The NBA's Max Contract Must Die

LOS ANGELES CA - JANUARY 14: Brook Lopez #11 of the New Jersey Nets drives against Pau Gasol #16 of the Los Angeles Lakers at Staples Center on January 14 2011 in Los Angeles California. The Lakers won 100-88. NOTE TO USER: User expressly acknowledges and agrees that by downloading and or using this photograph User is consenting to the terms and conditions of the Getty Images License Agreement. (Photo by Stephen Dunn/Getty Images)

Why do players like Brook Lopez and Roy Hibbert get maximum contracts? Blame the league's artificial price ceiling on player salaries.

What's the biggest lesson of our first real free agency period since the lockout? The maximum player contract has got to go.

I say this with no malice to the players themselves (congratulations on getting paid, and I mean that) or even the teams that must now tell themselves that non-superstars are superstars, simply because they're now being paid in a way that the system says superstars are supposed to be paid.

It's nobody's fault that Brook Lopez, Roy Hibbert and Eric Gordon are now considered "max" players. It was nobody's fault that Nene, Marc Gasol and Tyson Chandler became max or near-max players last year. It was nobody's fault that Joe Johnson, Michael Redd, Ray Allen, Amar'e Stoudemire, Carlos Boozer and scores of others became max players under previous collective bargaining agreements.

And that's exactly why, in a perfect world, the next CBA would kill the concept once and for all. The reason all these players get maximum contracts is because the CBA, whether inadvertently or purposely, makes it so.

Take Lopez, for example. Lopez getting a maximum contract from the Nets has little to do with his actual playing ability. Instead, it's because the Nets are merely responding to two teams -- the lowly Charlotte Bobcats and the suddenly shallow Portland Trail Blazers -- that are also reportedly willing to give him one. Both of those teams need to pay somebody, and Lopez just happens to be the supply for their demands. Nobody else wants Charlotte's money, and the Blazers have already struck out trying to sign a different center (the Indiana Pacers' Hibbert) to pair with LaMarcus Aldridge.

The Nets, meanwhile, couldn't just match Lopez's deal because that would have removed any remote chance they might have of trading him for Dwight Howard. Therefore, Lopez was able to talk his way into discussing a fifth year on his maximum deal, because otherwise, he would have signed one of the two other four-year offer sheets and torpedoed a Howard trade all by himself.

Meanwhile, Lopez is still the same player who played in just five games last year because of foot problems.

Maybe Lopez is an extreme case, but there are less drastic examples. Take Hibbert, for example.

In Hibbert's case, the Blazers, using the same logic they used for Lopez, signed him to an offer sheet. The Blazers went as high as they could on the offer, forcing Indiana into a choice between the lesser of two evils. Would they overpay Hibbert and be saddled with a max salary for sub-max production for the next four years, or lose their starting center for nothing and take a step back on the court after a promising year? They chose the former, because they knew that, after a half-decade of irrelevance inside their own market, it would have been devastating to lose their starting center, one they spent years and precious resources developing, and get nothing in return.

Meanwhile, Hibbert averaged 12.8 points and 8.8 rebounds in 29.8 minutes per game last year.

And why were the Blazers trying desperately to sign two less-than-elite centers? They have tons of cash, are potentially losing restricted free agent Nicolas Batum, have a star in Aldridge who won't love the team taking steps backward and must spend because a) the new CBA includes a higher "salary floor" (a minimum payroll amount all teams must spend) and b) the players are locked into receiving a portion of basketball-related income, whether player salaries add up or not.

In other words, nobody really had a choice to pay these guys. People often say that "nobody is forcing the Nets to give Lopez $61 million," but that's not really true. In most cases, whether it's an actual offer from another team or just the threat of an offer elsewhere, someone is going to give players like Lopez the money they want. It's just a matter of choosing between a rock (match the price, be saddled with a bad contract) and a hard place (don't match the price, let a core player leave, get worse in the short term).

As long as the maximum contract exists, there is no structural fix that is going to solve the "rock vs. hard place" dilemma. The Hawks, under a previous CBA, were caught in the same spot in 2010 with Johnson, which is how he ended up with his massive contract. Faced with the decision between 50-win purgatory and playoff trips with an overpaid Johnson and 35-win purgatory with no Johnson and an apathetic fan base, the Hawks chose the former. The only real difference is that Johnson's salary, by virtue of him being more experienced and an unrestricted free agent, was higher than Hibbert's or Lopez's.

Several years earlier, the Bucks, who will never attract a major free agent, were caught in the same spot when Redd hit the market. Rather than lose Redd to the Cavaliers, who chased him hard to be a running mate for LeBron James, the Bucks kept Redd on a deal he didn't deserve.

That's why I wish the NBA would stop over-regulating player salaries. In the economic world, the max contract is akin to a price ceiling, the kind you often see when you're trying to rent an apartment. Many areas have a maximum price for the rent a landlord can charge for an apartment, with the theory being that this is the only way to promote "fair business practices." However, while there's not one building owner jacking up the price for their tenants, there are also a bunch of apartments that aren't as nice that become more expensive simply because of "location." Not everyone can live in the nicest building with a capped price, so more people are forced to settle for living in buildings that aren't as nice, but still carry the inflated price tag landlords can charge. The demand at the regulated price therefore exceeds the supply.

Think about what happens in the NBA. The demand for a true superstar to lead a franchise is so high, especially in a sport where one player makes such a big difference. By setting a price ceiling, though, the league takes a product (the superstar) that is already in short supply and artificially caps its market value. The effect? A player like Johnson, who isn't nearly as nice an option as one like LeBron James, is now worth the same amount. The Hawks couldn't afford not to pay Johnson, because if they didn't, other teams -- operating with the same demand for a "superstar" and the same lack of supply -- would do it themselves.

In Lopez's case, the Bobcats, who have nobody who wants their money and little young talent to build around, decided that he was the equivalent of the apartment that might have rats in the basement, but is still in the nicest part of town. That forced the Nets, who had already unpacked half their stuff into a different new room in a slightly-nicer-but-not-the-absolute-best apartment, to settle for Lopez at his price. The Nets already unloaded the bed frame (Deron Williams), the flat-screen TV (Johnson) and the futon (Gerald Wallace), so it's not like they could find another place to live in NBA relevance-ville when it came time to bring in the dresser (Lopez).

That's how Lopez earns a salary that most people think is too high for the services he provides. It has nothing to do with what he actually does on the court.

In an ideal world, I think the NBA would be well-served to have no maximum player salary and a harder salary cap. Let LeBron make $50 million if that's what he's deemed to be worth and there's a team out there willing to commit 75 percent of its cap to him. Just know that, if James makes $50 million, it means there's much less incentive to pay Lopez and Hibbert the salaries they got. In a superstar's league, the superstars would make superstar money, while the non-superstars wouldn't.

The obvious concern, of course, would be the simple act of giving someone $50 million, but James is worth it, and since the players are guaranteed a percentage of basketball-related income independent of player salaries, the owners won't suddenly overspend on everyone. Salaries would therefore start to fall more in line with players' actual on-court importance. What a novel concept.

That day won't come, though, so we're stuck with Lopez and Hibbert as "max" players. As long as the current system is in place, we must borrow the immortal phrase from Ice-T: Don't hate the player, hate the game.

THREE TEAMS THAT GOT BETTER

Brooklyn Nets: They didn't get Howard and they willingly took on Joe Johnson's gargantuan contract, but they're significantly better than they were when free agency began. If you look at Johnson's acquisition as a prelude to keeping Deron Williams, you realize why it had to be done. The back-end of the Johnson, Wallace and Lopez deals will be painful, but owner Mikhail Prokhorov will surely use any salary-cap exceptions at his disposal to improve the team if need be. Plus, if Howard remains with the Magic past Jan. 15, the Nets may be able to get him anyway.

Los Angeles Lakers: They badly needed a shot in the arm, and they got it with the trade for Steve Nash. Nash alone may not put the Lakers over the top, but he brings them much closer to the promised land than they were a couple of months ago, when it appeared that Kobe Bryant's twilight would be wasted with a declining supporting cast.

Miami Heat: It's a scary thought, but with Ray Allen occupying the role that James Jones was supposed to fill, the Heat now suddenly seem impossible to guard. As for defensive concerns, if Mike Miller can function in the Heat's frantic schemes, so can Allen.

THREE TEAMS THAT STRUCK OUT

Dallas Mavericks: They lost out on Williams and Nash, forcing them to rent their cap space to Chris Kaman, and potentially others, for a year until they try again in 2013. The problems with that strategy: Dirk Nowitzki will be a year older, and the stars available next summer will surely note that none of the stars available this summer wound up in Dallas. Snaring Darren Collison from Indiana was creative, but it won't move the needle much.

Chicago Bulls: The Bulls processed the news that Derrick Rose will miss half of next year with a torn ACL and immediately shifted into cost-cutting mode ... just like they always do, because they're a big-market team with the highest profit margin in the league. Makes sense, right?

It doesn't, but this is always what the Bulls do, which is why they'll never be a serious Dwight Howard suitor even though things seem to line up perfectly for that marriage. This offseason, they've let critical bench players Ronnie Brewer and C.J. Watson go, and Kyle Korver might be next, all to save money under the luxury tax. Their replacement? Kirk Hinrich, who was last relevant when he last played on the Bulls.

Phoenix Suns: While inking Goran Dragic was a good recovery after losing Steve Nash, it remains to be seen if Dragic can maintain the level of play he produced at the end of last year over the course of a full season. If he can't, $8.5 million per season suddenly becomes expensive. Giving Michael Beasley three guaranteed years also seems like a pretty bad idea.

THREE GOOD VALUES

Lou Williams: Williams has plenty of flaws, especially defensively, but securing him for the mid-level exception represents an outstanding value for the Atlanta Hawks. He's an elite scorer off the bench, and is underrated as a playmaker and game manager. You're not going to find someone with his scoring ability who can be signed for less money.

Darrell Arthur: Two years ago, Arthur was one of the five best backup big men in the league, especially defensively. To secure him for three years and $9 million is a steal, even if he still has very legitimate health issues. The Memphis Grizzlies in general did a great job filling out a cheap bench given their financial constraints, securing below-market deals for Arthur, Marreese Speights and Jerryd Bayless to replace O.J. Mayo.

Brandon Bass: Bass really found a home with the Boston Celtics last year. Their mid-range-heavy offense takes advantage of his biggest strengths, and having Kevin Garnett around helps mitigate any damage caused by his so-so defense. He's significantly better for them than Glen Davis was, and he's getting the same money over fewer years.

THREE FAIR VALUES

Ryan Anderson: Anderson is the evolutionary Antawn Jamison: a hybrid forward who rebounds well and finds open shots through motion and superior pick-and-slip action, but can't really create his own shot and isn't that great defensively. The two players are not exactly the same, but their place in the hierarchy of a good NBA team is somewhat similar. At $8.5 million per year, Anderson can be your fourth-highest-paid player, and that's about where he should be in your pecking order. I'm a bit skeptical about how he fits in with the New Orleans Hornets, but the contract itself is the rare example of fair market value for a guy making more than the midlevel exception.

Ersan Ilyasova: The same kind of logic holds for Ilyasova, though his case is a bit trickier because there's a legitimate concern that his breakout season last year was a bit of a fluke. The Bucks were in the same kind of "damned if you do, damned if you don't" scenario as the Pacers with Hibbert, and they came away without overpaying Ilyasova too badly.

Jeremy Lin: It's impossible to place a financial value on Lin given how much he can make your franchise in marketing, so something slightly above the midlevel exception -- which is reportedly what the Houston Rockets will offer him, and what the New York Knicks will wind up paying him -- seems like a good gauge of his value.

THREE BAD VALUES

Jeff Green: If Green recovers from his heart ailment and plays at the level that he played at during his rookie year, he might be worth 60 percent of the contract he just got from the Celtics. But that rookie year was four seasons ago, and since then, Green has shown no growth, no elite skill and little potential besides being a decent backup. To pay him $9 million a year represents a huge, huge leap of faith by Danny Ainge.

Omer Asik: I know he's good defensively, but with the Rockets still in the Dwight Howard chase, why go after a center who has no offensive ability whatsoever and pay him more than $8 million a year? Similarly, if the Bulls match, why pay a backup $8 million when the starter, Joakim Noah, makes $12 million and you're reluctant to go into the luxury tax?

Landry Fields: Fields' choices are playing for Mike Woodson or Dwane Casey. Neither is Mike D'Antoni. The Fields we saw in the first half of his rookie year isn't coming back.

BEST OF THE REST:

O.J. Mayo: He is what he is -- a bench scorer -- but there's nobody better at filling that role on the market.

Courtney Lee: Teams with ball-dominant point guards should have the hots for Lee. He's tremendously efficient from his favorite spots and won't do anything he's not capable of doing.

Brandon Rush: He had a career year for the Warriors last year that I'm not sure he can duplicate, but versatile wing players who are efficient and can defend multiple positions are valuable.

Kris Humphries: He averaged a double-double last year, and while he doesn't have a history of doing much to improve team rebounding, you can't knock that kind of productivity on the glass.

Ramon Sessions: He's really not as bad as he showed in the playoffs for the Lakers. Put him on a good team needing someone to help create easy buckets, and he can be valuable.

Antawn Jamison: Still going strong at his advanced age, though any team that acquires him has to live with his inattention to defense.

Carl Landry: Struggled with injuries last year, but when healthy, he's an elite interior scorer with a good jump shot who is also tough as nails.

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