The Other Ankle wrote:mojosodope wrote:The Other Ankle wrote:
Ignoring the side-taking nonsense: It is a basic fact of finance that unknowns are associated with risk. ANY deal that you make a year sooner than necessary should always be discounted based on the difference in information available from one year to the next.
Whatever you have to pay after an additional year of demonstrated improvement should always be more than what you paid without actually seeing that improvement. A higher number should be expected now that Harris has an additional year of accomplishment on the court with shooting improvement and no major injuries or personal disasters. Players have the option to take the security of a long-term contract a year earlier at a lower value than the one they MIGHT get if they have a good year. This is normal and does not represent a mistake by management.
The only real reason a deal gets done early is if team management actually thinks that the player is going to be significantly BETTER than his own advisers think he will be. Then the offer would still seem high to the player, even though it is actually lower than what the team thinks he will be worth after another year of development. Clearly, Harris & his camp thought that he was worth A LOT prior to last season if they wanted something close to the absolute maximum that he might earn under the rules (12 vs 15?). So there was no advantage to signing him to that amount after year three in the league. Now that he has completed a 4th year in the league and shown additional improvement, he will make more than he would have made if he signed a year earlier. Again, perfectly normal.
The amount that Harris can make is constrained in the language of the CBA. Additionally, the Magic control where he plays due to his restricted status. If the market for Harris is $15 million, so be it. He will have earned it by staying relatively healthy while improving his 3 pt percentage over the last year. There is nothing unusual about any of this to this point. If he gets a max offer and submits it in an adversarial way, then that would be actual news. Not being signed last year was not a big deal and good for him if he makes more because of it.
I can't wait until it's over and we can kiss this thread goodbye!
There was risk associated with the unknown of what his value in free agency was as well. Because of the increasing salary cap alone (a KNOWN variable) his value was higher than 9M.
The reason a deal gets done early is because a player removes the risk of having to play out a season and management removes the risk of a player's value increasing significantly.
A large part of Harris' rise in market value is the change in salary cap which was KNOWN and I believe we should have capitalized on this variable last season.
You can continue to rationalize it all you want, but besides the 3-4m we could have saved I believe there are benefits that are associated with locking in your "better" players who are good locker room guys and represent you well on and off the court. In hindsight I do not think there would have been any negatives associated with extending Harris last season for around 12, I stand behind that and have been saying that since last year.
I also believe there is a lot more that goes on behind the scenes during RFA negotiations that could have been avoided
Mojo, you couldn't be more wrong about the basic financial terms of risk and uncertainty as applied to restricted free agency. Using the words incorrectly shows your lack of understanding here. I know that you're highly concerned with all things related to Tobias. But to butcher the most basic relationship in finance doesn't help your case. Try taking your Harris glasses off rather than trying to rewrite the relationship between risk and return. Because even though you can post an indefinite number of times on a sports fan site, I doubt that you have the ability to rewrite every finance textbook in existence!
Signing early gets a smaller contract for the same player than signing a year later. This is an example of the fundamental relationship in all of finance. There is a discount for guaranteeing payment for services that won't even start for another year. The discount in this case relates to the year moreso than the player in particular. Add in a fairly broad range of performance projections and some history of (minor) health considerations, and the discount for someone like Harris would have needed to be more than average.
Restricted free agency does exactly what it sounds like. It restricts the players options and leverage severely. Your assertion that Harris would have taken 80% of the absolute maximum that he would be allowed under the CBA is actually an indication that he should not have been extended. We get that you are a fan of Harris to the point where you want to argue about these things. But you seem to be blind to the other side of the argument that has filled up 109 pages and counting: There were and remain questions about Tobias.
This is not a slight, it is a fact. There are questions about almost all young players. Tobias simply rated taking the extra year allowed to evaluate. The fact that he showed some improvement combined with staying relatively injury free means he will likely get a nice contract. If you want to see things from Harris' point of view, fine, just be happy for him. But the sheer flexibility of having not signed Harris early was almost a no-brainer for management. The available cap room under Tobias' $5 million cap hold is reason enough to have NOT signed him because it could lead to signing a max level free agent while still retaining Harris. If we had extended Harris, we would have had about $7 million less to spend this Summer. If you look at things from the point of the team and not the player, there are lots of reasons for management taken the exact actions that they have, and very few reasons to go on about it at all.
THE TOBIAS HARRIS non-SITUATION will be over soon! Hopefully it will end with both Harris and a really good free-agent on our team!
Under normal circumstances the discount would work just as you described, but the rising salary cap makes things a little different because teams will be spending in anticipation of the new salary cap.
Tell me what was Harris' value last season during the period we could have extended him. With all the salary cap variables It's pretty had to even determine that in hindsight, but I will say 9m was probably a lot less, 12 MAY have been high under the old salary cap, but essentially a discount under the new.
That is ALL before this season of play.
I get what you are saying, but entering RFA adds a different dynamic. By being restricted teams assume that that you have to OVER-pay to snag said player. This alone raises the player's market value. By allowing a player to enter RFA we are essentially gambling that Harris would not receive an outrageous offer.
Being that it was KNOWN the salary cap was increasing significantly I believe it made sense to extend him last year, or at least try to above 9m.
Reports that Harris would have settled for 80% of his max pretty much makes sense to me and I think management should have basically figured out that they could have negotiated above 9m.
After the salary cap spike, how much percentage wise would a 12m contract be of the cap?
