In the summer of 1996 Dikembe Mutombo was a free agent. Dikembe was the best player on the Nuggets, but the Atlanta Hawks offered him a sizeable contract. Bernie Bickerstaff was faced with a decision. Pay Dikembe more than he felt he was worth, or let the cornerstone of the franchise walk.
Bernie decided that it was not wise to pay Dikembe and Mutombo became a member of the Atlanta Hawks. The rest is history. Dikembe won three of the next five defensive player of the year awards and helped lead the Sixers to the NBA Finals in 2001 while the Nuggets crumbled into obscurity.
Clearly Bickerstaff chose poorly. Mutombo was easily worth the money that he was offered. Even so, Bernie may have actually been ahead of his time. One of the keys to managing a team in the luxury tax era is recognizing when to say, “uncle” over a player’s salary.
The question then becomes how can one determine when a player’s salary reaches that tipping point? That is much more difficult. Clearly Bickerstaff misjudged Mutombo’s value. If we move forward a few years it was clear that New Jersey was wise not to match Denver’s offer for restricted free agent Kenyon Martin (in the end Martin was not signed to an offer sheet, but the two teams worked out a sign and trade that paid Martin even more than he would have received from the proposed offer sheet).
When discussing the issue of allowing a player to sign with another team there is another issue that comes into play and that is maximizing your assets. Losing something with value for nothing is rarely a good business practice. It is clear that Masai Ujiri is a proponent of retaining assets. When faced with the possibility of losing Nene to a team like Houston last fall, Ujiri signed him to a market level contract. It was made clear soon after that the Nuggets management did not believe that Nene was going to be worthy of that contract as time progressed so he was traded. Still, they took the necessary steps to get something as opposed to nothing.
Another example is Wilson Chandler. When faced with the possibility of losing Chandler this summer as a restricted free agent, the Nuggets chose to sign Chandler to a market level contract. The fact that Chandler is frequently at the center of trade rumors and the source of much speculation by fans is no coincidence. I believe Ujiri signed Chandler so that he did not risk losing an asset for nothing.
That brings us to the topic of the day. The Nuggets are faced with a conundrum with JaVale McGee. With the team salary steadily climbing the Nuggets need to be very careful to accurately gage McGee’s value. Paying too much could result in risking incurring the luxury tax when it comes time to retain a core player such as Ty Lawson, offering too little will simply embolden McGee’s representation to seek out a larger deal elsewhere. At that point Denver could be faced with the possibility of being in the position of matching an exorbitant salary or lose a valuable asset for nothing.
Losing McGee for nothing would mean Denver traded Nene for three months of McGee, I am certain with Ujiri’s track record of retaining assets he will avoid that route at all costs. The scary thing is, that could mean there may be no tipping point for McGee in Ujiri’s mind. How much would be too much to retain McGee?
McGee himself is in an interesting position. His value is more based on potential than past production. However, statistically last season he was the equivalent of Roy Hibbert. You may have noticed that Hibbert is going to sign a four year, $58 million contact with the Pacers. Of course there are intangibles involved. Hibbert has been a much more stable influence in Indiana than McGee has. Hibbert is more skilled as a scorer and passer and he has been an All-Star. However, McGee is much more athletic and a better fit in Denver for their up and down style of play. Plus there is the previously mentioned issue of potential. Hibbert has already hit his ceiling. He is never going to be much better than he is today. McGee could one day be far better than Hibbert.
Paying players based solely on potential is a fool’s game, but potential is always a factor in negotiations.
The Nuggets are currently in a good situation with McGee as the two sides are reportedly negotiating and no other team has as of yet stepped in to drive up the price. Benjamin Hochman reported today that the average salary for McGee could be $10 million a year. While that is a lot of money, it is difficult to look at the market and decry that as a ridiculous amount of money. It is fair to voice concerns about McGee’s lack of progress as a player over the years as well as his flighty moments on the court.
The Nuggets were faced with a similar situation in 2008 with another player who had worlds of potential, but was failing to put it all together on the court. The team worked out a compromise that protected the Nuggets from getting stuck in a long term commitment, while still ensuring the player received some financial security. That player was J.R. Smith and they signed him to a three year contract.
I believe the Nuggets should follow the same track with McGee. By singing McGee to a three year deal for $27 to $30 million McGee receives his market value payoff and Denver has an early out if McGee never quite pan out. This also provides a carrot for McGee to keep working as he can cash in on a larger deal after three seasons.
Had Denver signed J.R. Smith to a five year deal, he would still be on the books for $6-$7 million this season. Instead he is playing in New York for half that. If the Nuggets follow a similar path with McGee, hopefully it works out for both sides, but if not, Denver can say good bye to McGee and he can go play somewhere else for much less money just as J.R. is.
McGee is no Mutombo, but Ujiri is also no Bickerstaff.