Everything Derozan

[Axel]

Like I said it's a combination of age and financial security. The reality is he's going to be almost 27 when he signs this contract so the deal will extend through his prime. After which it's really rare to see non-superstars get significant paydays. So the security of a 5 year deal making an average of $22M a year ($19M next year) while being paid more total than any other team can pay him may be very enticing. Especially if he wants to be in T.Dot, which appears to be the case.

Can see this being something Masai discusses with him when negotiating a deal. Raptors do have a significant advantage in being able to give him that 5th year of security which allows us to pay more total but less per year than other teams.

If DD is concerned about that, then why would he sign a discount deal to stay here?

[JWash]

If DD is concerned about that, then why would he sign a discount deal to stay here?

But it isn't a discount deal? That's the entire point I'm trying to make.

Yes he's making less per year than a max from another team (this is under the assumption that he'd even get one from a team he's interested in going to --- which isn't necessarily a correct or even smart assumption) but he's signing for more total dollars and thus greater financial security.

[Axel]

Yes he's making less per year than a max from another team (this is under the assumption that he'd even get one from a team he's interested in going to --- which isn't necessarily a correct or even smart assumption)

Not a smart assumption by your estimate but one that not a single professional writer has disagreed with yet.

Seems more foolish to assume that DD is going to take any sort of discount for the Raps or leave money on the table.

[JWash]

Not a smart assumption by your estimate but one that not a single professional writer has disagreed with yet.

Seems more foolish to assume that DD is going to take any sort of discount for the Raps or leave money on the table.

That's fine, but either way in the current discussion we're operating under that assumption for arguments sake instead of the usual "He's not getting max offers ---- He is getting max offers" meaningless back and forth.

Right now I'm saying that Masai may be able to trump even a max offer from another team by offering him more or the same total dollars over a longer term. Resulting in a smaller year over year cap hit for us than it would be for other teams, but DD still making his $100M plus.

[Axel]

I didn't realize we all agreed to operate under an assumption that you just called "not smart". So really you are trying to frame the parameters within your opinion.

So no, I don't believe it will happen. DD will want a max and will feel disrespected by Masai's lower offer. DD has always loved Toronto, but he has always been given a huge role on the team and will want to be paid as much by us as others offer.

[JWash]

I didn't realize we all agreed to operate under an assumption that you just called "not smart". So really you are trying to frame the parameters within your opinion.

So no, I don't believe it will happen. DD will want a max and will feel disrespected by Masai's lower offer. DD has always loved Toronto, but he has always been given a huge role on the team and will want to be paid as much by us as others offer.

It's not a lower offer. Again the max that another team can offer is not the same as what Toronto can offer. There is nearly a $40M gap in the Toronto max vs. other-team max.

I'm operating under that assumption even though I don't agree with it for argument's sake. And now yet again it's flipped back to a discussion on whether he's going to get a max offer or not.

I'm saying if he gets or is going to get a max offer Masai could potentially beat it by offering more total money over a longer term. This isn't restricted FA where if he gets an offer sheet we have to give the exact same contract.

[DanH]

But it isn't a discount deal? That's the entire point I'm trying to make.

Yes he's making less per year than a max from another team (this is under the assumption that he'd even get one from a team he's interested in going to --- which isn't necessarily a correct or even smart assumption) but he's signing for more total dollars and thus greater financial security.

To me, it would have to be for at least another half-year worth of salary to make the short term cash loss worth it. Remember, a max deal elsewhere is 25.1M, 26.3M, 27.4M, 28.5M. That means in your scenario he is giving up 22.1 million over the first 4 years.

So the math comes down to assumption of longevity at his prime.

If we assume he never signs another deal for significant money (not an assumption DD will likely make) then your deal is better for DD - by only 2.6M. But if we assume he is a safe bet to sign for at least the minimum in that 5th year if he only has a 4 year deal (so, basically, any scenario except career ending injury) - then that difference is only 0.8M (as he would make 1.8M on a veteran minimum deal). That's practically nothing. And that is effectively what he'd be making by taking the 5 year deal - we can look at it as the original 4 year max plus a 5th year at the difference in total salary, which is about 1M when you factor in a minimum replacement deal.

Then we can look at his likely longevity. You'd expect him to last at least until 35, as is becoming very common these days. So that's 3 years of earnings after a 5 year deal, or 4 years after a 4 year deal. Then the comparison is 110 M plus 3 years of earnings versus 107M plus 4 years of earnings. If he is signing more in the range of a MLE deal for those final few years, then the totals (at about 6M per year for MLE, that may change with CBA negotiations but it ain't going down) are 110M + 18M versus 107M + 24M - in which case your deal actually nets him less money - and that assumes he is capped at the MLE and isn't making potentially much more - even in his early 30's he could be seen as a difference maker, in which case he will likely easily surpass the MLE.

If a max 4 year deal is on the table, I think a 5 year deal has to beat it by a decent margin to be considered more security. Having the money spread out more isn't more security - in fact any accountant will tell you it is lost money due to the opportunity cost. If we offered 5 years, 120M - that would probably be seen as an equivalent to the 4 year max deal - at least it provides an additional 13M in effective 5th year salary.

Even a player option doesn't help, as it kind of reduces the value of the deal for DD - it means if he opts out before the 5th year, he is essentially signing a 4 year deal for significantly less money so he can hit the market at the same time he would have if he signed the max deal in the first place, with the added bonus that the additional "security" of the player option is essentially between 1 and 3 M - also known as "pennies" when discussing 100M+ contracts.

[CalgaryRapsFan]

It's not a lower offer. Again the max that another team can offer is not the same as what Toronto can offer. There is nearly a $40M gap in the Toronto max vs. other-team max.

I'm operating under that assumption even though I don't agree with it for argument's sake. And now yet again it's flipped back to a discussion on whether he's going to get a max offer or not.

I'm saying if he gets or is going to get a max offer Masai could potentially beat it by offering more total money over a longer term. This isn't restricted FA where if he gets an offer sheet we have to give the exact same contract.

For any player, there's likely a point where they decide to max out the annual salary over a shorter number of years (especially if he feels his current team disrespected him with a lowball offer), and set themselves up to sign their next contract while a year younger.

It's all about long-term security VS maximizing each year; the question is, where is the tipping point (and what other factors also influence the decision-making)?

[Snooch]

No go idea.

You are suggesting a different team offers 40 dollars iver 4 years....average of 10 per year.
We offer 40 million over 5 years average of 8 dollars per.


What you forget is the time value of invested money.

Those millions per year difference and an even modest invested return of 5% equates to alot of money in 5 years time

Money is worth more in your hand now than in 4 years time when inflation and lack of investment revenue deflates its value.





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[JWash]

To me, it would have to be for at least another half-year worth of salary to make the short term cash loss worth it. Remember, a max deal elsewhere is 25.1M, 26.3M, 27.4M, 28.5M. That means in your scenario he is giving up 22.1 million over the first 4 years.

So the math comes down to assumption of longevity at his prime.

If we assume he never signs another deal for significant money (not an assumption DD will likely make) then your deal is better for DD - by only 2.6M. But if we assume he is a safe bet to sign for at least the minimum in that 5th year if he only has a 4 year deal (so, basically, any scenario except career ending injury) - then that difference is only 0.8M (as he would make 1.8M on a veteran minimum deal). That's practically nothing. And that is effectively what he'd be making by taking the 5 year deal - we can look at it as the original 4 year max plus a 5th year at the difference in total salary, which is about 1M when you factor in a minimum replacement deal.

Then we can look at his likely longevity. You'd expect him to last at least until 35, as is becoming very common these days. So that's 3 years of earnings after a 5 year deal, or 4 years after a 4 year deal. Then the comparison is 110 M plus 3 years of earnings versus 107M plus 4 years of earnings. If he is signing more in the range of a MLE deal for those final few years, then the totals (at about 6M per year for MLE, that may change with CBA negotiations but it ain't going down) are 110M + 18M versus 107M + 24M - in which case your deal actually nets him less money - and that assumes he is capped at the MLE and isn't making potentially much more - even in his early 30's he could be seen as a difference maker, in which case he will likely easily surpass the MLE.

If a max 4 year deal is on the table, I think a 5 year deal has to beat it by a decent margin to be considered more security. Having the money spread out more isn't more security - in fact any accountant will tell you it is lost money due to the opportunity cost. If we offered 5 years, 120M - that would probably be seen as an equivalent to the 4 year max deal - at least it provides an additional 13M in effective 5th year salary.

Even a player option doesn't help, as it kind of reduces the value of the deal for DD - it means if he opts out before the 5th year, he is essentially signing a 4 year deal for significantly less money so he can hit the market at the same time he would have if he signed the max deal in the first place, with the added bonus that the additional "security" of the player option is essentially between 1 and 3 M - also known as "pennies" when discussing 100M+ contracts.

Ok this makes sense. Yeah I guess with the 5yr/110M I'm not taking into account the money he would get in the 5th year after his potential 4 year max would end.

So either way I think even if DD were to get a max offer from a team he actually wants to play for, the Raptors could retain him and offer $5M per year less on average than the max. It's not like we'd have to throw 5/145 to beat him when other teams can only offer 4/107.

[JWash]

For any player, there's likely a point where they decide to max out the annual salary over a shorter number of years (especially if he feels his current team disrespected him with a lowball offer), and set themselves up to sign their next contract while a year younger.

It's all about long-term security VS maximizing each year; the question is, where is the tipping point (and what other factors also influence the decision-making)?

Even so I think the idea that the Raptors will somehow be forced to offer 5/145 is farfetch'd at best.

[OldSkoolCool]

We're talking about Demar not TRoss....


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I am talking about DeMar DeRozan.

Lots of money for a controversial offensive player and a poor defensive player is not a good business practice

[CalgaryRapsFan]

Even so I think the idea that the Raptors will somehow be forced to offer 5/145 is farfetch'd at best.

I would think that the difference would need to be fairly close to the amount he believes he'd negotiate after his 4-year contract wrapped-up. His age (at that time) and the security factor would likely both help the Raptors negotiate it down from a max-5th year, as you alluded to.

However, even a 5/125 scares me, because I don't think DeRozan is worth $25M per season.

Regardless, it will be very interesting to see how this situation plays out, from the perspectives of DeRozan, MU and Raptors team-building (ie: the rest of the cap space).

[DanH]

Certainly the Raptors will not be forced to offer 5/145. But there's no way they can bid as low as 5/110. 5/120 is the absolute minimum IMO, and depending on DD's security vs max earnings slant, might not be nearly enough, especially (and it is odd to view it this way) with a player option, as it forces less money into the now and more into the future (and into that option which ideally for DeRozan he will never pick up).

So to compete with a max offer, we are still looking at 24M+ per year average salary. Which is a different picture than the 22M per year you proposed as an alternative. And that still assumes DD's interest in taking a short term pay cut for security long term, which is far from a safe bet.

[LJ2]

If MU can get someone better to take that money, I'm sure he'll explore that. Feels like the NBA is entering a point where there isn't enough talent to give your money to, so holding onto what talent you have and any cost is of high importance to teams not looking to tank.