The 10 Best 2012-13 Contracts

The other day I did the ten worst contracts of the season. It was a fairly big hit, and as usual, not everyone agreed with my picks. I expect more of the same today, as I pick the ten best.

I think the GMs negotiated well on these deals.

For this list, I'm ignoring salaries that I think are "fair". These are contracts where the owners aren't getting a bad deal, but also are not getting a bargain. Some examples of contracts that I think are fair:

  • Spencer Hawes: He was terrible for a few years, but great last year. If last year really was transformative, they have a huge bargain, but only for two years, so he'll become a very expensive UFA during his prime. On the other hand, if last year was just an outlier, their downside is capped, so this contract is "fair". One could also put Brandon Roy in this category. Might be great, might bust, only two years, whatever.
  • Marcus Camby, Jason Kidd, Ray Allen: These are still great win producers, but they will only play limited minutes. At their age, the end could come at any minute, so they aren't strictly bargains even at their moderate prices; the cheaper price is a fair trade off for the risk of age/injury ending things.
  • Kevin Garnett, Steve Nash, Tim Duncan, Gerald Wallace: These are similar to the above, but a lot more expensive. I don't think any of these are bad at all, and in year one they are likely to be underpaid, but given the ages and lengths of contracts involved, I wouldn't really call them bargains either. Although if any of them does turn into a bargain, it will probably be Nash, who's game is least dependent on his body and who is least vulnerable to injury due to playstyle.
  • Nic Batum, George Hill, Roy Hibbert, Lou Williams, etc: good but expensive players. Not bargains.

Also, like the worst contracts. Rookies don't count. Anthony Davis will probably have the best contract in the NBA next season, but that's just the nature of the draft.

10) Lavoy Allen, 2 years, $6 million

Allen looks like he'll be a great, young, underpaid player, but I could probably argue that Allen's contract belongs in the "worst contracts" post. The only reason Lavoy Allen is making $3 million instead of about $800k is because Philadelphia only signed him to a one year contract after they drafted him. NBA Teams shoot themselves in the feet constantly with their crazy conservative strategy with 2nd round picks.

Hey NBA GMs!

Here's a friendly PSA. The pay structure for 2nd round draft picks is really favorable to you. You should probably sign every 2nd round pick to the maximum-length four years, with a team option for the 3rd and 4th years. That $800k or so in year 2 is not going to break your bank if they don't work out. Let's face it, if you don't spend it on these guys, you were going to waste that money on some washed-up vet like Jermaine O'Neal or Raja Bell anyway, right?

Trying to limit your downside on 2nd round picks with these short contracts is very bad business -- owners who do this are trying to save money by cutting the wrong corners. These players are very cheap, so owners should be doing everything in their power to maximize the upside, and ignore the downside.

9) Greg Stiemsma, 1 year, $2.5 million

Which brings us to Greg Stiensma. Boston made a similar mistake. He had a very good rookie campaign for Boston, and he's pretty good, and $2.5 million for a "pretty good" big man, even in a reserve role, is a huge bargain. But Boston couldn't match because of some stuff probably only Larry Coon understands, and Boston was only in this position because Stiemsma only had a one year deal. Why didn't they offer Stiemsma a multiyear deal with a team option? Did they think Stiemsma, who was desperate to crack into the NBA, would have hesitated to sign anything that Boston put in front of him? Minnesota is profiting from Boston's mistake and it's a great contract.

The only downside to this signing is that I'm probably going to misspell his name as often as I did Wally Szczerbiak's.

8) Elton Brand, 1 year, $2.1 million

It's almost tempting to make amnesty picks not count, but from Dallas's perspective, they are paying $2.1 million for an above-average big. And they were not the only team that could have placed a bid. That makes this a steal and a great contract in my book. The fact that the bidding didn't get higher here is weird. I imagine the GMs fixated on the fact that Brand is kind of old, and is overpaid. Neither is relevant; it's a one-year deal, and whoever got him wouldn't be the one overpaying him. The fact is, Brand is still good at basketball. He keeps his turnovers low, he blocks shots, and he's still a reasonably efficient scorer and rebounder. That's worth $6-$8 million at least in today's NBA. I wouldn't want Brand on a long-term contract, but at one year, this is a very good deal.

7) Ronnie Brewer, 1 year, $800k or so

This would be much higher on the list if it were a multi-year deal. Brewer's not a great shooter, but that's ok because unlike some other bad shooters, he doesn't shoot a lot. He's a great rebounder and gets lots of steals, while avoiding turnovers and personal fouls. He's worth what Fields is getting and more, and Chicago is silly for letting him go. Supposedly he turned down more money and the promise of more minutes elsewhere, which makes him a bit of an idiot as far as I'm concerned, but I'm probably just bitter he didn't want to play in Minnesota. Imagine him next to Stiemsma, AK and Rubio. That team would be a defensive monster.

6) JaVale McGee, 4 years $44 million

McGee gets a bad rap. I think the problem is that when he screws up, he screws up big. Dunks that rattle off the back of the rim and fly into the backcourt. He leads the league in goaltends by a huge margin. And he's not exactly smart about how he handles the media either. But it gets lost in that shuffle that JaVale produces. He rebounds well and he blocks a lot of shots, and isn't terrible at anything else but free throw shooting. He's an above average center, and he's young. This combination is usually very expensive. L.A. gave Bynum about $16 million per year way back when he hadn't yet done squat and had trouble playing 3 games in a row without rolling an ankle -- and nobody blinked. New Jersey gave Brook Lopez the worst contract of the summer and a lot of folks just shrug and say that New Jersey "had to do it". And some folks in Denver are up in arms about giving an above-average young center $11 million? Head-scratching. This is a good deal. People need to learn to look beyond the fact that McGee does a lot of boneheaded stuff.

5) Andrei Kirilenko, 2 years, $20 million

When Kirilenko last played in the NBA, he was an underrated superstar. He's a little older now, but by no means ancient, and even if he's declined he's likely still a very good player. When you consider that he replaces an awful Wes Johnson, and thus becomes a player who transforms Minnesota from "meh" to "good playoff team," this becomes a great deal. When you add to the fact that it's only two years, so Minnesota won't be stuck overpaying an old player, it looks even better.

4) Jeremy Lin, 3 years, $25 million

A lot has been said about this. But let's note that 3 years at about $8 million per year would be a reasonable contract for an above-average point guard with a lot of international marketing potential. But the contract is actually better than this because it essentially defers $7 million dollars to the final year. All of the journalists who keep saying that it "doesn't matter" how the money is distributed have clearly never taken a finance course. The first rule of finance is that unless you live in a deflationary economy, money now is worth more than money later. You can even quantify how much using a net present value approach.

But there are further ramifications. Many (including me) have brought up that if Lin isn't all that great, at least his big expiring contract will have value to some team that wants to take a big chunk of its books. If this is true, and the Rockets can trade Lin in his final year, this will end up meaning that the Rockets deferred about $7 million in payments, but then ended up forcing some other team foot the bill (or a big chunk of it)! I realize that the Rockets will have to take back salary in any deal, but one can only presume that any salary that they take back in such a hypothetical trade is for a player that they actually want to pay (otherwise, why make the trade, obviously).

The other scenario is that Linsanity continues, in which case Houston won't really be all that upset to pay the bill when its due.

3) Ersan Ilyasova, 5 years, $45 million

Beastly rebounder who has improved every year in the league so far gets locked up for $9 million per year all the way through his prime years? Sure! I'm not sure what else there is to say about this contract. It's great!

2) Omer Asik, 3 years, $25 million

The same principles that apply to Lin's contract also apply to Asik's, but there's an important difference, and that's that at $8 million per year, Asik is probably not fairly paid, he's underpaid. As a fantastic rebounder and shot-blocker, he's well worth $10+ million in his own right. In fact, if his production holds steady with increased minutes, he probably won't even be overpaid in that "poison pill" year. So Houston will be paying him $5 million or so, while earning interest on the rest until 2014/15, for a beastly defensive center who's only 26 right now. And once again, they might get someone else to foot the bill!

As you can tell, I disagree with Dre about Daryl Morey -- I think he's a pretty savvy GM.

1) Ryan Anderson, 4 years $36 million

This contract is so good I wrote a whole article about it, and coined a fallacy after this player (the Ryan Anderson Fallacy refers to a situation in which a reviewer calls a contract "bad" when in fact that contract is really good). Twitter kind of exploded with "$9 million for Ryan Anderson? Really?" comments. Yeah, really, why would you want to pay $9 million for a 6'10" great offensive rebounder and 3-point shooter who doesn't turn the ball over? Pff, what do you need guys like that for? I mean, unless you're trying to win basketball games, those kinds of guys are useless! If the value of a win is about $1.47 million dollars per win, Anderson is probably going to be "worth" somewhere north of $18  million dollars per year, meaning he's in the "superstar" category (guys who are underpaid even at the max salary), and New Orleans is getting him for $9 million. That's a crazy contract.
Who'd I miss?