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Low money supply hindering Varejao, Pavlovic
Published on Tuesday, Oct 09, 2007
There are a lot of eyes on the Cavaliers' front office these days, and it's not fans wondering when Anderson Varejao and Sasha Pavlovic are going to get signed.
Right now, the Cavs are serving as a giant test case a precedent setter for the way business is going to be handled in the NBA, and other organizations are watching carefully. The stakes are high.
Let's see if we can make this simple without launching into a deep economic diatribe. The summers of 2004, 2005 and 2006 featured record spending in the NBA. Part of it was due to a new collective bargaining agreement in 2005 that bolstered the salary cap.
Lots of max contracts were given out, numerous teams had, and used, giant amounts of cap space; lots of teams used their entire mid-level exceptions to sign mid-level players to contracts worth more than $35 million; and lots of restricted free agents got huge deals without having to get legitimate offers elsewhere.
That was the flow, now is the ebb.
With the luxury tax now known before the season and after three years of big spending, there is a recession in the NBA.
Only one team this summer, the Toronto Raptors, used its full mid-level exception on one player. Only two free agents, Rashard Lewis and Darko Milicic, changed teams for more than the mid-level exception. There were no sign-and-trade deals of significance. The market is different, and the Cavs and everybody else know it.
So here come Varejao and Pavlovic, guys coming off career seasons and looking around at their peers who got paid the past three summers. That includes their teammates. Larry Hughes, Damon Jones and Donyell Marshall all got big contracts from the Cavs in 2005, when more than a half-dozen teams had a load of cap space.
Varejao and Pavlovic want their piece of the pie, and who could blame them? Except, the pie has changed.
Varejao and Pavlovic and their agents seem to be in denial about it. Which is why they are getting so radical by attempting unprecedented holdouts to apply pressure to the Cavs. It's their attempt to buck the market.
The Cavs, looking around the league and at their highest payroll ever this season, are standing firm and refusing to pay more than the market dictates. In 2005, it dictated that a guard with Jones' track record was worth four years and $16 million. He got it. It was a market-value deal at the time.
In 2007, not a single team can offer Varejao a deal starting at more than $5.3 million this season. So why would the Cavs pay him the $9 million he wants? Varejao's side is betting the Cavs will fold under the pressure of his absence. Most of the league is watching, but shares the Cavs' viewpoint.
Here's the other factor: As things stand today, next summer appears to be just as tight. There will be a couple more teams with salary-cap space than this summer, but the free-agent class is much deeper. Being a free agent again, as Varejao and Pavlovic could've been if they took one-year qualifying offers, might not be a smart move.
However, in 2009 and probably again in 2010, many of those contracts signed between 2004-06 will expire. It appears as if the league again will be awash in available cash. That's when you want to be a free agent. Not now.
This is what Varejao and Pavlovic should focus on: getting paid for a few years and taking another bite when the money is flowing again. The offers the Cavs put on the table would've given both players huge raises for the next few years. In Varejao's case, he easily can make five times more in the next two years than he did in his first three seasons combined.
Instead, they appear to be waiting to hit that home run. Here's the rub: Nobody in the league right now is pitching.
Around the league
A report in Monday's Chicago Tribune cited the problems in the mortgage industry as a reason why the Cavs can't come to terms with Varejao and Pavlovic.
Cavs owner and Quicken Loans founder Dan Gilbert has gone on the record with several outlets saying that is not the case. So have members of the Cavs' front office.
Those are only words, so pay no attention if you like. Rather, let's judge the Cavs by their actions.
Two weeks ago, the Cavs traded David Wesley plus a check for several hundred thousand for developing big man, Cedric Simmons. Had they cut Wesley, it would've saved them $1.6 million. It was a cash dump for the New Orleans Hornets, a team that is really in financial trouble. The Cavs were investing in young talent.
Apparently a favorite pastime among NBA players these days is surfing YouTube for Stephon Marbury. No, not highlights, but clips from various interviews Marbury gave during the summer when he alternated between making outrageous statements to times when he was downright babbling. According to various insiders, it has been the source of high comedy among his peers.
New Sacramento Kings coach Reggie Theus has imposed a midnight curfew on his players. No other team in the NBA has a curfew. Even old-school disciplinarian Jerry Sloan has repealed his. So what does Ron Artest, a well-known night owl, say about it: ''I'm sure he'll be flexible,'' he told the Sacramento Bee.
Phoenix Suns coach Mike D'Antoni couldn't understand why Shawn Marion would want to be traded. He makes some excellent points: ''I'm maybe a little sad that he has to go through it. You shouldn't have to go through it. This is a great time in anybody's life, and we've got a great team, and Phoenix is probably the best place to live and you make a lot of money,'' D'Antoni told reporters last week. ''I have a hard time getting my mind wrapped around it.''
Brian Windhorst can be reached at bwindhor@thebeaconjournal.com. Read his blog at http://www.ohiomm.com/blogs/cavs/.
There are a lot of eyes on the Cavaliers' front office these days, and it's not fans wondering when Anderson Varejao and Sasha Pavlovic are going to get signed.
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