Note: this is NOT a forum to discuss whether or not Kevin Love is actually worth the maximum. Whether he is or isn't is irrelevant to this discussion, which is the very point I am trying to makeSo I came across this nugget today on ESPN Rumors:
Kevin Love will become a restricted free agent after next season, unless he signs an extension between July 1 and Oct. 31. Charley Walters of the Pioneer Press reports the Wolves don't want Love on the market in 2012 and plan to offer him a max contract.
Walters writes: "Love can look forward to a contract extension offer of five years in the $70 million range once a new NBA labor deal is reached, a little birdie says. The NBA's collective bargaining agreement expires June 30. Love, 22, can become a restricted free agent after next season. The Wolves have no intention of letting him get that far."
The new collective bargaining agreement, as Walters points out, will determine the length and amount that max contracts will be worth. There is a very good chance that the actual max offer will be less than the five-year, $70 million projection.
Either way, the Wolves will do whatever it takes to keep Love in Minnesota long-term.
-- Nick Borges
Now, regardless of the player, Isn't it just bad business to offer a maximum contract, whether the player is worth it or not, after a player's 3rd year? As far as I can see, by doing so, the team only adds risk and gains no benefit.
Quick Refresher:
-After year 3, teams and players may exclusively negotiate an extension up to the max.
-After year 4 a player is a restricted free agent, and thus can be offered a max contract by any team with cap room; however, if the player signs, the original team can match the contract dollar-for-dollar and force the player to stay.
-After year 5 (the qualifying offer year) a player is an unrestricted free agent and can sign with any team (with cap space) up to the max; however, the original team can offer better raises (I believe 10.5% compared to 8%) and one extra guaranteed year.
I fully understand the year 3 negotiating window as a tool to benefit both sides. The player gets security a year earlier (though no extra money any earlier) and the team can often times lock up a player based on year 3 production and not based on year 4 production/a market inflated by other teams bidding. This is what the C's and Rondo did to nail Rondo to a 5 yr 55 mil contract. Win-win for player/team. The team is gambling that the player will not have a catastrophic year 4 injury and will not regress; the player is making the trade off of capping their earning potential at sub-maximum value but guaranteeing a great salary regardless of health/performance in year 4. A calculated risk by both sides.
So what is the benefit to offering a max deal after year 3? As far as I can tell, there is none. I suppose, in really rare situations, a player could be so "offended" by not getting offered a max deal that they would just play out years 4 and 5 (sacrificing ~10 million dollars in year 5) and enter unrestricted FA. But I don't think that has ever happened, that a player not offered a max in year 3, but offered the max after year 4, is so slighted that they refuse.
Here's what I can see happening if a player is NOT offered a max deal after year 3:
-They regress/fail to improve as projected in year 4 and prove they are not worth the max. No teams bid on the player. Team signs player sub-max/realizes they don't want player.
-They improve as predicted. Enter RFA. Other teams offer max. Team matches, keeps player at max salary: no different than if signed after year 3!
-Player blows out knee. Team avoids major rebuild/sunk cost/cap hit.
So What if a player is offered the Max after year 3?
-Player proves he is worth it in year 4. No different outcome than point #2 above: player is locked in at max contract for same length of time.
-Player blows out knee: Team is on the hook for max contract for many years.
-Player regresses: Team on hook for max contract for many year.
As far as I can tell, by offering a max deal after year 3, the team gains nothing. Best case scenario, they end up in exactly the same place as if they had waited until year 4 bidding. Worst case scenarios can sink a team for years. By waiting until after year 4, the teams lose nothing but avoid much risk. In general, the only reason to negotiate early is to use the leverage of the unknown for the player to gain something in negotiation: shorter length, lower contract amount, etc. With designated max dollars, offering the max entirely negates that negotiating advantage.
So, regardless of whether Kevin Love specifically is worth the max, it is bad business practice for Minnesota to bid against itself, intentionally accept risk, and gain no advantage. Though this specific case may work out, I would argue that it cannot work out better than if they waited, and that a team that practices business in such a way will eventually collapse due to unnecessarily accepting risks, some of which will eventually occur.
And these are the owners that want more and more "outs" built into their CBA to protect their profits? How about this one: Stop being idiots first.
Thoughts?
Topic: Why Minnesota Will Never Be Good: (Read 2794 times)