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NBA Free Agency: Determining the value of Jrue Holiday’s next contract

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If forced, should the New Orleans Pelicans consider handing the point guard a max contract?

NBA: New Orleans Pelicans at Los Angeles Lakers Gary A. Vasquez-USA TODAY Sports

A few days ago, I discussed how Jrue Holiday measures versus the last third of other Big 3s of years past. An excerpt:

This means the Pelicans supposed Big 3 of Davis, Cousins and Holiday should be able to hang with the best of them. New Orleans should be able to achieve a 50+ win season behind an “okay” cast, but it could be more if everything were to fall into place (the rest of the roster soon compliments the main core; the coaching, front office and players all get in sync; etc.).

Is Jrue Holiday a strong enough player to be part of a Big 3?

Unequivocally, yes. As the third cog in the wheel, Holiday measures up well, but don’t mistake this to mean he would be worth a maximum contract this summer. That’s a different question I’m afraid for a different time.

Today, we’ll try to answer that important question: Is Holiday worth the max contract? If not, what is an approximation of his actual value?

It’s all about the Money

The economics of player salaries in the NBA, technically, should be simple: their contract should be a function of their ability to help the team get wins. Think of it as a form of supply and demand — teams want to get wins on the cheap. However, the number of players that can actually produce a lot of wins are few, so they’ll naturally ask for a lot for their services. The equilibrium point is when the amount of money that teams can use (the salary cap) produces an average product (or 41 wins). If you spend less on player salaries, you should get fewer than 41 wins. If you spend more, you should get more than 41 wins.

With that in mind, it’s easy to get “how much” each win costs. For the 2016-17, each victory should cost somewhere in the neighborhood of $2.3 million.

season salary cap value of a win
season salary cap value of a win
2017-2018 102,000,000.00 2,487,804.88
2016-2017 94,143,000.00 2,296,170.73
2015-2016 70,000,000.00 1,707,317.07
2014-2015 63,065,000.00 1,538,170.73
2013-2014 58,679,000.00 1,431,195.12

The difficult part is trying to quantify how many wins does each player add to a team. Luckily, the proliferation of catch-all statistics has made all this possible to some degree.

As usual, I’m going to recycle some of the data used from the previous post: RPM (which can be translated to wins based on the number of possessions), BPM (which has VORP based on minutes played) and we have Win Shares (in and of itself).

The first thing I checked was whether Holiday was worth his last contract. The short answer? No.

VORP and WS (both box score metrics) put Holiday’s contract as an overpay somewhere between $ 16.5 to 23.5 million for his on-court production. Even RPM — which favors Jrue thanks to his defensive acumen — puts him as an $8.4 million overpay. And once you consider that salary is directly proportional to age (i.e. as a player gets older, his pay usually goes up) but production is more of an inverse relationship, it suddenly doesn’t look too good.

Holiday is a 7-year NBA veteran, making him eligible to earn 30% of the salary cap ($102 million). That means Jrue can look for a four (if he signs with another team) or five (if he signs with the Pelicans via bird rights) year contract that starts at just over $30 million. Factoring in appropriate raises, the Pelicans could wind up giving Holiday a $172 million contract. That means at the age of 32, Jrue will be earning $39 million. That would represent a ridiculously large commitment for a team that also has to allocate Anthony Davis and DeMarcus Cousins into the budget.

In short: Re-upping Holiday to a figure similar to the one above would likely result in the Pelicans making a massive overpay (just in terms of on-court production). Even in his best days (2014-15), Jrue was barely worth his existing contract.

But on-court production isn’t the only measure of production. Remember: The Pelicans paid a heavy (but worth it, note) price to get Jrue. They were willing to pay that price because they believed (probably rightfully) that in order to accelerate Davis’ development, he needed to play with a good lead guard from the get go. And true enough, Davis became a juggernaut of a talent by his 3rd year — a rare feat.

A big part of that was Holiday as Davis’ statistics have proven over the years he’s more effective next to Jrue. Up until this year, most of ADs scoring statistics (whether you’re looking at %FG at rim, FG% at rim, TS%, TOV%) have been stronger when the duo have shared the floor (and Jrue was always at the top of the # of assists to AD). That helped ease AD into the scoring juggernaut that he is today. So, this theory makes his current contract — which is mildly overpaid (about 3~4 million per year) — better on paper and possibly not a legitimate overpay.

Consider this though: AD now is capable offensively on his own, despite the lack of a reliable 2+ dribble move in the post. He’s scoring efficiently with or without help around him. All he needs is the ball and some time on the shot clock. As a side note, this is why I was fully in favor of trading Jrue for a 1st round pick, even a mid 1st round pick before the trade deadline because the Pelicans were headed down a path of asset acquisition mode.

The Cousins trade has changed the equation. New Orleans shouldn’t be looking to acquire assets that may or may not work, rather focus on the addition of good players to surround AD and Boogie. Jrue is a good player and I showed that in my previous post.

But, is he 30+ million good? Probably not. Is he worth less than 30? Maybe. How much less? I don’t know.

For him to be better than his best year (his 2014-15 season, so far) — where he had a WS/48 of .124, a BPM of 2.3 and an position adjusted RPM of 3.38 — might be improbable. So if we used those numbers (WS/48 of .124, BPM of 2.3 and an RPM of 3.38), what would be his contract value? In his best year, his contract value is $3 million (based on BPM) to around $11 million dollars (based on RPM). That’s a far cry from his expected contract of somewhere north of $17 million.

What Now?

So we’re left with this: we know Jrue’s a good player and he compares well with other members of Big 3s. Based purely on on-court production, Jrue isn’t worth a contract north of $11 million, but it’s imperative to ponder the other things. For instance, I personally feel like he’s a great fit between AD and Boogie, he’s one of the rare legitimate 3&D players in the league and I feel like he’s entrenched himself in the New Orleans community.

The last thing we need to consider about Jrue: the Pelicans have his bird rights. That complicates the way the front office should approach the offseason. The Pelicans have $84.7 million in guaranteed salary. Add Jrue’s cap hold and that adds up to $101 million — significantly close to the expected salary cap of $102 million which incomplete roster charges are going to push the Pelicans out of range.

Utilizing the stretch provision on the Omer Asik contract ($3.55 million over 7 years) can free up some space. But even if Dell Demps can trade Ajinca (they’re probably showcasing him right now) and Dante Cunningham opts out of his contract (I’m leaning towards yes considering he’s turning 30 and should try for one last big contract in an inflated salary cap), that only opens up a little more than $10 million -- not enough to outright sign another good player (which isn’t much higher than the non-taxpayer mid-level exception). It does create enough space for an uneven trade, though. But after the Boogie trade, the Pelicans probably don’t have enough assets? (They didn’t even have enough assets to supposedly get Boogie but that’s not the point!)

The Pelicans are in a better position, no doubt, but the future is still murky. As it is painfully obvious, New Orleans does not have the right personnel around the Twin Towers. The team went all defense last summer, signing mostly defensive players with the hopes of expanding their offensive games (Hill and Moore). But now, they badly need shooters; reliable, consistent shooters not solid, inconsistent ones like the team has on its roster now.

So, let’s ask again:

Is Jrue worth the max?

That’s a definitive no.

Is he worth somewhere in the neighborhood of $17 million?