What have we learned from Free Agency?

Looking back is important. Particularly now that we have two weeks of free agency in the books and most teams are just about done building their rosters for 2019-20, reviewing the contracts that were signed this offseason can give us interesting insight into which positions and roles are valued the most by teams. It’s known that teams generally prefer wings and forwards to big men, but by how much? Are there inefficiencies in the market at these positions or others?

The two most important takeaways from this year’s free agent market are:

  1. Perimeter players continue to assert their dominance over big men, and
  2. The market value offense way, way more than defense. Well, maybe. We’ll get into that a bit later.

Using the six positions I laid out in my Positions and Roles explainer from May, it’s clear to see that this year’s free agent class continues a trend that has permeated the league over the last few years – perimeter-oriented players are becoming more and more valuable. I looked at the 85 players who have signed non-minimum deals through the first two weeks of free agency and among the nearly $3.4 billion across 235 contract years in these 85 deals, the numbers bear out the same ideas that most around the league are talking about with respect to team-building.

Wings and Forwards are the most valuable positions, both due to scarcity at those positions and the versatility of players that size. Anchors, on the other hand, are a dime a dozen these days, with their market value heavily reflected in that fundamental truth about the modern NBA. 18 Forwards signed non-minimum deals this offseason and those contracts average $16.99 million in annual value, while the 22 Anchors who signed non-minimum deals averaged just $10.38 million per year. Wings were up there with their slightly larger brethren at the Forward spot – they got paid an average of $15.91 million per year this summer.

Guard were closer to Wings and Forward than they were the big man positions. Points made out well, with an average of $14.47 million per season, just ahead of Combos at $14.01 million in average annual value. Stretch big men was a relatively scarce position on this year’s market, with just ten guys signing non-minimum deals. That scarcity and the added versatility of those players created a market in which they earned $13.75 million per year.

Purely from a positional perspective, it’s clear to see that that perimeter players, or players at the Stretch position who at least partially play on the perimeter on one end of the floor or the other, are far better paid than their larger compatriots at the Anchor spot.

However, the Anchor position itself is undergoing a bit of a transformation. So many pure centers are becoming stretch 5s these days that the clearest separation isn’t just between perimeter players and Anchors, but between Anchors who can space the floor and those who cannot. If an Anchor has the ability to shoot from outside and is designated in my database as a “Spacer” in one of his roles, then he earned a contract that averaged $14.72 million per season. If not, then that figure drops to just $8.83 million per season. Additionally, it’s worth reiterating that these figures do not include players who signed minimum contracts, which would only serve to tank the value of a non-shooting Anchor due to minimum contracts for players like Tyson Chandler, Kyle O’Quinn, and Nerlens Noel.

There were seven Anchors who were paid more than the non-taxpayer mid-level exception in 2019-20 salary: Nikola Vucevic, Jonas Valanciunas, Brook Lopez, Dewayne Dedmon, DeAndre Jordan, Al Horford, and Bobby Portis.

Among this group, Vucevic is a high-level scoring threat with some modicum of an outside game, Lopez, Dedmon, and Horford are all fully capable of spacing the floor, and Valanciunas was in a particularly good spot because of the Grizzlies’ particular financial situation and his ability to score the ball at a solid rate.

Jordan and Portis don’t necessarily fit the mold, though their outsized paydays can be explained through non-traditional means – Jordan’s four-year, $40 million contract came about essentially because he’s friends with Kyrie Irving and Kevin Durant and used to be good at defense, while Portis got paid by New York and there wasn’t much rhyme or reason to how the Knicks spent their money this offseason.

Breaking players into positions or roles brings about results that aren’t terribly surprising, but instead reinforce the notions a lot of us already hold. Big men aren’t nearly as valuable as perimeter players, unless they can shoot, at which point their value skyrockets back up. Shooting remains the most important individual skill a player can have in today’s NBA and the Shooter or Spacer role is essentially a pre-requisite for any player hoping to play rotation-level minutes for a contender.

Using Jacob Goldstein’s Multi-Year PIPM calculations, we can see which side of the ball the league prioritizes and how those priorities line up with how players were paid. Of the 85 players taken into account in the previous section, 84 of them will be featured here. The lone missing player is Kristaps Porzingis, who didn’t play last year and therefore is not in Goldstein’s 2018-19 PIPM database. Using Multi-Year PIPM is more representative of the player’s value than single-year PIPM for 2018-19, which could be skewed by small samples or a particular playing situation.

I broke out the 84 players into six groups across both O-PIPM and D-PIPM, which cover offense and defense, respectively: Superstar, Elite, Above Average, Below Average, Bad, and Horrible. Superstar players have an O-PIPM or D-PIPM more than one standard deviation above the average for this 84-player group. Elite players come in below one standard deviation but better than a half standard deviation. Above Average guys are below a half standard deviation and the average for the group. Below Average players rank between the average and a half standard deviation below that average mark. Bad players are between a half and a full standard deviation. Finally, Horrible players are more than a full standard deviation lower than the average.

The correlation between O-PIPM and average salary was incredibly strong at 0.773. Superstar offensive players made it out of free agency with an average of $33.05 million in annual earnings, with the numbers falling in a nice downward slope from there. The full table of earnings by O-PIPM tier:

O-PIPM Tier Average Salary
Superstar    33,047,908
Elite    17,330,758
Above average    12,517,634
Below average      7,668,192
Bad      7,623,940
Horrible      3,997,654

Again, this group includes nobody on a minimum contract, though the handful of players who graded out in the Horrible tier were very close to being on minimum deals.

Defense, on the other hand, had no such correlation and no real rhyme or reason to affect players’ ability to earn an equitable contract. The correlation there was essentially non-existent at -0.021. Teams didn’t value defense positively or negatively on this year’s market – they simply didn’t value it at all.

16 Superstar defensive players in Goldstein’s D-PIPM metric earned an average of just $12.06 million per season, compared to the $19.23 million per year earned by nine Bad defenders. The full table of annual earnings by D-PIPM tier:

D-PIPM Tier Average Salary
Superstar    12,060,984
Elite      8,990,826
Above average    14,701,925
Below average    14,252,210
Bad    19,230,926
Horrible    15,081,536

As you can see, defensive performance over the last few years in Goldstein’s metric had little bearing on the way free agency played out. Salaries are all over the place, with the two highest-earning tiers being Bad and Horrible and the two lowest-earning tiers being Superstar and Elite. The lack of positive or negative correlation along with these numbers show just how little teams seem to be thinking about defensive performance when building their teams and offering contracts.

Further grouping of players indicates the same idea – offense is more valuable than defense. Positive offensive players (Above Average or better) will be paid an average of $20.00 million per season on their new contracts, while negative offensive players (Below Average or worse) earned just $7.24 million in annual salary this offseason. Positive defenders, on the other hand, will earn $12.34 million per year, while negative defenders will make $15.41 million in average annual value.

For players who are skewed one way or the other, it was far, far better to be an offense-first player in the 2019 free agent market. Positive offensive players actually earned MORE if they were negative defenders as opposed to positive defenders. Negative offensive players earned more if they at least brought positive defense to the table, but the difference isn’t nearly as large.

Positive/Negative Offense/Defense Average Salary
Positive Offense/Positive Defense    17,211,894
Positive Offense/Negative Defense    21,729,250
Negative Offense/Positive Defense      8,000,168
Negative Offense/Negative Defense      6,457,975

Why the contracts this offseason were so heavily weighted toward offensive players is up for debate. The overall lean toward offense-first players would indicate that teams simply value offense above defense. However, that doesn’t quite explain why O-PIPM correlates so well with annual salary and D-PIPM is all over the place.

Does the league simply have better metrics for differentiating between offensive players and therefore can pay them accordingly, leading to the high correlation between O-PIPM and average annual salary?

Do the league’s internal defensive metrics not match up as well with D-PIPM’s view of the league, which leads to the massive dichotomies and lack of any real correlation between D-PIPM and salary?

Are some of the negative defenders by D-PIPM actually positive defenders who were paid as such this summer?

It’s certainly possible that the external measurements we have for offense, such as O-PIPM and offensive RPM, line up better with the intricate metrics each team develops and uses in their projections and negotiations. Offense is generally much easier to measure, which would explain why that particular correlation is so strong. Defense, on the other hand, is immensely difficult to measure, whether in an all-in-one metric like D-PIPM or statistics that measure individual aspects of a player’s defensive aptitude.

There aren’t necessarily definitive conclusions we can take from this second exercise, due to the unknown nature of the key all-in-one metrics teams are using to value defense in their contract negotiations. It’s a bit of a chicken-and-egg problem; are teams not valuing the right defenders according to D-PIPM or is D-PIPM not capturing something about defense that shows up in internal metrics used by teams? Without full knowledge of the internal metrics teams employ this time of year to measure potential additions to their team, it’s impossible to know if they simply just do not value defense and believe offensive skills are most important or if they have different internal metrics that line up well with the way players were paid this offseason.