Dwight Howard is sitting out most of Los Angeles Lakers training camp while he recovers from surgery to correct a herniated disk in his back. Andrew Bynum has been shut down by the Philadelphia 76ers for three weeks as a "precaution" after undergoing a plasma-rich platelet injection in one of his surgically repaired knees. Stephen Curry is back on the court, but in limited duty, as the Golden State Warriors take measures to protect his troublesome right ankle.
Besides dealing with injuries and each being one of his team's premier players, Howard, Bynum and Curry have something in common: They are all due for some type of free agency at the end of the season.
Since the new collective bargaining agreement went into effect last winter, the decision to wait until the end of the season to sign a new contract, rather than sign an extension early, has been a no-brainer for impending free agents. Free agents who re-sign with their current teams can get more money for more years than those that sign before they reach free agency, making it a fool's errand for any player to sign a preseason or midseason extension, no matter how much he intends to stay with his team.
So far, this approach has worked out wonderfully for most star players. Deron Williams opted not to re-sign with the New Jersey Nets in-season, waiting until the team moved to Brooklyn this summer to ink a five-year maximum contract. Players like Chris Paul, Josh Smith and Paul Millsap have chosen to go the same route this season in hopes of landing a maximum deal — both in dollars and years — next summer.
Yet some players, particularly those who recently changed teams, as Howard and Bynum did, do face a level of risk with this approach. A freak injury could lessen a player's value almost immediately, of course, but existing injuries are worrisome things for teams handing out multiple millions of dollars.
First, let us lay out the rationale against a player signing an extension, using Howard as an example. By playing at least three years with the Orlando Magic without clearing waivers or changing teams as a free agent, Howard qualified for the "Larry Bird Exception" under the CBA. When the Lakers acquired Howard in August, they also acquired his Bird rights, which qualify Howard for a five-year deal worth a 7.5 percent raise annually if he waits to sign a new contract with the Lakers next July.
If Howard signed an extension with the Lakers today, he would still be eligible for 7.5 percent yearly raises, but he could only receive four years — including the season remaining on his contract. The result is therefore a net loss of not one, but two seasons for Howard, since he would only be able to re-sign with the Lakers for three years beyond this one. (The listed maximum salary for a player with Howard's service time for 2012-13 is $16.4 million, but because of a stipulation that the first year of a free agent's new contract cannot be less than 105 percent of his previous salary, Howard would make at least $20.5 million in the first year of his new deal.)
Now that we have laid out why it makes sense for Howard to wait until the end of the season to sign, we have to acknowledge the elephant in the room. Howard's back was obviously in rough shape when he tottered off the court in Philadelphia on April 7. He was in the worst pain of his life, he said, and he did not appear in another game for the Magic. Howard has been remarkably durable in his career, having missed only seven games in six years entering last season, so there is reason to assume he will recover from the offseason procedure and be ready to play in at least one or two preseason games, as he has promised.
Yet for anyone who remembers the swift decline of Vin Baker or Shawn Kemp, Howard's waiting game is at least a little perilous. Good will abounds between Howard and the Lakers at the moment. The Lakers would no doubt love to sign Howard to an extension now, as would the Sixers with Bynum, not only to provide stability but because L.A. general manager Mitch Kupchak and Sixers president Rod Thorn likely are still a little bit drunk with excitement over their big trade. The teams have not had a chance to see the players' maladies close-up, and a season's worth of seeing Howard or Bynum make regular trips to the trainer's room could dampen that enthusiasm.
Even if a serious injury sidelined either player for most of the season, some team will probably toss a maximum contract his way next offseason. Less than two years after crying poor during the lockout, an owner would figure out a way to coerce his front office in to using the team's cap space on damaged goods. Howard, Bynum or any other player could still be leaving money on the table, however, because if they sign with a team other than their own, the maximum allowable contract decreases to four years with a 4.5 percent yearly raise. Plus, the new team would not own their Bird rights, so the team could not exceed the salary cap to sign them.
If we were the agents for Howard, Bynum or Curry, we probably would advise our clients to do exactly what they are doing. Suffer through your multimillion-dollar deal for this year, we would say, and expect a mega-multimillion-dollar deal next year. But keep in mind that this is still professional sports, where a player's sole asset is his body, and that risk always exists — in some players more than others.
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(Info on the collective bargaining agreement and player contracts come from Larry Coon's NBA Salary Cap FAQ and ShamSports, respectively. The calculations are mine.)
