Why the Splitter and Ginobili contracts make perfect sense
At first glance, the line causes the typical fan to react as if they’d just opened a half-full milk jug that had expired the month before: Tiago Splitter — the Spurs’ starting big man that had been rendered ineffective in the NBA Finals — signed a deal that would net him $9 million per year on average over the next four years.
We’ve all seen the ridiculous proportions an NBA contract can reach; even a contract like Splitter’s still garners this type of reaction. Players in this league make more money on average than any other professional sports league, so this type of deal really shouldn’t cause anyone to bat an eye.
Still, for a certain group, the worst was soon to come.
News followed soon thereafter that Manu Ginobili had re-signed with San Antonio for two years and more than $14 million. Even at half the salary from the previous year, there was subdued but palpable uprising within the “Manu should retire” crowd. Those who felt Ginobili’s contributions were worth no more than the veteran’s minimum couldn’t believe the Spurs dipped as far into the money pot as they did to secure the 36-year-old shooting guard for another two years full of missed shots and inexcusable turnovers, at least in their minds.
But the reality of the situation is quite different. To the Spurs, both players are worth every penny of the contracts they just signed, and there was a science to the negotiations that spawned the contract’s details.
Tiago Splitter and “market value”
San Antonio’s free agent path was made clear very early in July’s moratorium period, and Splitter’s contract would be the first domino to fall in the sequence of events. His Finals disappearance was fresh in mind at the time, while his series against Memphis had all but been forgotten outside of that organization. And the memory from Miami was that he could barely stay on the court.
Discussions of his monetary worth varied greatly depending on who you talked to, and there were questions of his potential effectiveness outside of the Spurs’ pick-and-roll offense. Splitter fit in quite well with San Antonio last season, and general manager R.C. Buford made a point to highlight the synergy that was obvious between Tiago and his teammates, both on the court and culturally.
In a vacuum, Splitter’s set of skills might not be worth $36 million over four years to another team. He’s extremely limited with his back to the basket and he has yet to show any shooting range thus far in his career. But what he does do well — he’s very smart in the pick and roll and plays good individual defense — greatly benefits the San Antonio frontcourt. For the Spurs, he’s easily an above-average big man who continues to develop defensively, which is a precious commodity in today’s NBA. Most importantly, a skinnier Tim Duncan no longer has to fight the opposition’s best post player as his body continues to age.
There was reported interest from several teams outside of San Antonio, and given Splitter’s restricted free-agent status, the Spurs were at the mercy of the market’s value for their starting center. But no offer sheets were signed. In fact, folks around the league said there was a great deal of hesitation when it came to paying the price on the Tiago tag. Once the market set his value at the $9-10 million-per-year range, he belonged to the Spurs. Both sides made their intentions clear: Splitter wanted to stay in San Antonio and the team wanted to keep him there. Even if a team had made an offer in the same ballpark, it was probably a waste of time, and nobody wants to spend eight figures on a player that comes with some doubts.
Negotiations between Splitter’s camp and the Spurs began almost immediately, reports indicated. The two sides acted quickly, working out the details the morning of July 1. When the NBA’s moratorium period began, the Spurs’ plan unfolded before even a few days of free agency could pass.
Privately, Buford indicated after the draft and before the start of free agency that the Spurs had options in front of them. He hinted that, outside of acquiring Dwight Howard, San Antonio could potentially pursue basically anyone on the market if Plan A failed. But the team never got that far. With the immediate movement toward re-signing their own players, it was clear they never had to resort to a Plan B.
Given the cap holds in place for Splitter and Ginobili, any movement toward outside free agency would’ve involved the renouncement of one or both of their contracts considering the money in play. The kind of impactful free agent that would have made the loss of Splitter or Ginobili, or both, worth the Spurs’ while would’ve easily cost San Antonio north of $10 million. Not just that, but they would’ve been risking breaking up a team that nearly won an NBA title to chase the unknown. Free agency is far from a certainty, as we’ve seen many examples of in the past, and the Spurs are notoriously reluctant to mess with anything that works. What a crazy concept.
Still, the question remained: Is paying Splitter that kind of money more palatable than using the cash to chase a potentially more impactful free agent? Considering the most likely result that would’ve come from a salary-cap cleanse, and barring any lucky haul of a huge name, the answer for San Antonio was “yes.” And much of that has to do with the luxuries the collective bargaining agreement affords teams that use their cap space.
In order to clear the type of space necessary to pursue a Josh Smith or Andre Iguodala — just to throw out a few arbitrary names — the Spurs would’ve had to make several moves that would’ve eaten into their depth. Any combination of losing Splitter and/or Ginobili, amnestying Matt Bonner or using the stretch provision on Boris Diaw (which apparently wasn’t going to happen anyway) would’ve been a necessary course of action, all to bring in just one big name or two second- or third-tier players. This sort of change wasn’t worth it to San Antonio when it could have the full mid-level exception at its disposal by using all its cap space.
And the details of Splitter’s contract is telling in that regard. The Spurs front-loaded the deal, which has them paying the big man $10 million next season. Not only was this the first step in surpassing the salary-cap ceiling, but it also makes the contract more friendly down the road. By the time the 2016-17 season rolls around, the Big 3 era will be over (we think, at least), and the Spurs will almost certainly be utilizing the space available to them. A 32-year-old Splitter at $8.25 million in the final year of his contract will by no means limit the team’s flexibility with all the money set to come off the books.
*As the team currently stands, Splitter is the only player under contract for the 2016-17 season. Kawhi Leonard will almost certainly be given an extension by then, however.
So, with the Tiago negotiations out of the way, the next step in the process was simple. But the re-signing of Ginobili caused the biggest stir locally.
Manu Ginobili’s final contract
San Antonio’s sixth man said at last year’s media day that he had no plans of calling it a career after the 2012-13 season. By the time Ginobili walked off the podium following Game 7 of the Finals, his tone was decidedly different.
The toll of both his play and the criticism cast in his direction had him understandably unsure of his future, despite not being as bad as many made him out to be. There’s no debating he had a down season, as well as some of the worst games and worst moments of his career — the eight turnovers in Game 6 and the four fourth-quarter turnovers in Game 7 — but he still had value when it was all said and done.
Ginobili’s PER of 19 was still third best on the team, a statistic Buford referred to directly after the signing, and despite a down shooting year still salvaged a true-shooting percentage (56 percent) better than that of Tim Duncan. But it wasn’t the final numbers that had folks doubting his future, it was the frequent lack of judgement that seemed to haunt him at times last season.
Always the Spurs’ wild card, Ginobili’s risky shot selection and passing are a staple of his that have resulted in many more favorable outcomes than negative ones. But oftentimes it was his underrated athleticism that allowed him to take said risks and compensate for them when ineffective. At 36 years old, his body no longer allows it. Physically, this is no longer the Ginobili of old, and it’s going to take a concerted effort to play within limits that have never restrained him in the past.
Still, the financial planning tells you the Spurs aren’t taking much of a risk re-signing him at his new price. Much like Tim Duncan before him, an aging but still effective Ginobili took a substantial pay cut (roughly 50 percent). But those who wanted him to return to the team wanted him to do so at an extremely low number. For a player like Manu, the veteran’s minimum (as some suggested he was worth) was totally out of the picture. A more realistic low-ball number would’ve been something similar to what Diaw and Danny Green will make next season (in the $4-5 million range). But even at 36, Ginobili still has more value than either one of those players.
Once the Splitter deal became public, the math became easy. The big man’s contract put the Spurs in a position where exceeding the salary cap would be more beneficial than trying to stay under it, especially when a player like Ginobili — whose value in the city of San Antonio extends far beyond the painted lines of a basketball court — is involved.
Had the Spurs gone the extreme route and renounced Ginobili’s rights, the team would’ve been left with a maximum of around $6 million in cap space (by my calculations) to replace Manu. And there were essentially no players in free agency that provided what Ginobili did at a price similar to the full $5.15-million MLE. San Antonio would have been forced to renounce its rights to said MLE in order to maximize that space, but the value of the exception would’ve shrunk to the $2.652-million ‘room’ exception, and the two amounts couldn’t have been combined to form one $8.652-million offer (MLE + cap space). (See explanation in italics below.)
So, Ginobili’s $7.5-million deal in the first year moved the Spurs safely over the salary cap but far away from the luxury-tax threshold, even with Gary Neal’s pending status as a restricted free agent. It also allowed San Antonio to quickly move out and sign Marco Belinelli and Jeff Pendergraph to replace Neal (eventually) and DeJuan Blair using the full MLE. In all, the team spent ~$12 million (Bird Rights + MLE) on Ginobili, Belinelli and Pendergraph. I’d gamble that’s better than the best alternative the Spurs could have mustered in free agency with $8.652 million to spend (cap space + room exception) and no Manu on the roster.
*Remember, most of these player exceptions count against a team’s salary when not used. So, say the Spurs were somehow able to sign Splitter and Ginobili and still remain $4-5 million below the salary cap. They would not have then been able to use that cap space to sign free agents AND use their full MLE on guys like Belinelli and Pendergraph once they exceeded the cap. This is intended to eliminate the aforementioned loophole. The only way a team can prevent this from happening is by dropping below the salary cap and then renouncing its rights to several exceptions, including the MLE and bi-annual exception. Doing this would make all their cap space available and, because they fell below the salary cap, would give access to the room exception.
The price the Spurs paid for Ginobili makes perfect sense, even if your most vivid memories tell you otherwise.
The cost of production
While the common belief is that the Spurs overpaid a bit for Splitter and Ginobili, the production numbers tend to show that is not the case. According to the great work of Daniel Myers, a combination of advanced statistical plus-minus (ASPM) and value-over-replacement-player (VORP) analysis show that their new contracts easily reflect their production value.
Myers’ number-crunching shows us that Splitter was worth $10.9 million for the Spurs last season despite being paid less than half that amount. Ginobili, on the other hand, had a 2012-13 performance worth $8.6 million, which is significantly below the $14.1 million he was being paid. We knew a pay cut was coming after his season-long struggles, but if he produces at a similar level again during the upcoming season, the Spurs are still going to get what they paid for.
Given all the different systems and philosophies in place in team structures of today’s NBA, a player’s monetary worth is not the same throughout the league. Maybe Splitter isn’t worth eight figures to most organizations, and perhaps Manu’s missteps don’t call for a $14-million extension elsewhere, but in San Antonio there’s a paramount placed on the value of culture and overall fit.
So it’s not as if the contract negotiations were solely motivated by salary cap ramifications. The Spurs re-signed their players at a fair price and, by choosing that path over the uncertain one that winds through free agency, have set themselves up for continued success with little turnover.
Sometimes in life, less is more. And for a championship-caliber team as set in its ways as the Spurs, there’s no need for much change.
Stats courtesy of NBA.com/stats; salary numbers provided by ShamSports.com.