Facts, Figures and Opinion on John Wall’s Potential Max Deal with the Wizards

Apr 9, 2013; New York, NY, USA; Washington Wizards point guard John Wall (2) gestures during the third quarter against the New York Knicks at Madison Square Garden. Knicks won 120-99. Mandatory Credit: Anthony Gruppuso-USA TODAY Sports

By now you’ve probably heard or read in multiple reports that Washington Wizards guard, John Wall, thinks he’s a max player. You may have also read that he would be hurt if he wasn’t offered a max contract from the Wizards. And if you’ve seen all of this, then you’ve certainly seen or heard the report that the Wizards plan on offering him a max extension as early as this July.

While the thought of Wall thinking he was a max player was laughable to some people in early March, it has since become plausible, if not expected given the way he ended the season. I think for this franchise, giving him the max contract is warranted. He has been the face of the franchise from the moment he was drafted – the full red carpet treatment. No really, he was literally given the red carpet treatment from his first visit to town after the 2010 NBA Draft. It has been a bumpy ride for him, but fans (and the franchise) finally started to see some of the star potential everyone thinks and hopes he can achieve.  I know the thought of paying/rewarding Wall before seeing the consistent production is scary given past failures (there have been a number of names over the years, but most recently, see Blatche, Andray), the relatively small sample size of stellar play and the fact that the Wizards haven’t won 30 games in a season since 2007-08, but I think this is different. I get every impression that Wall wants to be great, works hard at getting better and takes his craft seriously. I believe that the success that he tasted will motivate him to continue to get better, not get paid and rest on his laurels.

I understand that he represents a different type of star from the team’s immediate past. His jumper, ballhandling, and other aspects of his game are all works in progress, but you would be remiss to not admit to have seen improvement. It is apparent in how much better the team played when he played versus when he was out, but also in his individual improvement, particularly in the last two months of the season, when something clicked with either his confidence, health,rhythm, or some combination of the three.

The notion that Wall has improved is supported statistically. Using data from basketball-reference.com, Wall averaged 20.4 points per 36 minutes, with a PER of 20.8 (ninth in the league among guards) in 49 games for the 2012-13 season. Wall’s field goal and true shooting percentages were up to 44.1 and 52.1, respectively. These are up from 40.9 and 49.4 in his rookie year and 42.3 and 50.2 in the 2011-12.  His assist percentage was fifth best in the entire league at 43.9%. His turnovers, long an issue, were down to 15.3 per 100 possessions. His three point shooting is still awful, and his rebounding numbers were down slightly, but it is clear that Wall showed noticeable improvement.

I can see the argument that from a goodwill standpoint the Wizards have to offer Wall a max contract. He’s fought through the worst of times with the franchise. They’ve built the roster completely around him, he’s finally starting to find his niche as a player, and you’d have to think he’ll continue to improve. He’ll have just turned 23 by the time the 2013-14 season begins, and he and Bradley Beal have the makings of a dynamic backcourt for years to come.  I think even before the surge at the end of the season, many Wizards fans, right or wrong, me included, expected the team to offer him a max deal. Now that a max offer seems a foregone conclusion, the question is: How much will all of this cost?

The salary cap structure in the new CBA is pretty intricate. As always, Larry Coon’s NBA Salary Cap FAQ is the source for most of the language here. I also used an NBA.com article from December 2011 on the ratification of the new CBA to verify salary increases, and I used ShamSports.com to verify some of my calculations. For the rest of the post below, let’s use the assumption that the salary cap is $58.044 million. This is obviously subject to change, and probably will, but let’s just start here, because I have no clue on what the new cap number will be, or if it changes at all (By the way, the cap has been flat since the 2010-11 season).

The first thing to realize with max contracts is that they certainly aren’t all created equal. John Wall would be eligible for the max contract for a player that has been in the league for six years or less. There are exceptions to this, but he has not met hem, so let’s move forward. A team that signs its own player to a max contract can offer up to five years. This makes the max contract for Wall approximately five years, $78.6 million, give or take.

(WARNING: NERDY NUMBERS ALERT! NERDY NUMBERS ALERT! The next two paragraphs get DEEP into the abyss of calculating figures. Skip the next two paragraphs if you don’t much care about the math behind the totals.) 

A max contract starts with a base year (first year) salary. The language of the 0-6 years of service max says that the base year salary can be up to 25% of the salary cap. However, as quoted from Larry Coon,

They use a different cap calculation to determine the maximum salaries, which is based on 42.14% of projected BRI rather than 44.74%.

At the risk of getting TOO deep into the woods, the 25% of the cap figure is based on $54.671 million, not the $58.044 million. So this makes the base year salary $13.669 million.

A team that signs its own player to a max contract can offer up to five years. The offer starts with the fixed base year, as referenced above, and an annual salary increase of 7.5%. This would make the year two salary $14.694 million. After year two, the verbiage gets quite misleading. If you’re like me, when you read “annual salary increase”, you think that this means the player gets a 7.5% increase from the previous year’s salary each season. Not the case. Actually, the dollar difference between years 1 and 2 is carried forward to the other years of the contract (See chart below).

So that’s the deal. Basically it’s Russell Westbrook’s contract. Keep in mind that there are other options to factor in here. The above contract assumes that the Wizards list Wall as their designated player, part of a rule with the new CBA that states that only one player per team can receive a five-year extension. Is Wall our “designated” player? What about Beal, when his deal is up for extension? If I did this correctly, if Wall signs the four-year max instead of the five, the contract would be approximately four years, $60.8 million (See chart below).

If offering less than a max, or maybe even a four-year max could potentially hurt Wall’s feelings, then the next option could leave him absolutely distraught. The next option, which may or may not be seen as callous, is to not offer an extension at all this summer, wait until the end of next season, and put out the qualifying offer that would make him a restricted free agent. This would let the market set his value, and would allow the Wizards to match any offer should he sign one with another team. This happened last summer with Eric Gordon and Roy Hibbert, where Phoenix and Portland, respectively, signed them to offer sheets, and New Orleans and Indiana matched. Why is this advantageous? Well, a 0-6 years of service max contract from a team other than the Wizards can only offer up to four years, with the annual increase figure at 4.5%. This brings the total for this contract to about four years, $58.4 million (See chart below). On the other hand, Wall could take offense to this and there be short-term acrimony between he and the team. Hey, it’s a business, right? I don’t expect any of this to happen though.

A lot to consider and a lot to digest. I think if the Wizards and Wall agree to a max extension in July it wouldn’t kick in until the 2014-15 season, but I’d like to make sure of that. The team’s books are in pretty good shape after this season, with the big contracts of Emeka Okafor and Trevor Ariza expiring. At least one of the two could be back with the team after next season, but certainly not at their current respective rates. Nenê is still owed $13 million over each of  the next three years, and there is a decent possibility that the Wizards re-sign Martell Webster, though I believe the most the team can offer him is the full mid-level exception (four years, $22 million). I think I’ll write a post on the team’s salary cap situation in the coming weeks. There are a lot of contract decisions that will be coming to a head soon. Either way, the future of the franchise revolves around John Wall.