The Effectiveness of Expiring Contract Teams

This past season featured a trio of teams who took a unique approach to team-building: loading up on expiring contracts to remain competitive while also clearing cap space to re-tool in the offseason. Dallas, Atlanta, and Utah all attempted to have their cake and eat it too.

The goal of staying competitive saw mixed results. Of the three teams, only the Hawks made the playoffs, and only then in the notably weaker Eastern Conference – their 44-38 record would have landed them 9th in the West. Dallas and Utah hit the finish line with mediocre records as well, but they were both in the playoff hunt until the last weeks of the season.

In the offseason, the results have been mixed at best.

Dallas struck out on big names for the second year in a row when Dwight Howard chose to go to Houston. Instead they have had to settle for a bevy of guards whose value is questionable. Jose Calderon is a solid point guard, but he is wildly overmatched defending quicker players, and the Western Conference is full of them. 4 years and $28 million was simply too much for too long for him at this stage in his career. Monta Ellis is overpaid as well, his defense is weak, and he is inefficient offensively.

The Mavs also missed in their pursuit of Andrew Bynum, and are now holding out hope that they can land Greg Oden, who last played in 2009. Even if Oden can give them 25 killer minutes a night this team isn’t going farther than the second round – and this is Greg Oden we’re talking about – it’s questionable that he’ll ever be able to play.

The Hawks may have had the most successful offseason of this group, especially in the short term. They managed to sign Paul Millsap to a 2-year, $19 million deal that leaves the team with cap flexibility. Compared to the 4-year, $56 million contract departed forward Josh Smith got, Millsap is a steal. He may offer only 85% of Smith’s value, but he does it for 70% of the cost. Jeff Teague was also brought back on a reasonable contract. Still, this is a far cry from the goal of teaming up Howard and Chris Paul.

Finally, Utah took on over $20 million in expiring contracts in a trade with Golden State, all of which netted the Jazz a couple of future first round picks, in 2014 and 2017. The 2014 pick will likely be in the 20’s, given that the Warriors used their additional cap space to acquire Andre Iguodala. Iguodala will, despite the risks associated with him, be a great fit with Golden State. Through a trade Utah did pick up first-rounder Trey Burke, potentially completing a talented young five man core with Alec Burks, Gordon Hayward, Derrick Favors, and Enes Kanter.

So was the expiring contract approach a reasonable strategy? Is there really any value in trying to maintain maximum cap flexibility?

Both Utah and Atlanta have doubled down on the short contract/flexibility strategy to an extent, hoping to stay competitive while seeking out ways to improve without committing long term salary. Dallas has attempted to take whatever the market had to offer with the hope that enough offensive firepower at guard will provide Dirk Nowitzki the help he needs to make the playoffs.

On the other hand, the aforementioned Golden State Warriors have managed to become something of a free agency destination, almost by pure force of will. They sold off enough in current contracts to make a run at Howard, ending up instead with Iguodala. Having an exciting group of young perimeter players helped, but a willingness to force their way into the picture overcame a lack of cap space or general flexibility.

Cap flexibility is still important, but winning is a great draw. Even that isn’t always enough to lure talent – just ask Mark Cuban. In the current NBA, with shorter contracts, there are always ways to clear space. The bigger problem is convincing players that a franchise is worth playing for. That’s something that Dallas, Utah, and Atlanta still need to figure out.