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Thursday, August 6, 2009
Brandon Roy, Hard Times and Guaranteed Contracts

Brandon Roy
Brandon Roy and the Blazers have agreed to a five-year contract extension that'll keep him in black and red through 2013-2014, and a year longer if he so chooses.

It's a no-brainer: In three NBA seasons Roy has been rookie of the year, and a two-time All-Star. The Blazers were 21-61 the season before he arrived and 54-28 last season, and are projected to be on the cusp of a multiyear run as a major NBA force. Roy's entering his prime, and ought to stay there throughout this deal. It's hard to imagine any argument one could make that he's not worth a maximum contract.

Hard Times
It's sign of the times, however (and the efficacy of the collective bargaining agreement) that the maximum contract for one of the NBA's best young players is expected to start at about $14 million. In a league with some recent team payrolls around $100 million, $14 million per superstar is bargain shopping. (That's roughly Peja Stojakovic money, and not even two thirds of what Jermaine O'Neal or Tracy McGrady will make this season.)

Brandon RoyIt makes you wonder what the Blazers were haggling about. Why, exactly, did this process take half the summer?

The fifth-year player option was the issue. It can't be Blazer owner Paul Allen's favorite thing: Roy will hold all the cards as 2014 approaches. If he feels like he'd like this or that change to the roster or coaching staff, or even would like to be traded, the front office has to at least appear to try to satisfy him, much like the Cavaliers can't be seen to ignore LeBron James.

And you might think: Well, at least the Blazers can plan around a certain budget for Roy for 2014-2015, should he stay. With annual raises, he'll probably make around $20 million a season by then, when he'll be 31. But even that certainty is an illusion. If both Roy and the American economy are productive and healthy at that point, any player would opt out to get his first true market value contract from the Blazers or someone else. (This year, thanks to the rookie scale, Roy will be the seventh-highest-paid Blazer, at a little less than $4 million.)

The case has been made, in fact, that anyone signing a maximum contract this year or next may be wise to make it for three or four years instead of (in Roy's case) the maximum five. Maximum contracts are derived from the salary cap, which is seen as abnormally low just now owing to the bad economy.

In a sense, Roy got the best of both worlds. He can offer his growing family the certainty of a roughly $82 million deal. If injuries or weirdness strike, they have all that money, no matter what. On the other hand, if the economy recovers to make this deal look below-market, he will still be in line for another huge deal before retirement.

Guaranteed Contracts
Now, just for a moment, let's consider the NBA's guaranteed contracts. I have written a zillion times that the dead weight of bad contracts is one of the most malignant forces in the NBA. All the dollars and roster spots tied up in injured or ineffective players is shameful. The Euroleague and the D-League are loaded to the gills with players who would kill for those roster spots, and they'd play for a tenth of the money. The teams, of course, would kill for the same thing.

This season Houston will pay Tracy McGrady something like $23 million. The Heat will pay Jermaine O'Neal about the same. Zach Randolph makes so much money that, even though he's very skilled in his way, it's tough to find a team willing to sign his many paychecks.

A fair percentage of NBA trades involve one GM saying "all right, I'll give you this really really good player, but only if you also agree to pay these other guys who aren't worth their contracts." In other words, a decent chunk of NBA employees are burdens to their employers.

Holy inefficient market, Batman! My inner libertarian yearns for a world in which at least the worst of those cases could be set free (with cushy, insurance-funded retirements, or new smaller market-value contracts with other teams) much like the league's one-time amnesty clause a few years ago. Wouldn't the NBA be a better place if Daryl Morey could spend that $23 million on seven additional Luis Scolas, or whatever other players he wanted? Wouldn't all those hungry players, in place of injured has-beens, increase the value and enjoyment of every ticket to every NBA game?

But for the first time in my life, I now see at least some merit in big, bloated guaranteed contracts being dutifully paid out, year after year, wasting roster spots and cap space, on players who are blatantly not worth the money.

What's good about that, you ask?

It's the ultimate buyer beware clause for owners. 

Consider Brandon Roy. Of course Portland wants him for his entire career, and of course he can always make a fortune in free agency. He'd thrive with one-year deals year after year, and Portland would want to sign him to a max deal lasting, essentially, forever.

But for one thing: Injuries. There's no joy in even thinking about it, but I guarantee it has been on the Blazers' minds, and that Brandon Roy and his agent Bob Myers have thought about it too. Roy wants that $82 million guaranteed, instead of being a free agent in two or three years when he might get a big pay raise, because the ability to play elite basketball is an ethereal thing. If it somehow goes away, at least the $82 million sticks around.

Look at the league's bad contracts (McGrady and O'Neal, and last year Raef LaFrentz made an insane amount of money), and you'll find players once on their way to greatness who got hurt along the way.

With limited roster spots and cap room, it's just about impossible to win a championship, or even come close, with a whole bunch of money wasted on a player who does not produce. Big bad contracts are death to title aspirations.

And that, right there, is the most powerful reason -- more powerful than the luxury tax -- that there is some reasonable parity in the NBA. It's not a league where you can spend and spend and guarantee success.

That's what James Dolan and Isiah Thomas, bless them, conspired to prove. That's why the Knicks have been doomed for so long. Dolan and Thomas did the dumbest thing you can do in the NBA: They spent too much money.

In British soccer, just about every year Manchester United, Liverpool, Arsenal and the like are among the very best. They spend the most. A few years ago, Chelsea began spending, and suddenly they're among the best, too.

Teams with smaller budgets duke it out to finish in the middle of the standings.

English soccer is a sport with a class system, and only a few teams are in the elite class. They're the rich teams. If Dolan and Thomas took their endless pile of cash to England, eventually their approach would result in a winner. But in the NBA, big market teams like the Knicks can spend and fail, while small-market teams like the Spurs and Magic can make the Finals.

I've come to appreciate that a big reason for the NBA's limited parity is the reality that one big bad contract spells doom. (Thomas and Dolan handed them out like candy, and are still a laughingstock.) Now even the Knicks (who are keeping David Lee and Nate Robinson waiting) know one must be cautious spending money, no matter the quality of the players.

Which unravels two mysteries for me: Why guaranteed contracts have stuck around this long while hurting the league in countless ways, and why the Blazers took th
eir sweet time agreeing to Roy's fifth-year player option.

(Photo by Garrett W. Ellwood/NBAE via Getty Images)