Zach Lowe’s excellent article explains that the max contracts that Dwight Howard and Deron Williams can sign are 6-yr, $138mm deals if they stay with their current teams, or 6-yr, $128mm if they leave. For the second number, he assumes that the players will resign with their new teams four years later at the then max rate, but the players would assume the risk of suffering a career-ending injury prior to resigning. At any rate, are Dwight Howard and Deron Williams worth $21-23mm a year? We project Howard (9 WARP per year) and Williams (8 WARP per year) will both be All-Star level performers for the next four years. Howard is probably underrated by our SSPM ratings, since our ratings favor players who control the ball. Win Shares are consistently higher than our SSPM WARP’s by around 3 wins per year, so even if we use their numbers, we project Howard will produce at most 12 WARP per year.
We argued that teams should maximize the number of players who deserve max contracts since the cap represents a possible market inefficiency. We applauded the Thunder when they locked up Russell Westbrook to a 5-yr, $80mm extension, so why are we hesitant to endorse the signings of Howard and Williams? First Westbrook is younger and improving (23 years old), while Howard (26 yrs old) and Williams (27 years old) are already in their primes. In contrast to Howard and Williams, we project Westbrook will average over 12 WARP over the next four years, and his average salary will be “only” $16mm. Howard’s minutes played, points and rebounds are all forecasted to trend down slightly over the next six years. Using $1mm + $1.6mm/WARP as our rule of thumb, Howard and Williams would need to generate 11 WARP per year to justify a $19mm year-one salary. Can they achieve 11 WARP per year? Possibly, but even in that case, the signing team would be getting at best fair market value, while assuming a lot of risk. The team would need other salary-efficient players to complete a championship-caliber squad.