Midway into the first day that free agents were allowed to negotiate with teams, multiple reports indicated — and Michael Heisley essentially confirmed to NBA Fanhouse's Chris Tomasson — that the Grizzlies and Gay had reached a verbal agreement on a deal that would pay Gay roughly $82 million over five years. The contact can't be signed until July 8th, but there's no reason to believe that this deal won't be consummated then.
What to make of this somewhat unexpected news?
The prevailing assumption — which I certainly shared — was that it would take a little while to achieve resolution on Gay's free agency, at least until the top tier of free agents got settled. Instead the team pounced, making Gay the first major free agent taken off the table.
Contrary to initial reactions, including my own, this was not like the Pau Gasol deal, where the Grizzlies maxed their own player out at the first opportunity. A true max deal for Gay would have been for six years and roughly $105 million, not the five year, $82 million deal he received. Instead, what the Grizzlies essentially did here was assume that Gay would eventually receive a max offer from another team (max offers from other teams could only be for five years and with smaller raises built on the same starting salary), and then offer Gay a contract that was slightly larger.
Rather than wait for a max offer from another team, then top it, the Grizzlies accelerated the process to what they felt would be the inevitable end game. In controlling the process rather than reacting to other teams, they were able to secure two desired elements to a contract they felt would be the same total amount regardless: One, they were able to structure the contract on their own terms rather than potentially have to match a front-loaded deal with a possible $20 million first-year hit. Second, they didn't allow Gay to be courted by other teams and then potentially feel resentful about the Grizzlies matching an outside offer he'd accepted. (I don't think either of these things are particularly crucial, but apparently Michael Heisley does.)
Were the Grizzlies correct to assume five years, $82 million was required to retain Gay this summer? Probably. (In retrospect, the Grizzlies would have been much better off "overpaying" with a five year, $60-$65 million offer last summer.) Gay's contract might look crazy, but on this first day of free agent negotiations, what contracts haven't? While there are other, unrestricted, small forwards on the market (after Lebron James, next in line are Paul Pierce and Richard Jefferson), given the amount of cap space teams have to spend and how freely money is being tossed around, Gay getting a max offer was probably a decent bet.
But I share the skepticism on the issue of the frontload threat expressed by NBA Fanhouse's Tom Ziller earlier this afternoon. With long-rumored Gay suitor Minnesota lacking the cap space to acquire Gay without a sign-and-trade and other suitors busy chasing Lebron, I'm skeptical that a frontloaded max offer was imminent. Until evidence emerges to the contrary, I'll believe the team may have over-estimated this threat.
Beyond that, why would the frontloaded offer be such a terrible thing? If I understand it correctly, any signing bonus another team could have attached to a contract offer would not change the overall amount of a contract and would only have a minimal impact on next season's luxury tax (with the amount of the bonus spread among each year of the contract for salary cap/tax purposes). It simply would have resulted in more money due up front, but however much Heisley may be concerned about the team's bottom line, being able to pay a few million initially rather than the same few million spread out over a few years shouldn't be that big of a deal. Really, it would just balance out the deferred money in Zach Randolph's contract. Unfortunately, that's not how Heisley thinks. It's the same impulse that drove him to take less arena naming-rights money overall in order to get it all up front.
Is He Worth It?
Even if you accept that this kind of contract was what it was going to take to retain Gay, the bigger question is whether he can be worth it. I say "can be" because he clearly isn't worth it right now. Gay is a very good player, but isn't currently as valuable as his scoring average suggests.
Last season, Gay was probably the third or fourth best player on a 40-win team and his production has been reasonably stable over three seasons, at a time when steeper improvement should have been expected. Gay made a major leap from his rookie to his sophomore season, but then regressed in year three for what I suspected at the time were largely environmental reasons. But last year, as I've written before, Gay responded with a rebound year instead of a breakout.
Gay made small but not insignificant strides with his offensive aggression and defensive performance last season. He's a strong scorer both in isolation and as a finisher in the flow (though the later has not been exploited or encouraged nearly enough), but is not a dominant scorer and does not involve his teammates enough. Gay can — and must — improve offensively to earn this contract, but his mediocre ball skills will put a ceiling on how much better he can be.
Rather, the key to Gay being worth this contract — or anywhere near it — lies off the ball, in his rebounding and, more significantly, his defense. Gay has the athletic ability to impact a game in many different ways, but has so far lacked the focus and will to do so. Will the demands of a big contract push him or foster more complacency?
As I wrote a couple of days ago, Gay is currently a third-tier player, but he's a third-tier player with the raw ability and youth to still make the leap into the second tier, where a contract like the one he's about to receive would be justified. So this deal could turn out okay for the Grizzlies, but the odds are probably against it.
Were Other Options Explored?
Though I don't really agree with the alleged downside of letting the free-agent process play out, I'm reluctantly persuaded that it's unlikely the team would have been able to sign Gay for something less than this seemingly insane contract.
But even if this was the best the Grizzlies could do in retaining Gay, there were still two other options: Letting him walk or pursuing sign-and-trade options.
I don't like the idea of letting Gay walk, but my preference would have been to look at sign-and-trade scenarios, and the quickness with which the team acted and the decisiveness with which Michael Heisley loudly insisted he would keep Gay suggests that option was never seriously explored.
The Grizzlies were never going to get close to equal player value in a sign-and-trade, but given what it took to retain Gay, I think getting a more affordable small forward option in return, keeping Ronnie Brewer, and giving the team an easier path to keeping Marc Gasol, O.J. Mayo, and, potentially, Zach Randolph might have been a more sound plan.
But it's done now. In the next posts, I'll look at how this signing might impact the shape of this season's roster, and then look ahead to how it might impact more long-range planning.