Valuing Free Agents

One of the trickiest things to do in the modern NBA is value players, particularly free agents. There are a number of different ways that fans mentally go about valuing players. The most frequently used method is to compare the player to others of similar abilities, and see what these other players are making (assuming, of course, they are not on rookie contracts, which are no indicator of a player’s real value). There is a significant problem with this, however; this may shock you, but some players in the NBA are overpaid! There are also those who are underpaid. Say we’re talking about a free agent big man who averaged about 14 points and 6 and a half boards last year. That production could be compared to that of former Seattle SuperSonic and current Boston Celtic Vin Baker . . . who will pull in $12.375 million for his efforts next season. Sounds like a favorable comparison for an agent to make, right?

The answer to players like Baker and Steve Nash (he’s the best example I can find off-hand of an underpaid veteran, pulling in less than $6 million for All-Star caliber point play) is to average the similar players. But with limited sample sizes, this might not always work. After all, how many players can you name that are quote unquote “similar” in value to any given player? Beyond a handful, you’re stretching.

With that in mind, I’d like to humbly offer an alternative.

By way of background, last winter in my statistics course at the University of Washington, I was asked to do a simple regression project requiring me to predict a dependent variable based on an independent variable. Naturally, I turned to sports.

My first thought was to use baseball salaries and some statistical performance measure, because baseball has a ‘freer’ market economy than basketball (no salary cap, no maximum salaries, and no ‘exceptions’). However, this proved difficult for two reasons. First, statistical measures that can be used to compare hitters and pitchers are difficult to come by. The best of these is likely Bill James’ Win Shares, but his book listing these had not yet been published when I undertook this project. Second, while salary data for NBA players is fairly easy to find, I had a difficult time tracking down data for lower-level baseball free agents. Without the players at the bottom of the market, it would have been tough to get a complete picture of baseball finances.

After that initial failure, I turned to basketball. Though less ideal in economic terms, the NBA fared much better in amount of effort necessary to complete the project, a key concern, especially given the fact I was quite confident in my ability to get an A with little work. For salary info, I used Patricia Bender’s salary listing. For the statistical measure of performance in the past season, I was able to use my own measure, Value Over Replacement Player (VORP). Finding the salary for the 2001-02 season and the VORP for the 2000-01 season for each player who was in the NBA in both seasons and changed teams as a free agent during the summer of 2001 (78 players in total), I quickly finished my project.

After I was finished, however, my interest was piqued. For my short-lived column at ProSportsWriters.net, I was looking at alternative player rating systems to the traditional one, adding good stuff and subtracting bad stuff, most prominently exemplified by the TENdex system created by Dave Heeren. My thought was to rate players based on how organizations themselves rated them, in terms of how much they made as free agents. Instead of VORP, then, I did regression analysis comparing a number of other statistics to the salaries of the free agents I had previously used.

The inherent danger in using the results as a rating system was that salary naturally included components beyond performance in the previous season, notably age, position, and performance two years past and earlier. But I believed that these other factors would more or less average out, making the weights I obtained accurate enough to at least be interesting.

By this summer, the natural application for this formula hit me -- plugging in the same statistics for this summer’s free agents to see what they should be worth. A true statistician would immediately have a problem with this application, as it is extrapolating beyond the scope of the input data. In truth, all I should really be able to do is determine what a given player might have made had they been a free agent last summer. But in a frivolous case like this, I don’t think predicting 2002 salaries from the 2001 market is a real problem. Normally, inflation would be a significant concern, but with the salary cap actually decreasing this summer and the exceptions remaining fairly close to their value from last summer, I think the values I’ve obtained are reasonable.

Now that I am actually trying to predict salary as opposed to rate players, the other components mentioned above become important. All other things equal, a 25-year-old free agent will make more than a 35-year-old, and a 7-1 center will make more than a 6-2 point guard. To account for this, I added three ‘attributes’ to the calculations -- age, experience (more accurately, years since leaving college; I included this mostly to see if there was any difference between players who came out early and those who did not, and account for it if so), and height.

The statistics I used were games played, minutes, field goals attempted, free throws attempted, offensive and defensive rebounds, assists, steals, blocks, turnovers, and points. All of these were raw totals, with my hope that the inclusion of games and minutes would essentially work to recreate the effect of per-game and per-minute averages. In other words, while piling up a lot of points will be a positive, minutes will be a negative, meaning that a player who has scored 1000 points in 2000 minutes will get relatively more credit from his scoring than one who has scored 1000 points in 3000 minutes. The same thinking applies with including field goals attempted and free throws attempted. The one thing I am really unsure about leaving out is some measure of three-point ability; in the end, I decided that it probably wasn’t important how points were scored, just that they were scored.

Before I get to the actual ratings, I am personally obligated to make a disclaimer statement. These are very rough estimates at best, and by no means do I necessarily believe what the formula says a given player is worth. Statistics can only explain so much, and they fail to properly account for the man defensive ability of players like Bruce Bowen. There is value, here, however, in my opinion. When the formula says Allan Houston is worth just over $6 million and he gets more than twice that, something is wrong with the Knicks’ decision-making. Remember, in the end, that these values are just for recreational use.

2002 Free Agent Rankings
I basically stuck only with players who had played a reasonable amount of minutes such that their stats could be an accurate indicator of their performance last season and those that were likely to have some interest as free agents. I’ll list the players in order of salary, breaking in frequently with my comments and explanation.

1. $10.90 million - Bonzi Wells, sg, POR
I was quite surprised to see Wells end up at the top of the list, but it is hardly a far-fetched notion to think that he is the best free agent on the market. The Blazers have little incentive to offer Wells this much money because of the fact that he is a restricted free agent and has little to no leverage.

2. $8.58 million - Jeff McInnis, pg, LAC
If Wells at the top of the list was surprising, McInnis ranking second was downright shocking. I’m not sure that McInnis is worth the median exception, but statistically he looks good because he played the most minutes of any free agent (3030) and was able to pile up the most assists and third-most points.

3. $7.87 million - Rashard Lewis, sf, SEA
In my opinion, this is a pretty accurate value for Lewis, if maybe a little on the high side. Don’t try to tell that to most Sonics fans, however, as they’ve turned on Lewis and disparaged him as greedy and selfish.

4. $7.80 million - Matt Harpring, sf, PHI
This was another head-scratcher. I’ve never been much of a fan of Harpring, but the guy can definitely play; he’s a quality shooter and a very good rebounder for a three. Surprising there hasn’t been more interest.

5. $7.62 million - Chauncey Billups, pg, MIN
Billups quietly put up very impressive numbers last season, with especially strong assist/turnover ratio and scoring efficiencies.

6. $7.47 million - Keon Clark, c/pf, TOR
Getting busted for pot is one thing that Excel can’t take into account.

7. $7.03 million - Raef LaFrentz, c/pf, DAL
Right about what he actually did sign for.

8. $7.00 million - Donyell Marshall, sf, UTA
He’s worth that much, but unlikely to get it in Utah or anywhere else.

9. $6.47 million - Mike Bibby, pg, SAC
In April, that might have been considered on the high end. In August, he can turn down $77 million and not take the same flak that Lewis has in Seattle.

10. $6.47 million - Rodney Rogers, pf, BOS
If any free agent is getting screwed this summer, it’s Rogers, who might actually be forced to sign for (gasp!) the “million-dollar” exception. Somebody is going to get a bargain.

11. $6.26 million - Michael Olowokandi, c, LAC
He -- and the media and fans, seemingly -- thinks he’s worth a lot more. I think this is about right.

12. $5.89 million - Troy Hudson, pg, ORL
13. $5.66 million - Lee Nailon, f, NO
14. $5.41 million - Malik Rose, pf, SA
15. $5.30 million - Rod Strickland, pg, MIA
16. $5.26 million - Popeye Jones, pf, WAS
Another guy who looks like he’s getting screwed to me with no apparent explanation, save age. One of the league’s better rebounders, and had a nice jumper.

17. $5.26 million - Ricky Davis, sg/sf, CLE
18. $5.22 million - Larry Hughes, g, GS
19. $4.85 million - Rasho Nesterovic, c, MIN
20. $4.80 million - Pat Garrity, f, ORL
21. $4.74 million - Michael Redd, sg, MIL
I expected Redd to come out quite a bit higher, as he is a much better prospect in my mind than many of the guys ahead of him. He probably won’t get even this much, however, since he is restricted. There’s quite a significant drop-off after Redd.

22. $3.79 million - Scott Padgett, f, UTA
23. $3.71 million - Voshon Lenard, sg, DEN
24. $3.48 million - Tim Hardaway, pg, DEN
25. $3.46 million - Jim Jackson, sg/sf, MIA
26. $3.38 million - Jacque Vaughn, pg, ATL
Vaughn signed with Orlando for a very small fraction of this -- about a fifth, in fact. That makes him one of the summer’s best bargains; with the high number of reserve points on the market, there will be more to come.

27. $3.37 million - Bryon Russell, sf/sg, UTA
28. $3.34 million - Eduardo Najera, f, DAL
29. $3.31 million - Travis Best, pg, CHI
See Vaughn, Jacque.

30. $3.29 million - Monty Williams, sf, ORL
31. $3.12 million - Jarron Collins, c, UTA
32. $2.77 million - Gary Trent, f, MIN
33. $2.63 million - Devean George, sf/sg, LAL
Yes, I know that this probably undervalues George, who is a good defender. But a median exception for this guy? That’s a waste of money.

34. $2.57 million - Zendon Hamilton, pf/c, DEN
35. $2.50 million - Hanno Mottola, pf/c, ATL
36. $2.50 million - Art Long, pf/c, SEA
Raise your hand if you knew that these three guys provided quality minutes as reserves last season. Oh, stop lying. You know you didn’t. Apparently, neither does the rest of the league; Mottola has already headed over to Europe, while Hamilton and Long will be fairly lucky to get guaranteed deals at the minimum.

37. $2.49 million - Greg Anthony, pg, MIL
38. $2.41 million - Kevin Ollie, pg, IND
39. $2.36 million - Eddie House, g, MIA
40. $2.36 million - Walt Williams, sf, HOU
41. $2.36 million - Rodney Buford, sf/sg, MEM
42. $2.33 million - Chris Gatling, pf/c, MIA
43. $2.20 million - Corie Blount, pf/c, PHI
44. $2.14 million - Ryan Bowen, f, DEN
45. $2.06 million - Calbert Cheaney, sf/sg, DEN
46. $1.97 million - Jerome James, c, SEA
By this formula, James is easily the most overpaid player so far this summer. Evidently, the adjustment for height is not dramatic enough, for this same trend was seen last year when Todd MacCulloch was projected at less than $2 million and Calvin Booth barely above two and a half. Of course, many analysts thought back then (and some still do on Booth) that those lower values were more accurate.

47. $1.92 million - Kevin Willis, c/pf, HOU
Yes, he’s about a thousand years old, but before the Rockets started giving his minutes to younger players, Willis was still a very capable player.

48. $1.85 million - John Crotty, pg, UTA
49. $1.82 million - ZhiZhi Wang, c, DAL
50. $1.81 million - Terry Porter, pg, SA
51. $1.78 million - Vladimir Stepania, c/pf, MIA
52. $1.71 million - Rusty LaRue, pg, UTA
53. $1.64 million - Chris Childs, pg, TOR
54. $1.62 million - Damon Jones, pg, DET
While Childs actually got close to this amount from New Jersey, the other four point guards in this group won’t come close. Porter, of course, has already retired to become a Sacramento assistant. Crotty, LaRue, and Jones? Well, the market isn’t exactly wonderful for them.

55. $1.58 million - Trajan Langdon, sg, CLE
56. $1.57 million - Slava Medvedenko, pf/c, LAL
57. $1.57 million - Grant Long, f, MEM
58. $1.46 million - Scott Williams, pf/c, PHO
59. $1.41 million - Bruce Bowen, sf, SA
As noted above, there are few, if any, players on this list who are more underrated by this formula that this defensive stopper.

60. $1.39 million - Earl Boykins, pg, LAC
61. $1.39 million - Raja Bell, sg, PHI
62. $1.31 million - Earl Watson, pg, MEM
There’s been a lot of talk in the media that Watson was overpaid by the Grizzlies (he got $4 million over three years, making his first year salary $1.2 million), but I just don’t see it. Of course, how much can one overpay with that (relatively) paltry money?

63. $1.30 million - Sam Mitchell, f, MIN
64. $1.28 million - John Wallace, sf, PHO
65. $1.25 million - Dell Curry, sg, TOR
66. $1.23 million - Michael Doleac, c/pf, CLE
67. $1.21 million - Shawnelle Scott, c, DEN
68. $1.20 million - Walter McCarty, sf, BOS
69. $1.17 million - Rafer Alston, pg, MIL
70. $1.15 million - Danny Ferry, f, SA
71. $1.13 million - Charles Oakley, pf, CHI
72. $1.08 million - Loren Woods, c, MIN
73. $1.06 million - Kendall Gill, sf, MIA
74. $1.04 million - Mitch Richmond, sg, LAL
75. $1.03 million - Dana Barros, g, DET
76. $983,000 - Ansu Sesay, sf, SEA
77. $968,000 - Rick Brunson, pg, POR
78. $947,000 - Anthony Johnson, pg, NJ
79. $934,000 - Brian Shawn, pg, LAL
80. $914,000 - Dan Langhi, sf/sg, HOU
81. $836,000 - Danny Manning, f, DAL
82. $817,000 - Mookie Blaylock, pg, GS
83. $700,000 - Mark Blount, c, BOS
84. $642,000 - Johnny Newman, sf, DAL
85. $618,000 - Jud Buechler, sf, ORL
86. $593,000 - Olumide Oyedeji, pf, SEA

When he's not writing about the Sonics for Hoopsworld.com and SonicsCentral.com, Kevin Pelton usually has Excel open to check out NBA statistics. He can be reached via e-mail at kpelton@sonicscentral.com.