With Some Exceptions, the Orlando Magic Overpaid Their Players in 2010/11

Miami Heat guard Dwyane Wade recently claimed that NBA superstars--such as himself, naturally--remain the league's most underpaid players under the Collective Bargaining Agreement which expired on July 1st. In Monday's edition of The Hook, SB Nation NBA editor Tom Ziller did some investigating and poked holes in Wade's argument, finding that players on rookie-scale contracts actually offer the most bang for the buck.

Estimating that one win during the 2010/11 season was worth $1.47 million, Ziller calculated the value each NBA player offered his team in terms of Win Shares, a catch-all statistic Bill James developed for baseball and Justin Kubatko adapted for basketball. For example league MVP Derrick Rose earned 13.1 win shares in 2010/11 at a salary of $5.4 million. The disparity between his value (13.1 * $1.47 million) and his salary stands at $13.7 million, making him the league's most underpaid player, according to Ziller's analysis. LeBron James, Wade's teammate on the Heat, was the only player in the top-10 list of underpaid players who is not on a rookie scale contract.

I wanted to apply Ziller's analysis to the 2010/11 Orlando Magic to evaluate the extent to which it paid its players fairly. You'll find the distressing results after the jump.

The results, shown below, are more than a bit depressing. Plase note that a red figure in the over/underpaid column represents the extent to which a given player was overpaid, and a green figure in that column represents the extent to which a given player was underpaid. Additionally, an asterisk next to a player's name indicates Magic President of Basketball Operations Otis Smith signed that player to the contract in question. The % Over/Underpaid column is meant to express as a percentage how close a player came to fulfilling the value of his contract:

Quickly and dirtily, I can tell you the following:

• Five of the Magic's twelve players were underpaid, meaning seven were overpaid.

• Smith signed the contracts of seven players; of those seven, three were underpaid and four were overpaid.

• Ryan Anderson is the biggest bargain, offering $9.4 million in wins at a salary of $1.4 million. His production exceeded his salary by 666.7 percent.

• Gilbert Arenas is the worst bargain, offering $294,000 in wins at an adjusted salary of $12.1 million. He produced at just 2.4 percent of his salary.

Those are the raw facts. What conclusions can we draw from the data? I'll offer a few here:

• Otis Smith is a fair evaluator of young talent: Smith built this team, and it's telling that young players are the team's best bargains. Smith insisted on acquiring Ryan Anderson from the New Jersey Nets in the Vince Carter trade two years ago, and while it's true Anderson's on a rookie-scale deal and thus Smith did not negotiate his contract, Anderson's productivity attests to Smith's savvy with regard to youngsters.

  Later that summer, Smith signed then-24-year-old Brandon Bass to a free-agent contract which has proven fair. In 2007, Smith inked Jameer Nelson, then 25, to a deal which still looks good even as the point guard approaches age 30 in 2012.

• Dwight Howard is really, really, really good: Howard has outplayed the maximum contract extension he signed in the summer of 2007.

• Hedo Turkoglu fared better than expected: The NBA media and fans tend to cite the five-year, $52.8 million contract Turkoglu signed with the Toronto Raptors in 2009 as an example of NBA largesse, the sort over role-player overpaying that led to the current NBA lockout. Yet in 2010/11, Turkoglu outperformed his salary by $1.4 million, according to this analysis, thanks to his all-around contributions (11.4 points, 4.6 rebounds, 5.1 assists) and efficiency (55 percent True Shooting).

  Turkoglu's strong showing here does raise questions about the fairness of Win Shares. At the risk of sounding obvious, Win Shares relies only on what's recorded in the box score. Though Turkoglu's aggregate statistics are surprisingly solid, the box score doesn't account for what is arguably the Turkish forward's biggest shortcoming: his inconsistency. As documented previously on this site, Turkoglu's highs are high and his lows are low, and one never quite knows what to expect from him on a night-to-night basis.

  In player analysis, what premium ought we place on reliability? And how would accounting for it, if possible, affect the fairness o Turkoglu's contract?

• Goodness me, Gilbert Arenas played poorly: That Gilbert Arenas is overpaid is obvious. But this overpaid? Even when adjusting his salary to reflect an estimate of what Orlando actually paid him, he's still more than $11 million in the red. He tied Malik Allen and Chris Duhon for the lowest Win Share total on the team.

  Or, I'll put it this way: despite earning more than nine times as much money as Earl Clark, and playing nearly thrice as many minutes, Arenas produced just one-third of a Win Share less than Clark.

  That. Is. So. Awful. that I've resorted to using the one-word-sentence-for-emphasis gimmick.

• J.J. Redick could be a bargain soon enough: the Chicago Bulls front-loaded the offer sheet Redick signed with them last summer, which Orlando matched. Thus, the reserve two-guard's salary declines in each of the next two seasons. Should he maintain or slightly improve upon his performance this season whenever the 2011/12 campaign tips off, Redick's contract will be almost precisely fair relative to his productivity.

Here are the numbers for the players who started the season with the Magic, but finished it elsewhere. They're no more encouraging.

Conclusions?

• These guys weren't playing up to par: I suppose one could use this information to argue that Smith made the right call in jettisoning these players. He sent Vince Carter, Marcin Gortat, and Mickael Pietrus to the Phoenix Suns; dealt Rashard Lewis to the Washington Wizards; and waived Jason Williams after the veteran point guard deserted the team due to a lack of playing time.

• Rashard Lewis' contract doesn't look so great: In fact, it looks terrible. Despite the fact that Lewis spent a little over a quarter of the season with Orlando, the Magic overpaid him by nearly $4 million. Lewis served admirably as the team's co-second offensive option in the first two years of his contract, during which he was still overpaid, but less so. In the last two seasons, however, he's tailed off. Now 32, the contract to which Smith signed Lewis calls for the veteran combo forward to be paid more than $40 million over the next two years.

• Smith's aptitude for identifying young talent holds up less well: Though Gortat underperformed, he didn't do so by a whole lot, producing at 95.3 percent of his salary. Smith matched the Dallas Mavericks' offer sheet for Gortat when the Polish Machine was 25. On the downside, Air France signed with Orlando at 26 and produced at just 61.2 percent of his salary in 2010/11 before Smith showed him the door.

It's hard to know precisely what bearing the raw data in the tables will have on the team going forward, as the next Collective Bargaining Agreement could call for rollbacks on existing salaries. But by reading between the cells, if you will, we see Smith's strengths and weaknesses.

Interestingly, the players Smith signed--including the ones who departed--outperformed their salary in 2010/11, despite the drain Rashard Lewis represents. The 11 players combined for $52.6 million in adjusted salary, but $54.9 million in value.

Of course, that figure excludes Arenas and Turkoglu, whose contracts Smith did not negotiate. This fact would seem to indict the acquisition of Arenas at the very least, and perhaps even that of Turkoglu, depending on one's opinion of the value of consistency, as discussed above.