Jazz will likely match $63M offer
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What's next for Hayward, the Jazz and the Hornets? And what can other players learn from Hayward's handsome contract? Let's break it down.
What's next for the Jazz?
All along, Utah has maintained publicly that it would match any offer to Hayward. Although it's worth exploring a sign-and-trade option with Charlotte, which would be possible before Hayward signs the offer sheet, any deal that doesn't include one of the Hornets' recent lottery picks ( Michael Kidd-Gilchrist, Cody Zeller or Noah Vonleh) would make little sense for the Jazz. In that case, matching the offer is prudent.
To be clear, max money -- even if it's the smaller maximum for players in their first five seasons -- is rich for a player who has never contributed more than 5.2 wins above replacement player (WARP) in the NBA. Hayward will make more over the next four seasons than Kyle Lowry of the Toronto Raptors, who posted more WARP this past season (14.4) than Hayward has in his entire career (13.5).
The problem is Utah can't simply go out and sign Lowry. For one, getting top-tier free agents to sign with a lottery team in a smaller market is always going to be a challenge. For another, veterans don't fit the Jazz's rebuilding timetable. Hayward, who is just 24, is a much better fit in Utah and offers the hope of growing into this contract over the next four seasons. Such prospects aren't available in free agency without overpaying.
From the Jazz's perspective, the money isn't a huge concern. If Utah matches, the team will still be able to clear $12 million in cap room, which is likely to be used to add assets in a trade like the Jazz made with the Golden State Warriors this past summer. Also, Hayward signing an offer sheet has the upside of limiting his raises to 4.5 percent per year -- less than the salary cap is likely to grow over the next few seasons, which means Hayward will take up proportionately less of the cap over time. (The downside is the offer sheet includes a trade kicker, per Adrian Wojnarowski of Yahoo!, which makes it slightly more difficult to trade if Hayward is making less than the max possible salary as the cap increases.)
Ultimately, it doesn't make sense for a rebuilding team such as Utah to give up one of its best young players. The prospects behind Hayward in line for pay increases next season ( Alec Burks and Enes Kanter) are far less sure things. A max offer sheet will make the Jazz swallow hard, but it's what they must do.
What's next for the Hornets?
While most of the NBA world hopes for LeBron James and Carmelo Anthony to announce their decisions quickly, Michael Jordan and company are preaching patience. The longer those stars put free agency on hold, the better the chances that Charlotte's secondary options are still available when and if Utah matches the offer to Hayward.
That's the risk of tying up cap space in an offer sheet before the end of the moratorium. In theory, the Hornets could see other wing options, such as Chandler Parsons and Lance Stephenson, gone from the market by the time they can move on from Hayward. But Parsons is in the same scenario as Hayward as a restricted free agent, and the Stephenson market hasn't moved quickly. Because Charlotte can offer him far more than the Indiana Pacers, it's likely Stephenson will wait around to see if he's next in line.
The Hornets are in an interesting position right now. With Josh McRoberts committing to sign with the Miami Heat, they have some $18 million in cap space available, with little need in the frontcourt or at point guard. If Charlotte wants Stephenson, he's surely theirs. It's unclear how interested the Hornets really are, but if the Hayward offer sheet gets matched and Parsons ends up back in Houston, there are no other young wings on the market who are established starters. If not Stephenson, Charlotte might have to go the trade route to upgrade on the wing.
The lesson for the Class of 2011 and beyond
Don't be scared of restricted free agency. Conventional wisdom has been that the market for restricted free agents is depressed because the threat of a match can scare off suitors. However, in researching Stephenson's market value this past season, I found that on average restricted free agents have made more money than unrestricted players with identical statistics.
Hayward's situation is a perfect example. To have any chance of wresting him away from the Jazz, the Hornets needed to make his offer sheet as lucrative as possible. Such offers are more likely in the modern NBA, in which the new collective bargaining agreement and better cap management mean that each year there are more teams with significant cap space than there are top-tier free agents to go around.
There is some risk in turning down an extension and going to restricted free agency. If Larry Sanders of the Milwaukee Bucks were on the market, there's no chance he'd get a deal as lucrative as the four-year, $44 million extension he signed before the 2013-14 season. For players who can avoid both suffering an injury in a nightclub fight and getting suspended for a violation of the league's recreational drug policy, there's typically little downside. Again, Hayward is a perfect example. He's coming off a relatively disappointing season yet got maxed out anyway.
The interesting contrast is Hayward's Utah teammate, center Derrick Favors. Favors took a four-year, $48 million extension in October. In this market, a (soon-to-be) 23-year-old center with starting experience surely would have matched that money and might have gotten a max offer.
That's important to note for starters up for extensions this fall -- a group that includes Jimmy Butler, Kenneth Faried, Kawhi Leonard, Klay Thompson, Nikola Vucevic and Kemba Walker. Don't sell yourselves short in negotiations. A big payday could be an offer sheet away.
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