Those who felt Eric Bledsoe should take the Phoenix Suns' standing offer -- four years, $48 million -- liked to crow that the market had set the point guard's price. Teams with ample cap space didn't offer it to Bledsoe; teams without cap space weren't willing to part with key assets in a sign-and-trade. As July tumbled into August and August slipped into September, the market worked. Bledsoe was not finding any team that would or could give him the maximum-value, four-year, $63 million deal he desired.
As training camp approached, it seemed as though the Suns had won. They had leveraged the market to push Bledsoe into taking their offer or risking it all with a paltry one-year qualifying offer. Phoenix, strong-willed and refusing to overpay, was victorious.
Until it wasn't.
On Wednesday, the Suns gave Bledsoe $70 million over five years, fully guaranteed. It's not the max Bledsoe wanted, but it's $2 million per year more than Phoenix had previously offered, with an extra guaranteed year on top. Indications are that Bledsoe will receive $13 million next season with annual $500,000 raises; his max would have started at $14.75 million (per Amin Elhassan) and increased about $1.1 million each year, so he's leaving just about $15 million on the table. Which is a lot better than leaving $37 million on the table, which he would have done under Phoenix's original offer. Which many Suns partisans insisted was the best deal he could get.
This isn't a loss for the Suns, who now have a fringe All-Star on the rise locked up for five years. (The lack of player options in the deal means Phoenix doesn't have to worry about losing Bledsoe until 2019. That's a real concession by Bledsoe.) But this result is a loss for the idea that the market rules all in the NBA. The truth is the market is so convoluted by artificial limits on supply and demand and transactional restrictions that it's barely a functioning economic system at all.
Consider this: The "market" said that Bledsoe could not get a better offer than Phoenix's $48 million. We learned this over the course of almost three months in which just about every other NBA free agent got a deal. Yet because of fear and other factors in play, Phoenix blinked. And Phoenix blinked hard. That was a $22 million blink. When a franchise is willing to ignore what the market says to the tune of $22 million in guaranteed pay-out, the market might as well not exist.
Why did Phoenix blink?
- The Suns probably never intended to stick at $48 million. That was a nice line in the sand the team apparently held for a long time, but all demands are negotiable. (Like Bledsoe's max counter.)
- The threat of Bledsoe taking the qualifying offer became a little more real when Greg Monroe, the most high-profile QO signee ever, went that route. Had Bledsoe rolled the dice with the QO, the Suns faced having both Bledsoe and Goran Dragic as unrestricted free agents next season.
- The Suns at some point (likely long before Wednesday, possibly in July) realized that a couple million dollars per year and a fifth year guaranteed wouldn't hurt more than would losing Bledsoe as the franchise rises.
That's why the market is a mirage: the market set Bledsoe's 2014 price at $48 million over four years, but the team offering that gave him tens of millions more in the end because of external factors. With such limited supply and such convoluted demand, and with such odd transactional restrictions (like the concept of restricted free agency itself), the NBA is the opposite of a free market.
So, the next time a star struggles to find a deal in free agency, it's not the market setting a price. Market reaction in this system actually means very little, because it's not remotely an open market. Remember that ridiculous open letter to Bledsoe written by Arizona radio personality John Gambadoro?
Ask around, Eric. Talk to players in the league, teammates, former teammates, coaches and assistant coaches that aren't based in Phoenix. You will be hard-pressed to find ONE that doesn't believe the offer that Phoenix has on the table for four years and $48 million is an awesome offer. Trust me, I know. Because I have made those phone calls, dozens of them. And everyone that I spoke with thinks you're borderline nuts for not jumping at this offer and giving yourself financial security for life.
Borderline nuts, huh? Don't fall into this trap, fans and analysts. This isn't a swap meet or a used-car dealership. Simple economic thinking doesn't apply because this is no simple economic system. The market, such as it is, is basically irrelevant in the NBA.