Why Harrison Barnes Was Justified In Turning Down $64 Million
By Greg Chin
When the news broke that Harrison Barnes had turned down a four year, $64 million contract extension from the Golden State Warriors, I was shell-shocked. For most of the offseason, I was of the belief that the Warriors and Barnes could do a deal with a starting annual salary between $12-15 million. And Barnes turning down $16 million as a starting salary was a move from left field.
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I later found out that I wasn’t alone in my reaction – in fact, most of Warrior Nation and casual fans of the NBA shared the same sentiment. Barnes was seeking a contract that would make him the highest paid Warrior – a crazy notion considering his role on the team as a 3-and-D guy.
As time went on, I crunched the numbers and surprisingly came to the conclusion that perhaps Barnes was right in his decision to turn down the extension. Here’s why.
Up until now, fans of the NBA had a system to evaluate a player’s monetary value. For players with less than six years of experience, they are eligible for a max contract worth 25 percent of the total salary cap. Since signing the CBA in 2011, the salary cap remained at $58 million for three seasons, before rising to $63 million for the 2014-15 season, and is now $70 million for next season. The starting salary for the 25 percent max contracts work out to the following:
- $14.5 million for the $58 million cap,
- $15.75 million for the $63 million cap,
- $17.5 million for the $70 million cap.
So, for the most part, it was there was an unwritten “formula” for designating a player’s value. Young and budding superstars would receive the max, while players with potential and a higher ceiling were in the next tier (approximately 15-20 percent of the salary cap).
This “formula” was the big reason why everyone reacted poorly to Barnes’ rejection of $16 million. After all, he hadn’t done enough to prove he was a max-player, and clearly belonged in the second tier. Draymond Green and Klay Thompson received near-max money, but both have showed more than Barnes has. A starting salary of $16 million is widely considered to be max or near-max money under the old formula.
But, the old formula no longer works. The previous method for categorizing players worked under the old salary cap – one that remained constant for three seasons, before rising $12 million over the next two seasons. With the new $24 billion TV deal about to kick in next season, next season’s cap will see a $19 million jump from this season – more than what we’ve seen since the CBA was signed in 2011.
What this means is this: $16 million under the old-TV deal cap won’t be as costly as $16 million under the new-TV deal cap. It’s important to remember that NBA teams work with salary caps, rather than an unrestricted means of signing players.
The Warriors’ proposed $16 million starting annual salary would be 17.9 percent of next year’s cap. Under this year’s $70 million salary cap, 17.9 percent works out to be $12.6 million. Suddenly, that number doesn’t look so daunting. Under the old “formula”, would you be willing to pay Harrison Barnes a starting salary of $12.6 million?
Ultimately, I think the Warriors should work out a deal with Barnes. The risk of losing Barnes as a restricted free agent simply outweighs the potential savings. Restricted free agents tend to cost more, as teams are usually trying to outbid each other. Cautionary tales include: Roy Hibbert, Chandler Parsons, and most recently, Enes Kanter.
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The worst case scenario for the Warriors is this: Barnes has a good 2015-16 campaign that sees him improve, but he doesn’t replace Klay Thompson as the second option on offense. A team offers him a maximum starting salary of $22.25 million, on a deal that is four years (with the fourth year being a player option) and maximum raises each year. The Warriors realize that they are unable to find a suitable replacement, and are forced to match the offer. They sign Barnes to a four year, $95.2 million contract.
For those that are up in arms as to whether a team will sign Barnes to a max contract, just remember that it only takes one team to drive a restricted free agent’s value up. They may not view Barnes as a max player, but perhaps as a near-max player that they are willing to pay extra for.
The significant increase in the salary cap next season will change the way we evaluate players. Many anticipated that the increased salary cap would result in massive jumps in player salary, but up until now, it was an unproven theory.
Welcome to the new NBA.