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Thread: Is over paying players strategy or stupidity?

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    Raptors Republic All-Star Mediumcore's Avatar
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    Default Is over paying players strategy or stupidity?

    When the New Jersey Nets gave Brook Lopez a max contract earlier this summer the thought that first came to my mind was, "what were they thinking"? Then the Lakers went out and signed both Steve Nash and Dwight Howard and basically laughed in the face of the luxury tax. That got me thinking did New Jersey do something stupid or implement a truly great stategy in over paying for Lopez? Do they see teams like the Lakers, and Knicks and say to themselves, "the only way to attract big time free agents is by over paying everyone"? If free agents now look at New Jersey as a destination where they will get paid over their value wouldn't New Jersey begin to reap the same luxury the Lakers' and Knicks' have enjoyed for years now and have their choice of free agents each summer? They may not land the mega stars right away, but as their team gets better by signing second tier stars, the first tier stars will eventually see them as more attractive destination.

    My apologies if this thread is more of a basketball thread than one specifically about the Raptors which I suppose it should be considering the forum.

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    Raptors Republic All-Star Craiger's Avatar
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    is overpaying strategy or stupidity? Answer: both

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    Raptors Republic Starter hotfuzz's Avatar
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    I wonder if a hard salary cap would work. But then again, MLB has no salary cap and we've seen about 9 different winners in the past 13 years.

    Wasn't the recent agreement supposed to help out small-market teams?
    "Duh! Winning"
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    Raptors Republic All-Star Craiger's Avatar
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    Quote hotfuzz wrote: View Post
    I wonder if a hard salary cap would work. But then again, MLB has no salary cap and we've seen about 9 different winners in the past 13 years.

    Wasn't the recent agreement supposed to help out small-market teams?
    Its important to note the significant difference between sports. Namely how the NBA is so one or two player driven, while in baseball having the best single player on the planet won't guarantee anything.

    Even with a hard cap whatever team had Lebron James, Durant, Dwight etc. would still be the contending teams year in and year out, only replaced by the next age superstars in the future.

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    Super Moderator thead's Avatar
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    for the majority of teams I think you will see less and less paying for potential. Under the current CBA, MOST teams will not take risks.

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    Raptors Republic Superstar enlightenment's Avatar
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    Quote thead wrote: View Post
    for the majority of teams I think you will see less and less paying for potential. Under the current CBA, MOST teams will not take risks.
    Which will make teams that WILL overpay THAT much more attractive for free agents (Lakers)

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    Raptors Republic All-Star Mediumcore's Avatar
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    Quote Craiger wrote: View Post
    is overpaying strategy or stupidity? Answer: both
    LOL, so true.

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    Raptors Republic All-Star Mediumcore's Avatar
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    Quote enlightenment wrote: View Post
    Which will make teams that WILL overpay THAT much more attractive for free agents (Lakers)
    Unless apparently if you're the Raptors. Hedo, Amir, Fields all have been given contracts which most would consider over their value. But you're spot on because both New Jersey and L.A. by grossly exceeding the luxury tax have made it public that they are not bound to one max contract player.

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    Raptors Republic Icon mcHAPPY's Avatar
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    Quote hotfuzz wrote: View Post
    I wonder if a hard salary cap would work. But then again, MLB has no salary cap and we've seen about 9 different winners in the past 13 years.

    Wasn't the recent agreement supposed to help out small-market teams?
    The recent agreement also introduced a new revenue sharing system which is not going to start until this winter, I believe. The lakers, for example, are paying something like $43 or $49M tax bill in February/March based on last season's payroll.

    I do think the new agreement is going to do more to 'even' the playing field but it will never make things equal.

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    Super Moderator thead's Avatar
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    Quote Matt52 wrote: View Post
    The recent agreement also introduced a new revenue sharing system which is not going to start until this winter, I believe. The lakers, for example, are paying something like $43 or $49M tax bill in February/March based on last season's payroll.

    I do think the new agreement is going to do more to 'even' the playing field but it will never make things equal.
    I hope so...my young nephew is into basketball and his favorite team is the Lakers. He was saying the Raptors suck. I showed him that at the Lakers bought and paid for every win they got by paying 40 million more a year for them. If every team was hardcapped at say..75 million that would make things interesting.

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    Once all the new provisions kick in, I think we'll see a climate where it becomes much more difficult for teams to live above the cap year after year. As such, we'll see 'destination' teams blowing it up and rebuilding, rather than trying to retool a roster on the fly. I think LA is leaving themselves that out, and I think Dallas is eyeing a similar plan. And that's essentially what Brooklyn did over the last couple years. But it's also a strategy where if you blow it up and put it back together wrong, you may be stuck for years. With only the $3 million MLE to work with, no sign-and-trades, and the threat of other teams poaching your young RFAs with offer sheets, managing a roster above the apron gets very complicated. Not to mention expensive: once the repeater rate kicks in, a team with an $85 million payroll is going to be paying $65 million in taxes. Which is another reason why it makes sense to blow it up, get down under the tax threshold for a couple years, and reset your repeater rate.

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    Raptors Republic Superstar Puffer's Avatar
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    Quote Matt52 wrote: View Post
    The recent agreement also introduced a new revenue sharing system which is not going to start until this winter, I believe....
    So, the shared revenue would allow you to overpay, and you could pay off the Luxury tax with money you recieved as part of the revenue sharing?

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    Raptors Republic Icon mcHAPPY's Avatar
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    Quote Puffer wrote: View Post
    So, the shared revenue would allow you to overpay, and you could pay off the Luxury tax with money you recieved as part of the revenue sharing?
    I can't remember all the particulars of it.... sorry.

    My comment was more directed at hotfuzz's comment about smaller market teams in the new CBA.

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    Quote Puffer wrote: View Post
    So, the shared revenue would allow you to overpay, and you could pay off the Luxury tax with money you recieved as part of the revenue sharing?
    My understanding is that is technically possible, but extremely unlikely. For starters, your revenue needs to be less than (roughly) league-average in order to receive any a net positive in revenue-sharing. As well, you need to be in a market with fewer than 2.5 million TV households to receive anything. And whatever you receive in revenue sharing cannot put your bottom line over $10 million in profit.
    So if you were a small-market team, you could intentionally plan to spend yourself into a tax position, lose money as an organization, and make up the difference with revenue sharing. But this is a very dangerous game: if you lock yourself into big long-term contracts on the assumption that revenue sharing will bail you out, and then for some reason you become ineligible for revenue sharing (and there are a lot of disqualifiers), then you've made yourself into a perpetual money-loser, not to mention that you'll have little flexibility to get out of the situation.

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    Raptors Republic Superstar Puffer's Avatar
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    Quote octothorp wrote: View Post
    ...But this is a very dangerous game: if you lock yourself into big long-term contracts on the assumption that revenue sharing will bail you out, and then for some reason you become ineligible for revenue sharing (and there are a lot of disqualifiers), then you've made yourself into a perpetual money-loser, not to mention that you'll have little flexibility to get out of the situation.
    Damn!

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    Quote Mediumcore wrote: View Post
    When the New Jersey Nets gave Brook Lopez a max contract earlier this summer the thought that first came to my mind was, "what were they thinking"?
    I was surprised at the Nets giving the max to Brook Lopez and a 2 year, 24 millions contract to Kris Hunphries. That;s a lot if money tied up to two very bad PnR defenders and bad defenders in general.

    It will be interesting to see how the Nets defensive scheme change throughout the season. They do have two big wings - Gerald Wallace and Joe Johnson - who can defend and are considered smart players. I am not sure anyone can cover for two slow footed big men who are also hesitant at rotating.

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    Raptors Republic Starter torch19's Avatar
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    I don't think the Nets' owner is concerned about paying taxes.

    Owner to GM: "Here's money. Get me wins. Or you die"
    “I don’t create controversies. They’re there long before I open my mouth. I just bring them to your attention.”

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    Raptors Republic Veteran Nilanka's Avatar
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    It's possible that Brooklyn is simply banking on Lopez (who's finally healthy again) returning to his 2nd year form, which was basically 19 pts, 9 rebounds and 2 blocks per game. He may not be Dwight Howard dominant, but those are some pretty solid numbers.
    "I don't lie. I willfully participate in a campaign of misinformation." - Fox Mulder

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    Raptors Republic All-Star Mediumcore's Avatar
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    Quote Nilanka wrote: View Post
    It's possible that Brooklyn is simply banking on Lopez (who's finally healthy again) returning to his 2nd year form, which was basically 19 pts, 9 rebounds and 2 blocks per game. He may not be Dwight Howard dominant, but those are some pretty solid numbers.
    That might be the case, but keep in mind they also have given a max contract out to D. Will and Joe Johnson is also on a max. contract. By giving one to Lopez as well they are making it public that they have no problem with paying anyone of interest to them and salary caps or luxury taxes are not a concern to them. That's got to be attractive to guys like Josh Smith whom are hitting the market this summer. You could very well see a starting line up where each player is on a max. contract in the next few years.

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    Super Moderator CalgaryRapsFan's Avatar
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    Quote Mediumcore wrote: View Post
    That might be the case, but keep in mind they also have given a max contract out to D. Will and Joe Johnson is also on a max. contract. By giving one to Lopez as well they are making it public that they have no problem with paying anyone of interest to them and salary caps or luxury taxes are not a concern to them. That's got to be attractive to guys like Josh Smith whom are hitting the market this summer. You could very well see a starting line up where each player is on a max. contract in the next few years.
    How will Brooklyn be able to sign any free agents to big money contracts, given that they're well over the cap? Under the new CBA, they won't even be able to S&T for such players. I think Brooklyn is going to underachieve and then be stuck with some bad contracts for older players, at least for a couple seasons.

    They've got $60M+ tied up in 4 players for the next 4 years ($60.4M / $64.8M / $65.7M / $72.7M): DWill (28), JJ (29), Wallace (30) and Lopez (24) (plus Humphries at $12M more for the next 2 years). They won't be signing anybody new and won't be S&T'ing for any big players, unless one of these 5 players is going the other way... and good luck finding a taker for Humphries or Lopez!
    Last edited by CalgaryRapsFan; Mon Oct 29th, 2012 at 01:01 PM.

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