players on rookie contracts. Irving, who was recently picked as an All-Star during his second season, will make just $12.6 million total in 2013-14 and 2014-15 before he is eligible for a lucrative extension. By the end of his four-year rookie contract, Irving's production could easily be worth $20 million a year. After Durant and James, Irving is the NBA's best value.
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