Several factors make it challenging to assess the value to the Wolves of signing Gorgui Dieng to the four year, $64 million extension both parties agreed to earlier this week.
When a team makes a trade or signs a player to a new contract the initial reaction of a fan is to instantly put on their fake GM hat and assess the value of the deal. If you’re from Minnesota you know about the outcries directed at the Minnesota Twins for the Joe Mauer contract (8 years, $184 million). Or more recently, the disdain after the Minnesota Vikings traded a first round pick for Sam Bradford.
Value is the name of the game in team management — when the deal is done, will it be regarded as a net positive?
Sources: Gorgui Dieng finalizing $64M extension with Minnesota. @ShamsCharania report on @TheVertical. https://t.co/bS7PCqVGwS— The Vertical (@TheVertical) October 31, 2016
Players entering their fourth year in the NBA are eligible for a contract extension under current league rules. This rule allows a player’s current team to negotiate a contract in advance of the fourth and final year of that player’s rookie contract. The new dollar value is not paid (or recognized on the salary cap) until the following season.
Dieng’s contract going forward per The Vertical:
2016-17: $2,348,783 (final year of rookie deal)
2017-18: $14,112,360 (beginning of extension)
For the time being, the $16 million in average salary marks Dieng as the highest paid player on the Wolves roster.
The Negative Value in the Dieng Extension
A primary issue is the effect on cap space for the Wolves next offseason. The $14.1 million Dieng is scheduled to make now counts against the cap next summer when the Wolves hit the free agent market. Had the Wolves waited and allowed Dieng to reach restricted free agency, his cap hold (effect on the salary cap) would have only been $7 million.
A player's cap hold is determined by their previous salary. Dieng has a relatively low salary this season, and therefore low cap hold, because he was not a lottery pick in the 2013 NBA draft. Signing Dieng when it was not a requirement costs the Wolves over $7 million in spending power.
But the salary cap is rising, how much of an effect is $7 million?
With an additional $7 million the Wolves would have been approaching $40 million in cap space next offseason — as much spending power as anyone in the league.
Option 1: $40 million would have given the Wolves the ability to bring in a max contract player (think Paul Millsap or Serge Ibaka) and a role player (think J.J. Reddick). Or, two starting caliber players (not max contract) players.
Option 2: The $7 million drops that potential down to only one max contract and nothing else. Or, two good role players.
Had the Wolves not extended Dieng, they could have still resigned him after pursuing option 1. Dieng would have become a restricted free agent giving him the ability to test the market while the Wolves would still possess the restricted right to match any contract.
The most recent example of doing this is two seasons ago when the San Antonio Spurs opted to not extend Kawhi Leonard. By not extending Leonard, the Spurs had more cap flexibility that following offseason. The Spurs were then able to sign unrestricted free agent LaMarcus Aldridge. After signing Aldridge, the Spurs were still able to sign Leonard to any contract.
This is not unique to Leonard and the Spurs, the following season the Detroit Pistons also opted for cap flexibility passing on extending their sure max contract player Andre Drummond. This cap flexibility helped the Pistons sign or trade for other expensive key players Reggie Jackson and Tobias Harris.
The Dieng and Towns Frontcourt
On top of the salary implications, another elephant in the room exists. After committing a long-term contract to Dieng the question of the Dieng and Towns frontcourt becomes more pertinent in the long run. I would argue the verdict is still out there. Towns is still evolving and comparing how Sam Mitchell coached the frontcourt compared to Tom Thibodeau is relatively apples and oranges. It very well could work.
However, on the surface, a Dieng and Towns frontcourt is not a perfect fit. The ability to have the option of using a center on the perimeter is an invaluable asset in the NBA today. The list of elite centers in the NBA who can stretch to the three point line is short — Demarcus Cousins, Marc Gasol, Anthony Davis, and Towns. When Dieng is on the floor, part of that advantage is mitigated. Towns becomes a stretch-four.
Sure there is a movement towards a position-less NBA, and all things equal I hear that argument. But things are not equal with Dieng and Towns. Of course, they couldn’t be — Towns is elite at most everything. And this is inherently unfair to Dieng. That said, Dieng is not a multi-positional player. Dieng is a center. And therefore playing him at center makes Towns the de facto power forward.
If the Wolves could have a power forward of equal value to Dieng at 4 years, $64 million I have to think they would jump on that.
Trading Gorgui Dieng?
Signing Dieng to a four-year extension is by no means a commitment to Dieng through the 2021 season. The waters of the Towns-Dieng fit will be tested and that result will dictate the future of Dieng. There is a precedent here. One example is Jrue Holiday, the point guard of the New Orleans Pelicans.
Like Dieng, prior to his fourth season, Holiday was given an extension from his rookie deal. That fourth season Jrue Holiday had a big year, made the all-star team and that contract extension enviable.
After Holiday’s all-star campaign he was viewed as a net positive asset. Before the deal kicked in the following season Holiday was traded to the New Orleans Pelicans for two first round picks (one of which was Nerlens Noel).
At 26 years old, Dieng’s extension of 4 years, $64 million could already be viewed as a net positive asset. 30-year-old center Timofey Mozgov signed the same contract as Dieng this past offseason with the Los Angeles Lakers and 29-year-old center Ian Mahinmi also signed a 4 year, $64 million contract with the Washington Wizards.
The salary cap will only increase next offseason, meaning players perceived marginal value will increase and therefore will be signing for higher dollar figures. The $16 million per year Dieng signed for will likely be viewed as a positive value on paper. So this deal should not be viewed as a bad dollar figure.
The Opportunity Cost of Gorgui Dieng
The question is one of opportunity cost — Was locking in Dieng at $16 million per year worth sacrificing salary cap space even if it meant retaining Dieng next offseason would cost more into the $20 million per year range?
There are positives to the Dieng deal, but it is not necessarily a move that maximizes the Wolves future potential. Elite teams consistently assess the opportunity cost accurately. The actual value of the Gorgui Dieng extension is a complex calculation that will have a real impact on the Wolves pursuit of a championship in the future.