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The Gamble

July 31, 2002

Some of my colleagues here at SonicsCentral.com have accused Seattle SuperSonics management of being overly cautious and conservative in the past. While I’m not sure this characterization is always founded -- was taking Vladimir Radmanovic, whose best position happened to be the same as that of the Sonics’ top young player (Rashard Lewis) as opposed to a true big man like Brendan Haywood, Troy Murphy, or Michael Bradley really a conservative decision? No, simply a brilliant one -- it’s true that “Trader Wally” is not a label that will ever be applied to Wally Walker, and no other member of the front office is in any danger of earning a similar moniker. Bob Whitsitt they are not.

But in a summer where it seemed conservatism would be the order of the day, with the Sonics quietly retaining their own free agents and perhaps dealing Vin Baker (we should be so lucky!), upper management has decisively struck with a dice roll the likes of which has not been seen in Seattle in many years.

The cautious plan of attack would have been the obvious one: Take care of Lewis, your “number one priority” and then -- if there was any money left -- worry about Jerome James, Earl Watson, and a Baker deal. Such a scenario would probably have resulted in a short series of negotiations of little difficulty between the Sonics and Lewis’ agent, Carl Poston.

But what if the Sonics could get Lewis for less? The potential benefits were and are huge. A lower payroll this season would allow the Sonics to bring back James, but more importantly, the Sonics would save dramatically in the coming years. First, a smaller Lewis salary means more room to pursue free agents next summer. After all, if Lewis makes too much during the 2003-04 season, the Sonics will be left without the opportunity to give a free agent the $10 million or so they’d need to be convinced to replace Gary Payton in Seattle.

Still further down the line, Lewis’ deal will likely set the bar for the Sonics’ other young players -- Desmond Mason and Radmanovic -- when they are eligible for long-term contract extensions, next summer and the summer thereafter, respectively. If the Sonics could bargain Lewis down, they could point to his salary and note that Lewis had achieved more during his four years pro than either Mason or Radmanovic will have when they seek extensions. (Well, that’s the conservative assumption. It’s a little early yet to say what Radmanovic will have achieved by the summer of 2004.) So then Lewis’ salary could create a domino effect of lower salaries throughout the Seattle roster. And that means more room to add other players or remain flexible regardless what new clauses the NBA adds when the CBA (Collective Bargaining Agreement) is renegotiated.

And the Sonics could certainly point to the leverage they held with Lewis. Who, after all, could offer more? With the NBA’s salary cap lowered on July 17, no team really would have the means and desire to make an offer of more than their median exception -- a deal, at approximately $4.5 million, that would be nothing less than insulting to Lewis; scarcely a raise from his old contract, which he had received before even becoming a starter. So the Sonics could offer him $5 million a season, less than half of what Lewis really wanted, the maximum salary for a player of his experience, slightly more than $10 million, and their offer would still be substantially better than any others he got. (Also in the Sonics’ favor is that they can offer Lewis 12.5% annual raises, whereas a deal signed using the median exception is limited to 10% raises.)

The Sonics’ cards, however, are not quite as strong as I have made them out to be. Lewis can get a better offer than that theoretical deal starting at $5 million a season. All he needs to do is to sign a shorter-term deal elsewhere, ideally for three years. After those three years where he would earn slightly less than he could in Seattle, Lewis’ new squad would own his Bird rights, and be able to exceed the cap to sign him to the deal they wanted. (Another possibility is Lewis signing a one-year deal and hoping for a looser free agent market during the summer of 2003.) A short-term deal with the ‘wink, wink’ implicit promise of more money down the road is the trump card that Lewis holds in his hand.

So really, signing James first and trying to bargain down Lewis was not only a gamble on the part of the Sonics, it was a matter of calling Lewis’ bluff. Did he really have the stomach to weather the uncertainty of a short-term contract? After all, any number of things could happen in the next three years -- just as they have over the last two in Seattle after Lewis certainly heard some comments along the lines of, “We’ll take care of you in two years,” when he passed up a six-year deal for more money in Toronto to return to the Sonics.

In the intervening two-year period, three important things changed to affect Lewis’ expected payday: Howard Schultz, Radmanovic, and the luxury tax. It was previous owner Barry Ackerley who oversaw Lewis’ selection in the 1998 Draft and his first two deals, both of which were more than fair. Who knows what Ackerley told Lewis would happen for his next deal, but Ackerley’s sense of loyalty has not seemed to be duplicated by Schultz. After all, were Ackerley still in charge, there is little question that Payton would already have a contract extension in hand.

Radmanovic and, to a slightly lesser extent, Desmond Mason, have made Lewis less critical to the future of the Sonics organization. When he was a free agent in the summer of 2000, Lewis was the only starting-caliber player the Sonics had drafted and developed since Payton. But Mason, playing behind Lewis, was a strong candidate for Sixth Man of the year and, replacing him, had the two best games of his career in the month of April (although his poor play during the rest of the month has gone largely unnoticed). And Radmanovic had an impressive rookie season that saw him make second-team all-rookie despite persistent injuries and a slow transition to the NBA during his first month or two pro. By season’s end, Radmanovic had established himself as a starter whose potential upside is, in the view of many, higher than that of Lewis. And while Radmanovic, Mason, and Lewis can surely coexist as they did last season, the previous two mean Lewis’ loss would not be the catastrophe it would have been in 2000.

Who knows exactly how anticipated the luxury tax was by teams throughout the NBA two summers ago. I can say for certain that I had never heard the term at that point, though it now rolls of the tongue as easily as any on-court term and may be just as critical to a fan’s or analyst’s knowledge of the NBA. At the very least, my guess is the Sonics were probably expecting not to have to worry about the luxury tax in the near future when they signed Lewis in 2000; after all, they were still working to get under the cap for 2001, leaving plenty of room. And back then, the future of the economy was brighter than even Lewis’ future.

It would have been difficult to foresee the set of economic, political, and basketball circumstances that would produce a projected luxury tax of $52 million for next season. But now that such a tax level is a reality, Lewis’ contract is not quite as simple. For if the Sonics pay Lewis even $5 million next season, the deal will really cost them much more than that in the short-term -- a dollar for every dollar they’re over the level of $52 million, but, more importantly, no cut in the money held in escrow from the players that will be given to the teams if the tax is enforced. A smaller Lewis deal not only lightens the Sonics’ tax load for next season, it also reduces the chances of them nearing that level in the not-too-distant future. So the luxury tax has certainly been a cause of the Sonics’ financial conservatism, which has caused basketball risk-taking.

If you’ve read thus far and are thinking, “Why would Lewis even consider leaving?” (especially after the Sonics’ actual offer was not in the $50 million range, but is reportedly north of $60 million, not counting incentives), you’re thinking like the Sonics. That is to say, you’re considering this deal in a purely logical manner. If we were going to construct an expected value deal that compared what Lewis would make by staying in Seattle and by going to Dallas (or elsewhere), only the most avid risk-taker would on monetary value alone choose to leave. And that has almost undoubtedly been the position the Sonics have taken; “If it comes down to money, we have it.”

But we humans, 22-year-old basketball stars not excepted, are not always logical thinkers. Other things get in the way. And the Sonics have, with their offer, done a remarkable job of clouding Lewis’ rational thinking with all sorts of angry emotions about how the team could treat him so poorly. And the Mavericks, in whose best interest it is that Lewis not be making his decision strictly on logic, have also clouded it with those troublesome human emotions by means of a whirlwind tour of the city of Dallas and the Mavericks’ shiny new facilities at the American Airlines Arena.

The challenge from Cuban has forced the Sonics to put on their best poker faces. There’s Rick Sund talking about the team’s inability to recruit Lewis in the same manner, or another person talking about how the Sonics are offering way more money than anyone else. But no one’s fooled by these proclamations. This is the Sonics’ bluff, and just as they called Lewis on his bluff of going elsewhere, I’m going to call them on this.

A little gambling every now and then is a very good thing, and necessary for a franchise, but the stakes are getting very high. While I’m not sure that Lewis signing with Dallas would hurt the Sonics too much in the long-term (if they can put the money they don’t spend on him into a free agent next summer), it definitely will cost them next year, making the playoffs an unlikely dream. Lewis sits on one side of the table with his agents and family, the Seattle organization on the other. Whose bluff will pay off? We’ll soon know.

Kevin Pelton has served as beat writer, columnist, editor, copy editor, and webmaster for SonicsCentral.com since its inception. He also writes a weekly column for Hoopsworld.com and is a student at the University of Washington in his spare time. The Candid Corner is updated every Monday. Kevin can be reached at kpelton@sonicscentral.com. All opinions expressed in this column are solely the views of the author and do not necessarily reflect the opinions of other columnists or the SonicsCentral.com staff.

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