Neither player is overpaid. Here's why:
If Paul George were to hit FA, any team with the cap space would offer him a max deal because that is his market value!
If DeMar DeRozan were to hit FA, teams would offer him anywhere from 8M per year (OJ Mayo's deal) to 11M per year (Tyreke Evans' deal) because his market value lies somewhere in that range.
If Rudy Gay were to hit FA, teams would offer him anywhere from 12M per year (Iguodala's deal) to a max deal, because his market value lies somewhere in that range.
You're not going to secure players for less than market value unless there are other strong factors besides money that would make them want to play for you (see Miami's big 3 taking paycuts to form a super-team). This is how the NBA works.
Players are only "overpaid" when you pay them more than any other team would realistically offer. If Landry Fields had hit FA in 2012, he would've been offered anywhere from probably 3M per year (similar to what a guy like Alonzo Gee got). So since we gave him double that, he is quite obviously overpaid.
Usually the only way to get an "underpaid" player is to either draft them (rookie-scale deal) or extend the player before they realize their full potential (Lowry, Amir, Rondo, Steph Curry are all examples of this).
That's a document that uses Win Shares to evaluate a player's worth. According to that DeMar was worth 9.5M last season, which is what he will be making on his new contract (so he was underpaid last year). So even with no improvement he would be worth his deal. No improvement from a 23 year old is unlikely though, so I'd say he ends up being slightly underpaid.
Gay was only worth 8M last year by the same metric, although last year was a severely off year for him based on his career stats. He'd likely be worth closer to the 12M amount that guys like Paul George and Paul Pierce are at in this spreadsheet.
*Note: if you want to compare players from different teams you need to use the adj cap salary, unless the teams are at the same or similar salary total.
Last edited by Xixak; Fri Jul 26th, 2013 at 09:44 AM.
That google doc does a funny thing - it applies the team's current salary, so the amount one's teammates are making directly impacts the value of a player. That's no good.
Simply put, you can look at worth in WS or in WS/48. In WS, there are 41 wins for each team to go around, that's 1230 wins. Meanwhile, total salary last year was 2.109 B - that works out to 1.715 M per win. Based on that, DeRozan's 4.7 wins were worth about 8.1 M.
The third bold is where you begin to hit on it yourself. As you say, if one team pays more than every other team in the league would realistically offer, then a player is overpaid. But what if two teams would pay more than the other twenty-eight would offer? Or three teams more than the other twenty-seven (etc. etc.)? On the one hand, you could say that they've created the market for whatever that player should be payed. But you could also argue that they've created a false demand figure based on their own stupidity, or desperation, or whatever it is that made them bid higher than many other teams would have.
So, sure, Demar could have been payed 8 to 11 mil on the open market this summer. But I seriously doubt that every team with cap space would have made an offer that high because you can easily make an argument that a player of his skill set doesn't deserve that money. For example, the Spurs would never, ever pay him that much money. If you look at his contract from the perspective of that one franchise, then he's overpaid.
So now the discussion has moved to stats/$, or more number crunching. The basketball world has been turned over to accountants!
We're talking about supply, demand and market here.
Any team that wants/needs DeMar is going to have to pay 8-11M for him in free agency, because that is his market value. So at 9M he is not overpaid, he is paid the amount that is required to acquire his services.
In the third bold I probably should've removed the word "any" and said "most" other teams would realistically offer. That would be to account for teams with boneheaded GMs that overpay everyone. The point is still the same.
So, for Colangelo, he believes that DeRozan is worth $9.5M per season. Just because that's his "market value" doesn't mean he's not overpaid, it all depends on who you are when you look at the contract.
Personally, I think his contract is fine.
last year. It's basically DD with lower usage and slightly higher fg%. 8-11 mill is a fair assessment for a player like Demar. That's what the market dictates.
The question should be, did BC pay a million more than he should have for the comfort of signing him? At the time who was he bidding against? I felt during his tenure BC constantly overpaid by either small amounts (Amir-- no one knew what he would become, I felt his contract was about a mill too much a year) to Andrea (The size, and length of that contract never made sense to me.) Signing a player to an extension should be a cap saving move in my opinion, otherwise, might as well let the market dictate things. If that meant paying Demar more now so be it, but it looks like Demar got the same amount of money he would have gotten either way. So, why the rush?
"I won't shoot 5 for 19 again...." - DeFrozen (in theaters now)
2nd bold: The mistake you're making is assuming that he has a single market value. It isn't as simple as "well, what did he actually get paid?" If 15 GMs would pay him 9 mil, but the other 15 say "*uck that, I'm not paying 9 mil for a 2 guard who can't shoot or defend - I'll pay 5 mil for that", then he has two market values. For the first 15 GMs, his market value is 9 mil, and he is correctly paid. For the second 15 GMs, his value (what they would pay for his services) is 5 mil, and if he's signed to a contract of 9 mil then he's overpaid. This is how a player can conceivably be both correctly paid and overpaid at the same time.
3rd bold: You're assuming that most teams would pay Demar this much, but you have no way to prove this. Personally, I think about half of the league would, and the other half wouldn't.
First of all, he DOES have a single market value because there is only one market. The teams that would only offer 5M are offering UNDER market value because they have NO chance of actually signing the player. That's like saying someone who would only pay $20 for an IPad determines its value. No, what determines its value are the people willing to pay the price that its being sold for. This is true for stocks, most goods and athlete contracts.
If HALF the league would pay him what we did or more, then it made sense to extend him and actually SAVED us money. If he would've tested the market he would've been offered more than what we gave him (using what you JUST said) and we'd have to pony up even more dollars to re-sign him.
R.c. Buford would never pay demar 9 mil, regardless of what his cap situation is and regardless of what kind of assets he has at that moment. Neither would Sam Presti, or Daryl Morey, or Pat Riley. Based on their idea of what a player at that position should contribute relative to their contract and its effect on the salary cap, demar is overpaid at nine mil. Hopefully MU thinks this way as well and finds a way to ship him off to one of the fool GMs/organizations.
Maybe a better example is a limited edition car being auctioned off. The highest bidder sets the value not people that don't want the item lmao.
And what you said about Buford, Presti, Riley and Morey is an assumption.
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