Front-loading is stupid
OK, this started out as a nitpick to this comment (which I don't totally disagree with). Among other things arjoseph lauded Pax for front-loading contracts, and I do seriously disagree with that. When I really started thinking about it, we'd be in a much better position if the Bulls had back-loaded Noc and Kirk's deals. And if the Bulls had been thinking ahead at all, they should have known that as well.
If they'd given Kirk and Noc traditional, back-loaded contracts, they'd have an extra $3.5M before they hit the luxury tax threshold. Thus, instead of having $17.5M to re-sign Ben and Lou, we'd have 21M, and management wouldn't be freaking out over paying the luxury tax. As much. At least we could have offered, say, $70M over six years to both of those guys over six years instead of the $56M or so we're probably offering (that's the most we could offer to them before hitting the tax).
And one of the reasons other teams are prowling around making offers now is they know the Bulls are very tax-averse and they know we're right on the cusp. A few million could be enough cushion to help us, because it removes some of the question in their minds that we're willing to retain our guys. And it'd make us more willing to retain our guys.
Now maybe you're saying "OK, but those front-loaded contracts make Kirk and Noc more tradeable, but I say:
1. The amount it helps is probably marginal. They're still on very long-term deals in a league that prizes short-term deals. If a team likes one of those guys enough to take them, I think it's going to be because they like the player and can live with him being under contract for another several years, not because the deal is front or back loaded. In fact, if you actually figure it likely you'll trade a guy in a couple years, it makes sense to backload, not frontload. You'll have to pay them less and leave the more onerous contract years to the next team.
2. Whatever the extent it bolsters those guys' value, it's not worth the cost of potentially losing Deng or Gordon. That comparison isn't even close.
So in fact, front-loading is turning out to be quite a poor deal for the Bulls. By front-loading those guys, they've made it more difficult to sign their better guys.
Front-loading might have been a good idea if the Bulls expected to have those guys around for a long time, but as we see, we're talking about two players who are quite likely to be traded and don't project as long-term starters (In Kirk's case that's a matter of lucking into Rose, but even if we hadn't, he stank it up last season and people were hot for a replacement). And front-loading might have made sense if we were truly committed to not letting financial concerns be a major factor in signing Deng and Gordon. But we are. And Bulls management knew that back when we were front-loading those deals (and giving Noc and ungodly sum, which is a whole seperate issue). So basically, front-loading those contracts (and signing Noc in the first place) was very poorly conceived. To say the least
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Plus Front Loading takes away a future trade asset
That is the last year when the expiring contract and not the player become more valuable..
by houstonbull on
Jul 24, 2008 8:09 PM CDT
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you're retarded
“Front-loading might have been a good idea if the Bulls expected to have those guys around for a long time”,
If the organization wasn’t planning on keeping these guys around for a long time, why would they sign them to long-term contracts? You don’t sign anyone to a long term contract because you think you’ll trade them in a season or two. Obviously Paxson signed them with the intention of keeping them long-term, hinrich signed his extension after playing for the national team and was on the rise, and nocioni’s and wallace’s contracts were backloaded because they were planning on having the flexibility to specifically resign deng and gordon when their extensions come up. hinrich even took less money on his deal so they could have the flexibility to keep the core together.
"Move over Oscar Robertson and Jerry West, because the greatest guard in basketball history has just been drafted."
-Ron Coley (Assistant at Laney High School on June 19, 1984 the night Michael Jordan was drafted)
by big tuna on
Jul 24, 2008 8:52 PM CDT
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"hinrich even took less money on his deal"
for some reason that doesn’t sound right or worth repeating at this point in time.
The organization drafted Derrick Rose instead of high scoring Michael Beasley… For a specific reason
they must have felt Kirk was not worthy of even the less money he took back then?
by exult463 on
Jul 24, 2008 9:00 PM CDT
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There were many reasons the Bulls drafted Rose.
Pax said repeatedly he was going to take the best player and worry about reshaping the roster afterward. I doubt Kirk Hinrich was the deciding factor in the Rose/Beasley debate.
by arjoseph on
Jul 25, 2008 11:56 AM CDT
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You're right.
How could I have missed that!
by Sports2 on
Jul 24, 2008 9:15 PM CDT
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Every million helps!
especially now.. Summer 2008.
It seems Paxson was thinking in 2006, I’ll pay the face of the franchise Kirk 10 million annually, and the rest of the then to believe core 7 to 8 million each at contract renewal (Noc, Deng, Gordon) and also bring in a big time free agent and pay him a whopping 15 million = NBA Championship.
Unfortunately a derailed coach, the expensive free agent (Wallace) and Hinrich didn’t prove worthy. Wallace and Kirk destroyed Paxson’s strategy because it was based on those two being better (the best) players and also represent the leadership on the team.
Now the better players (Deng & Gordon) feel insulted because not enough money is available in comparison to player production of previous signed contracts.
What now should Paxson do? Or has Reinsdorf already started doing something?
by exult463 on
Jul 24, 2008 8:54 PM CDT
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What should the Bulls do?
Well, if I were running the show, I’d quit letting past mistakes poison the future. I’d simply offer Deng and Gordon legitimate deals based on what I think it would take to keep them, and I’d plug away at moving Nocioni and Hinrich this season to get under the luxury tax threshold and bring in some help.
Deng is fairly easy, I think. It’s overpaying him a bit, but I don’t think we’ll completely regret it or anything by paying him 6/$75M. If we’d made that offer 3 weeks ago instead of offering less than we had before while other teams were talking about more, I think we’d have him under contract already. In fairness I dind’t think Deng would command that a few weeks ago, but it’s clear now that there are several teams (here and abroad) that can would will pay the man if he becomes available. The Bulls, unlike me, have known that for a while (or should) and are still pussy footing around. That’s $10M this season.
Monta Ellis just got 6/$66M. Without considering salary, would you rather have him or Gordon? Ellis is younger and has looked more productive to me. I also don’t think as many teams are lining up to pay Gordon as would line up to pay Deng. That makes him a harder decision to me. I don’t really want to commit long-term, but I need him now.
I offer 2 years and $21M, with a team option for a 3rd year for another $11M. If that fails, I’m not quite sure what I’d do. I think I’d offer a bit less over the long run. I think I’d give the Hawks (Josh Smith), Sixers (Jason Smith, Willie Green) and Bobcats (Okafor, JRich?) calls and explore trades. I wouldn’t feel too good about that though, but I don’t see a lot of other options at this point.
If we lock up Deng and Gordon as I’d be cautiously optimistic of doing, we’d end up being about $2.5M over the luxury tax threshold. We have until the end of the year to get under by various means. I’d try, in any case:
1. Kirk Hinrich ($10M) for Al Harrington ($9.2M) to balance out the roster. Start Gooden at C unless Noah really and truly beats him out. Gooden/Harrington/Deng/Gordon/Rose start with Hughes/Thabo/Tyrus/Noah the prime backups.
2. Try like hell to move Noc. Something like Noc ($8M) to Denver for Steven Hunter ($4M) using trade exceptions would likely still keep Nuggets a bit under the lux tax and get us under too. That’s one idea anyway.
by Sports2 on
Jul 24, 2008 9:43 PM CDT
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That sounds like a good approach in general
Yet, Paxson and/or Reinsdorf’s manlove for Kirk, and Paxson’s stance on not exploring any trades until he’s finish with Deng/Gordon’s contracts?
Bulls are unwilling to go over the luxary tax threshold even if it was for a day, 5 weeks, 6 months?
Paxson/Reinsdorf current stance seems counterproductive with this general approach?
by exult463 on
Jul 24, 2008 9:57 PM CDT
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Just to be the total ass that I always am...
...but I’ve been saying they should do these things for weeks. Matt and others have said similar things. You sign Gordon and Deng because they’re the better players. Then you explore the myriad ways to shave the 3-6 million to get under the tax. There were a few teams that did it last year at the deadline. Philly got under the cap this summer. Denver got under the tax this summer.
For Deng, I’d backload the contract going 10, 11, 12, 13, 14, 15, which is your 6/75, and 12.5 per. (I might only go five years w/ Deng, but whatever.)
For Gordon, I’d go 8, 9, 10, 11, 12, which is 5/50. That would make getting under the tax fairly easy too. If he doesn’t go for that, I’d add a million per and take off a year, and repeat. So 4/44 and 3/36. You can go 9, 10.5, 12, 12.5 or 10, 12, 14.
Some people will call this ridiculous and horribly overpaying. I don’t think it is. If Gordon doesn’t sign that 3-year deal, then he does need to be QO’d and see what’s up next year. I don’t see how neither guy doesn’t sign for those, and I really can’t see, barring a catastrophic collapse, how either contract greatly hampers the team.
by tyger1147 on
Jul 24, 2008 11:58 PM CDT
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I don't think swapping Hunter for Noc helps the Nugs' tax figure
but I do appreciate the creative use of trade exceptions :)
management sez: recommend fanposts/fanshots/comments! Click 'reply' when replying to a comment! Flag jerkfaces!
by your friendly BullsBlogger on
Jul 25, 2008 9:30 AM CDT
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Paxson front loaded the contracts so that he WOULD have enough space
to resign Deng and Gordon…that was the whole point.
What he didn’t plan for was adding the nearly $5 million rookie contract of a #1 overall pick, he was thinking of a late to mid 20’s pick with a $1.5 million rookie contract. Because almost everyone had the Bulls near the top of the East last season…Poof, there is your $3.5 million.
by Dionysus2.0 on
Jul 24, 2008 9:55 PM CDT
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Wow
I got lucky and won the lottery for the 1st pick, I’m the GM of the Chicago Bulls, the season is over and now I need to clear 3.5 million because of this rookie Rose so my plan would work (Deng&Gordon) and I have approximately 9 months to cut my budget by 3.5 million before luxury tax eats my boss alive? Big Deal, improvise, this is managable.
by exult463 on
Jul 24, 2008 10:05 PM CDT
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Not much margin for error
He clearly didn’t front load the contracts so he would have enough space. Front-loading the contracts reduced the space we’d have available.
It’s true that a lesser pick than Rose would save a bit over $3M or so, but at the same time, I don’t think we should obsess over the particular $3.5M number.
The fact is, the Bulls might have to pay more than the $21M I mentioned to keep our guys. So they’d be over the tax threshold anyway.
Which, again, sort of gets to the point. If the Bulls are really that hyper-focused about avoiding the tax (and there’s plenty of evidence to think so at this point), they would have been better off keeping salaries low.
Granted, front-loading Kirk alone wouldn’t have been as much of an issue if they’d simply let Noc walk or managed to engineer a sign and trade for a future pick last year.
by Sports2 on
Jul 24, 2008 10:10 PM CDT
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The Dubs just signed Marcus Williams
so they have no reason to trade for Hinrich now.
Sometimes a player's greatest challenge is coming to grips with his role on the team.
-- Scottie Pippen
by Orlando Woolridge on
Jul 24, 2008 10:17 PM CDT
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I agree with your view.
If Paxon is so calculating, he already had estimated the rookie salary at 9. Having the first pick instead of the 9th, means that Derrick Rose replaces BG AND a Brook Lopez (guess)
by Fastbreak on
Jul 25, 2008 9:58 AM CDT
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Front loaded contracts
are brilliant…..of course they mean you have to mix up front loaded contracts with back loaded (Deng and Gordon) contracts, but they definately add flexibility….
And that comment that Kirk isn’t tradable for $7M in his last year is ridiculous. Hinrich will be worth more than that on the open market (barring injury) and instead of trading that piece for crap like Wally Sczierbiak, Theo Ratliff, etc. the Bulls might get some draft picks, etc in that last year should they need to make a trade).
It also helps in the years today because teams know each year they’ll get a guy who’s nipping his prime for less and less money as the salary cap continues to increase by 5-10% a year….
I vote they are brilliant. If we didn’t have Hughes and have to take Hughes for Wallace (which I would still do even with the issues) folks would be lauding our contracts and we wouldn’t have that horrible logjam (and had Wallace played, we might have Beasley on our team instead of Rose)....
by majoyenrac on
Jul 25, 2008 10:19 AM CDT
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I could be wrong
but doesn’t Kirk have a clause in his contract that if he is traded he gets a certain percentage increase in his pay as a result? For the life of me I can’t find the earlier blog that was mentioned on. There are so many “what should happen to Kirk” posts in the last few months. Anyway, that would effect his tradability.
As far as the front loading vs back loading thing I think a lot of people were originally please with the front loading. And for what it is worth, how would have back loading it helped either at this point? The only thing that would have cleared up room for Deng/Gordon is if they moved Noc or Kirk or had the foresight to not pay them as much across the board in the first place. At this place front loading is just a symptom in the larger problem of signing Deng and Gordon.
Everything I post is speculation. I have no insider information nor ideas deemed concrete enough by those who are self-elected to regulate post content.
by cranscape on
Jul 25, 2008 11:46 AM CDT
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THe problem
Is that we front loaded both….or more that we overpaid for Nocioni.
Granted I like Noc and see him more valueable than many on this site….
I’d be fine overpaying to retain Noc after we cleared up the Deng contract….but I don’t know why we outbit ourselves there. Noc should have had a nice 5-6Yr clean $36M contract, instead we paid him $45M and also front loaded that one…. We easily could have done this given the injury issues Noc had 2 years ago, I don’t know why they also felt the need to overpay AND more importantly front load Noc too.
I like Noc now, he’s a nice insurance plan if we can’t keep Deng, but the mistake was made by also front loading that contract.
I like hte Hinrich front loading. Although I will like it less if htere was ssome clause like you said that causes an increase…
by majoyenrac on
Jul 25, 2008 12:06 PM CDT
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the bulls didn't pay Noc 45 million over 5 years. It was 37.5 over 5. And it was still too much.
by fundamentallysound on
Jul 25, 2008 12:07 PM CDT
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I was trying to say
Pay Him $6M for 5 years cleanly with that player option for the 6th year at $5M.
His current contract I thought was 5 yrs 37.5M with an optional 6th at 7.5M….
by majoyenrac on
Jul 25, 2008 12:11 PM CDT
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That option is a team option not a player option. The Bulls won't be picking that one up
unless Pax’s Noce love knows no bounds.
by fundamentallysound on
Jul 25, 2008 12:19 PM CDT
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I wouldn't be surprised if there's a trade kicker
management sez: recommend fanposts/fanshots/comments! Click 'reply' when replying to a comment! Flag jerkfaces!
by your friendly BullsBlogger on
Jul 25, 2008 12:12 PM CDT
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another interesting contract note
read Sham on the RealGM board yesterday saying that Hinrich missed out on $250k in incentives, which is why his contract for 08-09 is $10m and not $10.25.
management sez: recommend fanposts/fanshots/comments! Click 'reply' when replying to a comment! Flag jerkfaces!
by your friendly BullsBlogger on
Jul 25, 2008 12:15 PM CDT
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good.
he was rotten this year.
by fundamentallysound on
Jul 25, 2008 12:20 PM CDT
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Maybe my reasons for liking the front-loading we've done are purely superficial and irrational.
I like the idea that the contract will be getting smaller as the player is getting worse (certainly the case for Noc and Wallace, arguable for Kirk). It does make them more tradable in my mind because their contracts will be more palatable to other teams that might be looking for a piece to put them over the top. It’s a risk-averse stance. Sure, a bigger contract is more attractive in the last year when it is expiring, but what if we want to move someone before that? Two or three more affordable years on the back end makes other teams more likely to pull the trigger, if they’re actually looking to pick up a player rather than cap space. But I haven’t really done tons of analysis, and my statement in the other post was based on these superficial thoughts about the tactic.
To me, the thing that put us in the cap-space bind was not front-loading (or even overpaying Noc), it was the Wallace signing. Pax viewed it as the missing piece that gave us a shot at a quick championship run, and it didn’t work out. We didn’t evaluate his talent and remaining viability correctly. Pax made it a little bit better by breaking Wallace’s big contract up into Hughes + others, the others expiring sooner, but still, the damage is done. Kirk or Noc making a few more or less million this year (because their contracts are front-loaded or back-loaded or overpayment, or whatever) is not the reason we’re in a bind. We’re in a bind because we have Hughes sitting there being worthless and making lots of money, which is a direct result of acquiring Wallace. If instead of Wallace/Hughes, we had multiple smaller contracts with varying durations (some of which might have already expired), we’d probably have the requisite flexibility to not worry about our RFAs now.
Of course, if Hughes’ contract had been front-loaded by the Cavs, we’d probably would have that extra $3.5 this year for Deng and Gordon anyway. :)
by arjoseph on
Jul 25, 2008 12:19 PM CDT
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And yet Wallace was not front loaded
Is front loading practiced by any other club? When a practice isn’t replicated its a strong indicator that it’s not all that great.
by NBA Observer on
Jul 25, 2008 1:23 PM CDT
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Ben Wallace's contract was indeed front loaded.
With a little help from the Internet Archive: link.
Also, I don’t think the collective actions of NBA GMs is a good parameter to judge whether a certain practice is smart or not. Most GMs in this league either go with the flow, or make huge mistakes. There are a few organizations that are run well (Portland, OKC nee Seattle, San Antonio, Detroit), but they aren’t the majority. Generally, I think it’s good if you buck current NBA front-office trends rather than conform to them.
by arjoseph on
Jul 25, 2008 2:26 PM CDT
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how is OKC well run? because they drafted Durant.
Presti managed to swindle a bunch of first round picks too, but let’s hold off on crowning them a greatly run organization. also, I believe karma will get the best of them for the vileness they did to the city of Seattle
by fundamentallysound on
Jul 25, 2008 2:30 PM CDT
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First of all, ownership and management are two different things.
To my knowledge, Presti has had nothing to do with Bennett’s machinations.
Second, those “swindlings” of picks are exactly what I’m talking about. Presti seems to make smart moves that other GMs don’t. See, e.g., the Suns trading away all picks that would provide them with cheap talent in favor of aging/expensive vets and now facing nothing but decline, except for Amare; pre-Walsh Knicks; the myriad MLE or worse contracts for anybody approaching 7’ (Dampier, e.g.); etc.
True, Presti got lucky with Durant, and had license to blow the team up and start from scratch (which is always “easier” than rebuilding on the fly). But he’s doing things that are smart. To say “let’s hold off” is basically saying that we’ll judge a guy by how well his team does after the fact. In that case, I guess Danny Ainge is a wonderful executive. I don’t think that’s the best way to think about it. You either make smart, defensible decisions consistently, or you make indefensible decisions. Part of the success is luck, which should not be attributed to the GM. I don’t blame Pax for failing to trade for KG or Gasol, as still (insanely) is held against him by some. He made better offers than anyone else, and the GMs on the other end were too stupid to realize it (or, in the case of Memphis, were too hamstrung by penny-pinching owners to care about the basketball end of it). He traded down from two to four in the draft to get the guy he wanted at a discount while picking up an extra piece. He has never been beguiled by “upside potential” such that he’s drafted an Olowokandi, Kwame, or Darko (you could maybe count Tyrus here barring improvement, but even if Tyrus never improves, he’ll be a useful player for years to come in the league); every one of his draft picks has become a very useful player. He did the most with a bad situation by turning Ben Wallace into a slightly less-bad contract in Hughes, plus a young useful player in Gooden, plus some other pieces that will either become bench guys on the cheap, or come of the cap sooner than Wallace would have.
On the other side, he greatly overvalued Ben Wallace and misjudged how close we were to contention; he overpaid Noc and probably gave him too many years while bidding only against himself. In my book, those are the only glaring negatives. I’d put him at the above-average point of NBA GMs.
by arjoseph on
Jul 25, 2008 2:52 PM CDT
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I just don't like the feeling that I've gotten with Pax more recently that he doesn't
have much of a plan or that when he does (sign Ben Wallace… chaaaaampionship) that it doesn’t even come close to working. It’s certainly easy to be harsh on him after this past year, but we’ve been to the second round once with these guys and it has seemed like Pax hasn’t the faintest idea of how to build a real contender. Maybe that’s changing with the emphasis on development, the new, very experienced (outside of Vinny) coaching staff, and the luck of the Rose lotto. I hope for our sakes it is.
by fundamentallysound on
Jul 25, 2008 3:02 PM CDT
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Sports2
Is SportsTwo LLC your operation? The site is terrific.
Is any of the salary data portable to XML, CSV, TXT, or XLS? I’d love to play around with the numbers.
by NBA Observer on
Jul 25, 2008 1:21 PM CDT
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Yep (mine and others), thanks!
I’d send you the numbers if I had some contact info. I don’t see an email hear, but you can send me a PM via my site if you want (I’m MikeDC over there). I need to update them again this weekend with the new signings anyway, and I’ll send you a copy.
by Sports2 on
Jul 25, 2008 3:14 PM CDT
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