Front-loaded Contracts- Rebuilding the Wizards part 2

Most contracts start out with a lower salary per year and move upward the length of the contract. When a team is playing for a top tier championship or when a team expects the salary cap to increase, this is a logical determination. However, when a team is rebuilding and has extra cap room, it make sense to front load a contract. For example, let’s say that the Wizards decide to retain Shaun Livingston for roughly 10 million over 4 years. That’s an average salary of 2.5 million per year. The typical structure for a contract like this would be 2 million, 2.25 million, 2.5 million, and 3.25 million. Instead, the Wizards should massively frontload the contract along the lines of 6 million, 2 million, 1 million, and 1 million. First, by frontloading the contract, the contract becomes dramatically more valuable as it progresses. A player who deserves roughly 2.5 million a year is a steal in the later years of the contract since he’s making far less. This allows a rebuilding team to trade away that contract for more assets as it tries to rebuild. Alternatively, the player can be kept by the rebuilding team, because his frontloaded contract doesn’t cause problems for the team when resigning its rookies in the future. Second, a team which frontloads has more cap room in the future, which means it’s easier to add talent. In the later years, the team who frontloaded a contract can take advantage of its saving later. Any year a team fails to use its entire salary cap is a waste of a space. Teams should maximize their cap each year and pay in advance for as many things in the future as possible. I think some front offices are reluctant to maximize their cap room for a team that isn’t very good. This is an incorrect view of the salary cap dilemma. Instead, teams should realize that by filling up their salary every year, it allows them greater flexibility in the future. For example, several of the current contracts are predicated on the notion that the salary cap was going to expand every year. This was incorrect for this season and likely for next season. Since a team can not know what the salary cap will be, it’s better for them to take a risk adverse position and assume it will be lower in the future.

The only problem with a front loaded contract come into play when a team 1) wants to take on salary during the season 2) the use of team options to give greater control. 3) the danger of a player become dissatisfied if he “blows up” during the later years of a front loaded contract. I’ll address each of these.

One of the arguments against frontloading a contract is that teams want to be able to take advantage of their cap space later in the season. Many teams discover they are not as good as they thought and know want to get under the salary cap. However, this is a relatively rare circumstances. This majority of teams dump their salary earlier, usually at the draft. Also, most teams will hold on to those contracts unless they’re not a playoff team.

Second, a lot of people would argue that the use of team options are preferable to a frontloaded contract. However, these are not mutually exclusive. A contract can be both frontloaded and contain a team option. In fact, the team option is likely to less contentious if it occurs in the later years of a front loaded contract. Nevertheless, it is true that a frontloaded contract.

Third, some people would argue that a player with a frontloaded contract may become dissatisfied if he outperforms his contract. A player in that circumstances will feel that he earned his dues during the year he received a 6 million dollar, and his current salary is not appropriate given his level of play. However, while this is a concern, this could occur with any player who outperforms his contract. Additionally, there is nothing to assume that a player who gains a huge contract at the start of his contract might not develop more loyalty during his initial year.


In totality, most of the objection to frontloaded contracts are either exaggerated in their harms, and the benefits greatly exceed the harm. Teams should seek to maximize their salary cap every season when they are rebuilding in order to not have to waste cap room in years when they’re actually competing.

Rebuilding the Wizards- Part 1: Trash for Treasure

With a lot of cap room next season, some people are discussing the Wizards offering a max contract to one of the premiere free agents. I think that would be a mistake. Several players who may generate max contracts next season, while top players, are not worth that amount of money. Given the Wizards prior problems and smaller media market, it’s unlikely that say, Dwayne Wade is selecting Washington over Chicago, Miami, or New York. Therefore, the Wizards, if they sign a player to a max contract are likely to sign a player who is not worth it. Given these restrictions, I think the Wizards should take a different approach: Be a contract dumping grounds.

There are several teams who are looking to create cap space for this current crop of free agents. Many of these teams are a contract or two away from being able to offer a max or two max contracts. By taking their draft picks as well as their bad contracts, the Wizards will create a more stable long term talent pool.

Here are some “good” bad contracts, which the Wizards could take.


1. Predraq Stojakovic, 15.3 million, expiring contract
Why we’d take it? Stojakovic can still hit an outside shot. He’s not durable, but he’s not a terrible asset for the team. He’d basically fill the role Mike Miller has this season.
What they’d make the deal? The New Orleans Hornets have 73 million in committed salaries for next season. The luxury tax will be around 65 million, so this gets them under that amount.
Possible Draftees for the Wizards: The Hornets are projected to have the 12 pick in the draft. Players who should be available include Xavier Henry, Donatas Motiejunas, and Patrick Patterson.

2. Andrei Kirelenko- 17.8 million next year, expiring contract
Why we’d take it? The Jazz are in a great position because they have New York’s first round pick this season. A.K-47 is a still a good defender. Alongside Blatanche, he’d give the Wizards great height in the front-court. (6’9’’ AK, 6’11” Blantanche, and 7’0 McGee).
Why they’d make this deal? Clearly this would put the Jazz in a great position to resign Carlos Boozer or perhaps sign Chris Bosh instead. Alternatively, they’d be able to offer a maximum contract to Joe Johnson, and play Millsap at the PF instead of Boozer. Their starting line-up would be Williams-Johnson-Miles-Milsap-Okur. A few crafty signings of aging veterans could net the Jazz a return to the finals for the first time since the days of Malone.
Possible Draftees from this deal for the Wizards: The pick from New York i projected to be the 9th selection. This could give the Wizards such players as Wesley Johnson, Greg Monroe, and Jan Vesely.

3. Erik Dampier 13 million, expiring contract
Why we’d take it? Besides the fact that we seem to really enjoy trading with the Mavs, Dampier is a solid center, but not worth his 13 million contract. The Mavs would need to purchase a first round pick to make it work, however, Mark Cuban likes to spend money. It might make more sense for us to just buy the pick from another team, given the large size of the contract. The other benefit for us would be the trade exception this would generate.
Why they’d make this deal? They’d like to resign Brendan Hayword. Dirk also can opt out this season. They’re also horribly over the luxury tax next season.
Possible Draftees from this deal for the Wizards: Impossible to project since the Mavs would need to purchase the draft pick.

4. Kirk Hinrich, 9 million 2010, 8 million 2011
Why we’d take it? When the Bulls agreed to give the Bucks the right to swap picks, this deal became a lot less enticing. However, Kirk Hinrich still has some game left in him. He’s got good range and court awareness. He also is a dedicated, though declining defender. The problem with his contract is its two year length. However, given the amount of cap space we have, we can afford to a hold a bad contract.
Why’d they make this deal? Chicago is trying to clear enough room to lure Chris Bosh or Dwayne Wade to Chicago to play alongside Derrick Rose. This would create a devastating two-some and a top tier team in the East.
Possible Draftees from this deal for the Wizards: Given the swap with the Bucs, this pick will probably be around 18. Based upon draft express, the following players would be available.: Hassan Whiteside, Larry Sanders, James Anderson, and Gordon Hayward. If the Bucks decline to exercise this option, the pick would probably be around 15. This would leave players like Damion James, Xavier Henry, and Stanley Robinson.