Friday, July 1, 2011

Heat Check: James Jones Opted Out. The Sky Is Blue, Too.

It should not be a surprise that James Jones declined the option for the last year of his contract at the veteran’s minimum.

Jones just completed his third season with the Miami HEAT. A player gains “Bird rights” after playing three seasons with the same team according to Larry Coon’s NBA Salary Cap FAQ. “Bird rights” enable teams to use an exception in the NBA Collective Bargaining Agreement that allow them to go over the salary cap to re-sign their own free agents up to a player’s maximum salary.

So Jones, the Secretary-Treasurer for the National Basketball Players Association, had two options:
  1. Exercise his contract option with the HEAT for $1.3 million next season or
  2. Decline the option and sign a new contract with the HEAT for more money without damaging the team’s ability to sign new free agents.

The only remaining question is how much should the HEAT spend to re-sign Jones next season. The NBA allocated $2.17 billion for player salaries this season and those players produced 1,230 wins. That means the average cost for a win in 2011 was $1,764,227.64. Jones produced an estimated 1.6 wins for the HEAT this season (see the HEAT Produced Page) which means his play was worth $2,822,764.22. The HEAT paid Jones $1,069,509 in salary this season, so he was really underpaid.

If Jones was underpaid last season, what should the HEAT offer to pay him in his next contract?

Wages of Wins blogger Arturo Galletti illustrated that player salaries have increased at the same rate as inflation over the last six seasons. Using the average rate of inflation over the last six years, the average cost for a win would increase to $1,806,569.11 next season under the terms of the current CBA. That would bump Jones’ value up to $2.9 million. Of course, no one knows what the terms of the next CBA will be, but if the HEAT offer Jones more than $3 million for next season then they probably paid too much for the level of production that he can provide.

So a severely underpaid athlete had the option to continue being underpaid or negotiate a contract for at least an additional $2 million. It sounds like a no-brainer but several blogs all used the word “surprise” when reporting Jones’ decision to decline the option for next season.

There doesn’t seem to be anything surprising about Jones’ decision and it doesn’t impact Riley’s expectation that Jones would be back next season, as David Dwork pointed out at the Peninsula Is Mightier blog.

For those thinking the NBPA will lose the “Bird exception” in the next CBA,’s Chris Sheridan reported at the Truehoop blog the owners have already relented on their demands for elimination of it.

The sky isn’t falling because James Jones opted out of his contract. It’s just blue.


  1. The bird right may be taken away after this ridiculous lockout. Owners want to make a harder cap.

  2. @jfarbman:

    The owners already relented on the Bird exception. As long as the union doesn't cave, it will still be there and the union's VERY prepared for this lockout. As Treasurer of the NBPA, nobody has more insight into what the next CBA will look like than Jones. I'm confident the "Bird exception" will be in the next CBA.