PDA

View Full Version : A Realistic Look at JO's chances of Opting out.



Will Galen
07-18-2007, 11:02 AM
The Bones
Jermaine O’Neal signed a seven-year, $123 million contract, the maximum allowed, on July 16, 2003. According to ESPN, and Storyteller's site, JO will make $19,728,000 this year. After this season he has an (ETO) Early Termination Option, which gives him the right to terminate his contract early. JO was born on Oct 13, 1978, so right now he is 28 years old and in his prime. He will turn 29 years old right before the regular season starts this year.


Currently
(2007) $19,728,000..... age 29, this coming season.
(2008) $21,352,500......age 30
(2009) $22,995,000......age 31

If JO opted out he would be opting out of $44,347,500.00 million dollars.


Extension?
JO could sign an extension for up to 4 years with raises of 10.5% each year. (NBA raises are not compounded) The only way I see that happening is if he leads a team to the NBA championship this year. That won't happen, even the Lakers couldn't afford to extend both Kobe and JO. Just for example JO would be making.
(2010) $25,409,475.....age 32
(2011) $27,823,950.....age 33
(2012) $30,238,425.....age 34
(2013) $32,652,900.....age 35
Total $116,124,750

After actually putting the figures down, I would have to say that would be a JO fantasy, because it's not happening!

Well on second thought, it being LaLa land I guess if he was traded to the Lakers and they won three straight championships with him as a major piece it would be possible. Kobe makes a hair less than JO so the Lakers would be paying two players about $65 million at the end of JO's extension.


ETO Invoked
Okay now lets see what a more relistic outcome tells us. If he invokes his ETO, he would have three options.

One) He could then resign with the Pacers for six years with 10.5% raises each year.
Two) He could be part of a sign and trade to another team, and still get the above.
Three) Or he could opt out and just sign with another team. His maxamum would be 5 years with raises of 8%.


The Math
If JO is still with the Pacers next year and opts out, or hes traded and opts out, his likely expectations are about that of Vince Carter's. Carter just opted out and resigned with New Jersey for a rumored "$66 million guaranteed -- which includes four years plus a partial guarantee for a fifth year -- and could make as much as $80 million." Carter is 30 years old. That means Carter will start his new contract at around $13 million. So starting JO at $13m, and giving him 10.5% raises for six years his contract would look like this.
(2008) $13,000,000.....age 30
(2009) $14,365,000.....age 31
(2010) $15,973,325.....age 32
(2011) $17,540,024.....age 33
(2012) $19,381,726.....age 34
(2013) $21,416,807.....age 35
Total $101,676,882

If he started at $14 million you would add $1,547,000 million for each of 5 years. That would be $7,735,000 million more, or $109,411.882 million total.




Now if he opts out and just signs with another team his maximum would be 5 years with raises of 8%.
(2008) $13,000,000.....age 30
(2009) $14,040,000.....age 31
(2010) $15,163,200.....age 32
(2011) $16,376,256.....age 33
(2012) $17,686,356.....age 34
Total $76,265,812

For the purpose of comparing six year periods.
(2013) $19,543.423.....age 35
That would be his pay in the first year if he signed a contract extension. An extension is doubtful at age 35 though. If he did sign an extension the total would be $94,809,235 over six years when including the first year of his extension.

The reality is he would probably sign a new contract and get the minimum of about $6 million, which would be a total of $82,265,812 over six years.



Status Quo
Now lets look at the figures if JO doesn't opt out. He would be starting his 32nd year so lets say he signs a new contract starting at $10 million a year.

(2008) $21,352,500.....age 30
(2009) $22,995,000.....age 31
(2010) $10,000,000.....age 32 Conjuncture. If he would start at $13m, this obviously would be the way to go.
(2011) $11,050,000.....age 33
(2012) $12,210,250.....age 34
(2013) $13,492,326.....age 35
Total $91,100,076


Wrap
Over a six year period the figures are thus;

$116,124,750....If he signs an extension. Obviously JO would think he would have a better chance of signing an extension with a team like the Laker's.

$101,676,882 to $109,411.882.....if he opts out and either resigns with the Pacers or does a sign and trade at either $13 or $14 million. If he thinks he can resign for more than $14 million he will obviously opt out.

$76,265,812 to $82,265,812.....if he just signs with another team and leaves the Pacers with nothing.

$91,100,076.....if he doesn't opt out.

Basically it comes down to what you think JO is going to be worth at certain periods in his life. If this coming year is a year like the past couple he probably won't opt out. If he has a MVP type year he no doubt will.

My conclusion is I see no way JO just walks and leaves the Pacers with nothing. That could cost him $40 million dollars.

indyman37
07-18-2007, 11:06 AM
My conclusion is I see no way JO just walks and leaves the Pacers with nothing. That could cost him $25 million dollars.
I remember like right after the season, someone asked JO if he would even consider opting out. He insisted that he wouldn't opt out and leave the Pacers with nothing. Something about how he wants the best situation for both teams and that he felt he owed it to the organization and it's fans. Sorry, I'm too lazy to look for the link.

Infinite MAN_force
07-18-2007, 11:21 AM
Just based on statements he has made in the past I doubt he opts out and screws us over. He seems to appreciate this franchise and what we have done for him, and he seems like a class guy.

Although I do think he is far more concerned about championship contention than money... I mean if I had like 80 million dollars in the bank I cant imagine, well any amount of money really mattering at all.

ChicagoJ
07-18-2007, 11:24 AM
Vince Carter isn't a post player, and we know post players command salary premiums over wing players and guards.

I know what you're trying to do, but if that is the best comparison you need to add a "post player premium."

2Cleva
07-18-2007, 11:38 AM
Considering Darko just got 9 and has done little, if JO opts out I seriously doubt he's taking a paycut at all.

ChicagoJ
07-18-2007, 11:42 AM
Considering Darko just got 9 and has done little, if JO opts out I seriously doubt he's taking a paycut at all.

Bingo! We have a winner.

He also won't take much of a paycut if he plays out his contract. He just may get fewer seasons on the new contract. But knowing the NBA, he'll get another max contract from somebody.

Look at Peja. Somebody will pay the $$$.

Will Galen
07-18-2007, 11:48 AM
Vince Carter isn't a post player, and we know post players command salary premiums over wing players and guards.

I know what you're trying to do, but if that is the best comparison you need to add a "post player premium."

I did say, "Basically it comes down to what you think JO is going to be worth at certain periods in his life." That was my guess.

JayRedd
07-18-2007, 11:53 AM
Considering Darko just got 9 and has done little, if JO opts out I seriously doubt he's taking a paycut at all.

I believe Darko is getting $7 million per. It's 3 years for $21 million, no?

count55
07-18-2007, 11:55 AM
Oh, without a doubt, JO's taking a pay cut if he opts out. Best case scenario, he's looking at VC/Ben Wallace type money...in the $15 to $16 million dollar a year range.

Bball
07-18-2007, 12:55 PM
But it doesn't matter if he opts out or if he doesn't... both are not good for the Pacers and our long term future.

-Bball

Pacersin2033
07-18-2007, 12:57 PM
But it doesn't matter if he opts out or if he doesn't... both are not good for the Pacers and our long term future.

-Bball

Not really cutting 20 million in salary can only result in good things, considering how bad the team is, and how we would have to overpay a guy to come here. Something we haven't been able to do because of having JOs contract

Bynum Brigade
07-18-2007, 01:21 PM
But it doesn't matter if he opts out or if he doesn't... both are not good for the Pacers and our long term future.

-Bball

Bingo!

Bball
07-18-2007, 01:40 PM
Not really cutting 20 million in salary can only result in good things, considering how bad the team is, and how we would have to overpay a guy to come here. Something we haven't been able to do because of having JOs contract

We can and do go over the cap to sign our own FA's. So depending on the Lux Tax scenario and what existing players we'd need to sign either immediately or in the immediate future, it wouldn't suddenlt be 20 million we'd have available to us to sign an outside FA if JO left.

I'm sure a capinator can predict fairly accurately what we'd be able to pay an outside FA if JO opted out and I'm fairly comfortable in saying it wouldn't be JO's 20mil.

-Bball

Will Galen
07-18-2007, 03:00 PM
We can and do go over the cap to sign our own FA's. So depending on the Lux Tax scenario and what existing players we'd need to sign either immediately or in the immediate future, it wouldn't suddenlt be 20 million we'd have available to us to sign an outside FA if JO left.

I'm sure a capinator can predict fairly accurately what we'd be able to pay an outside FA if JO opted out and I'm fairly comfortable in saying it wouldn't be JO's 20mil.

-Bball

Jermaine O'Neal........$19,728,000
Troy Murphy.............$9,206,349
Mike Dunleavy..........$8,219,008
Marquis Daniels.........$6,373,900
Jamaal Tinsley............$6,300,000
Jeff Foster.................$5,500,000
Ike Diogu..................$2,286,360
Danny Granger..........$1,516,800
Shawne Williams........$1,470,360
David Harrison...........$1,734,316
Kareem Rush.............$770,610 (a)
Stephen Graham.........$770,610
Guaranteed................$100,000 (b)
----------------------------
Total................$63,976,313..........($3,888, 687) under the lux tax as of this date.

Removing JO's salary puts us at $44,248,013.

The NBA salary cap for 2006-07 is $55,630,000.
The luxury tax threshold is $67,865,000

We would be $11,381,987 under the cap.

gng930
07-18-2007, 03:27 PM
Thanks for crunching the numbers Will.

The Ben Wallace and Vince Carter comparisons are completely flawed. Both were older at the time of the deal. Ben Wallace only impacts one side of the floor and Vince Carter is a perimeter player.

The original figures are also a misrepresentation, specifically the projections for 2013-2014. So he won't get 20mil in free agency that year but a team will willingly pay it just because he happens to be in his sixth year? Best case scenario, he gets a team option for that year in which case it's unlikely the team exercises it. Nobody wants to guarantee, 20+ mil to a 35 year-old, especially one with a significant history of injuries. So a better representation would be (over the next 5 years):

1) Opt-out and stay or S&T: 80mil
2) Opt-out and sign with another team: 76mil
3) Don't opt-out: 78mil

Don't forget option #3 comes with the risk of any major injury before 2010 having a significant impact on his value.

The posts about JO not wanting to screw over Indy are valid but only to a certain extent. If a team under the cap simply refuses to send out any players and JO is set on going there, there's simply nothing you can do about it. Teams aren't interested in helping other teams when they don't need to. Exhibit A: Chicago stealing Wallace from the Bulls

Pacersin2033
07-18-2007, 03:30 PM
Thank you very much Galen.

See if JO opted out and we end up trading away our first rounder for a headband(a possible move judging by actions as of late), and Rush, Graham, and Harrison are not resigned we would have 13+ million to offer to a player

naptownmenace
07-18-2007, 03:31 PM
The NBA salary cap for 2006-07 is $55,630,000.
The luxury tax threshold is $67,865,000

We would be $11,381,987 under the cap.

We would be a little further under the cap because the cap usually increases each year, based on league revenue of the previous season.

But I think the chance of JO opting out of his deal has to be less than 5%. He'd be an idiot to opt out... and I definitely don't think he's an idiot.

The only chance the Pacers have of getting back under the cap is if they can trade for somone with an expiring high-dollar contract. A player like Antwan Jamison ($16,360,095) and a future draft pick and/or cash would be a good deal for the Pacers to pursue if they want some cap-space after next season.

Bball
07-19-2007, 01:41 AM
We would be a little further under the cap because the cap usually increases each year, based on league revenue of the previous season.

.

But also the amount we pay other players goes up due to their own yearly increases. Plus, we'd either be signing one (or more) of our own or leaving room to do it the following season.

So we're back to what I said in the first place. Dropping JO's 20 mil salary isn't going to leave us 20 mil in cap space.

To tell you the truth, as long as Walsh is in the FO it would mean the Simons save 20 million because we wouldn't be spending any of that on a FA. We'd spend the MLE (probably) and that would be the end of the story. Then it would be reading the local press about our wonderful draft pick and the up and coming young guys.

The Pacers do not choose to be players in the star player FA market.

-Bball

Will Galen
07-19-2007, 08:04 AM
The Pacers do not choose to be players in the star player FA market.

-Bball


What any of us think is happening in the front office isn't necessarily true.

In your case I think you went on tilt a long time ago and it's effecting your view of management. You now just see what you want to see.

You say the Pacers do not choose to be players in the star player FA market? However, Walsh and one of the Simon brothers flew to Florida to negotiate for Tracy McGrady?

All you posters out there that want new management, what makes you think someone new would be better? It sure appears to me that getting lucky with ping pong balls has more to do with contending consistently in the NBA than anything else. Get a Shaq or Duncan and you are all set for ten years, and even then you have your ups and downs.

We have good management! We were contenders in the late 90's and reached the finals in 2000. We started a rebuild and 4 years later we were contenders again and won 61 games. We are now rebuilding again and in a short time will be contenders again.

Bball
07-19-2007, 09:01 AM
What any of us think is happening in the front office isn't necessarily true.

In your case I think you went on tilt a long time ago and it's effecting your view of management. You now just see what you want to see.

You say the Pacers do not choose to be players in the star player FA market? However, Walsh and one of the Simon brothers flew to Florida to negotiate for Tracy McGrady?

That would've been a sign and trade.




All you posters out there that want new management, what makes you think someone new would be better?


Because we can't let the fear of it being worse stop us from trying to improve what we have now (which is not very good and hasn't been for quite some time).



It sure appears to me that getting lucky with ping pong balls has more to do with contending consistently in the NBA than anything else. Get a Shaq or Duncan and you are all set for ten years, and even then you have your ups and downs.

You won't be getting lucky with the ping pong balls if management puts the entire focus on just making the playoffs. You'll always be middle of the pack...

Although, the boat has so much so sailed on Walsh that we might not be able to stay middle of the pack under him so maybe we'll be getting those ping pong balls afterall. But I have no faith he'd make the right pick. He's way past his window of effectiveness.



We have good management! We were contenders in the late 90's and reached the finals in 2000. We started a rebuild and 4 years later we were contenders again and won 61 games. We are now rebuilding again and in a short time will be contenders again.

We started a rebuild in '99 because he so misjudged the team that they made the finals in spite of him, not because of him.

But back to the topic at hand, keeping JO at this point is the worst option of all for us as long as we're getting something tangible in return. The truth is, people aren't knocking down our doors to get him so our bargaining power isn't that high. Of the teams that would be interested, we just need to negotiate their best deal and pull the trigger. But we can't assume JO is far and away their best target and only option.

JO opting out or not opting out are both net losers for the Pacers.



-Bball

JayRedd
07-19-2007, 10:39 AM
We would be $11,381,987 under the cap.


We would be a little further under the cap because the cap usually increases each year, based on league revenue of the previous season.

It would likely be say $2 million more, putting us around $13.5 million under the cap if JO opts out next summer. But we'll also likely be offering extensions to both Danny and Ike simultaneously with being FA market players.

I believe Danny and Ike would still be only receiving the final-year dollar value on their rookie deal in the coming 08-09 season ($2.9 million for Ike, $2.3 million for Danny) so we would technically still have all of that $13.5 million to play with, but with both of those guys probably commanding around $7 million per year starting in 09-10, we'd be beginning to flirt with luxury tax land in the years to come if we went out and spent much over $10 million on a free agent.

Of course, other things can change and we could shave other contracts away by then....but that should be factored into the current outlook somewhat.

idioteque
07-19-2007, 03:15 PM
JO won't opt out for the exact same reason that we haven't been able to trade him: there are serious concerns about his health right now and that will result in a sizable cut in his salary. I think that he'll miss a similar number of games next year, which will only further put these concerns to light.

If I was a GM there is no way I'd pay JO VC type money. VC had injury concerns earlier in his career but he's been healthy for a decent time now. With the beating JO takes, I wonder if his knee will ever be all that good.

I almost understand the overspending on Darko because there is a chance you could catch him in reaching a prime and he becomes a great player. With JO, you're going to most likely get 18 and 10 or so for 60 games, for about two years, with ALL of those numbers decreasing in the future. For Darko, you get a healthy player who can give you possibly 16 and 8 for 5-6 years in 70+ games.

Will Galen
08-06-2007, 09:49 PM
Bump

With all the new talk about JO opting out I thought this thread should be bumped.

Kstat
08-06-2007, 09:52 PM
JO isnt opting out. If he was, he wouldn't be so keen on getting traded THIS summer.

sixthman
08-06-2007, 10:02 PM
I'll also betcha JO has dreams of making some extra endorsement and promotions dough in a major market, something he's not getting much of in is his current situation.

Will Galen
08-06-2007, 10:05 PM
JO isnt opting out. If he was, he wouldn't be so keen on getting traded THIS summer.

I agree he won't opt out with the Pacers. He wants traded to the Laker's so he can either get an extension or opt out and sign a new contract starting at about $15 million per year. Either way would be worth well over a hundred million dollars to him.

Opting out with the Pacers could cost him $40 million.

Shade
08-06-2007, 10:13 PM
JO isnt opting out. If he was, he wouldn't be so keen on getting traded THIS summer.

Agreed.

I say we make him stay and "suffer." And as a bonus, the Lakers also get to suffer. :devil:

I'm now more anti-JO trade than ever.

JayRedd
08-06-2007, 10:23 PM
JO isnt opting out. If he was, he wouldn't be so keen on getting traded THIS summer.

Not sure that proves anything.

A guy with his knees isn't really gonna be someone with patience as a virtue anymore.

DisplacedKnick
08-06-2007, 10:53 PM
Agreed.

I say we make him stay and "suffer." And as a bonus, the Lakers also get to suffer. :devil:

I'm now more anti-JO trade than ever.

Another season with a malcontent on your team? I mean, that's worked out so well for you in the past ...

Shade
08-06-2007, 11:02 PM
Another season with a malcontent on your team? I mean, that's worked out so well for you in the past ...

What's he gonna do? Pull up lame? Great, then we get a much better draft pick and the Lakers continue to suck while Kobe loses it again.

There's not a whole lot more damage that can be done to us at this point.

DisplacedKnick
08-06-2007, 11:13 PM
What's he gonna do? Pull up lame? Great, then we get a much better draft pick and the Lakers continue to suck while Kobe loses it again.

There's not a whole lot more damage that can be done to us at this point.

Until he gets Granger, Shawne, etc., so unhappy with being Pacers that they start lobbying for S&T's rather than signing extensions.

wintermute
08-07-2007, 12:09 AM
Until he gets Granger, Shawne, etc., so unhappy with being Pacers that they start lobbying for S&T's rather than signing extensions.

ouch. you think of the most cheerful things.

i don't believe in holding on to j.o. in order to "screw" him. we should do what's in the best interest of the team, and as rim pointed out, holding on to a bitter j.o. is probably not it.

for what's it worth, i don't think j.o. really intends to opt out. obviously he's just using it as leverage. but if he wants out bad enough to go to the press, i say let him go.

Naptown_Seth
08-07-2007, 01:19 AM
I see a bunch of people talking up JO's value to other teams. Odd they don't think this is what he is worth if it's paid in Pacers money though?

Meanwhile I also see that Ben's money isn't the same because he only impacts one end (guess offense boards don't help now). Ben also STAYS HEALTHY. JO will be an injury risk to any team signing him, as well as an injury risk to himself. He could take less money if he opts out and then end up being hurt before his Pacers deal would have run out, thus ending with a modest hit in the bankroll (compared to the money in Indy before he got injured).

Opting out is NOT a good option. He WILL NOT get big money unless a team actually has the cap space to sign him if he goes that way, and if they have cap space it probably means he'll be stuck rebuilding.

Would JO opt out into a NO/CHA/ATL free agency pool for example? Not if the point of opting out is to avoid youth movements and rebuilding. What vet championship caliber team is $19m under the cap???

JayRedd
08-07-2007, 02:15 AM
Opting out is NOT a good option. He WILL NOT get big money unless a team actually has the cap space to sign him if he goes that way, and if they have cap space it probably means he'll be stuck rebuilding.

Would JO opt out into a NO/CHA/ATL free agency pool for example? Not if the point of opting out is to avoid youth movements and rebuilding. What vet championship caliber team is $19m under the cap???

S&Ts are allowed.

Naptown_Seth
08-07-2007, 12:39 PM
No, an S&T isn't the same as opting out where the Pacers get nothing.

JO goes full FA. Hurray for him. Pacers say "C ya", JO turns back to look at the FA market and says "hmmm, 19m from Atlanta for 3 years or 14m from Millwaukee, or 8m from the Lakers" (assume they made moves to get some cap space)...that's either a huge salary hit or he's forced to join the exact same situation he's trying to avoid.

In other words the Pacers have A LOT more leverage with JO than he does with them. If he walks totally they at least get cap space. If they are rebuilding anyway then this means another high pick and the chance to get a decent FA too. Yes that next year getting there would be rough, but with 1 good pick (if you assume he opts out because this year went poorly) already on the team, you are adding 2 more solid players to Danny, Ike, Shawne and perhaps Quis. That team is back in the playoff hunt almost as quickly as if you went for Bynum now.

So the Pacers absolutely do not need to get anything for JO. It would hurt but the writing would be on the wall by then anyway. OTOH JO almost 100% gets screwed if he doesn't get the Pacers to trade him. He needs them to get the salary he wants AND the destination he wants. Going true FA will not get him that, not where things are now.

Hicks
08-07-2007, 12:51 PM
I think JO would take the $8mm a year to play in LA.

JayRedd
08-07-2007, 12:56 PM
He can opt out and then get a sign and trade done.

We're not gonna say "No, we won't facilitate it" for spite reasons when we could get players/picks that we want back. This isn't 5th grade.

Either the Knicks, Lakers, Mavs, Bulls, etc will offer him $12-15 per for 4 years next summer unless he has a major injury in the next 10 months.

DisplacedKnick
08-07-2007, 03:43 PM
Either the Knicks, Lakers, Mavs, Bulls, etc will offer him $12-15 per for 4 years next summer unless he has a major injury in the next 10 months.

Only if Randolph crashes and burns.

Surely even Isiah could see that playing JO at SF would be stupid.

JayRedd
08-07-2007, 04:00 PM
Only if Randolph crashes and burns.

Surely even Isiah could see that playing JO at SF would be stupid.

True.

But yall are just a hypothetical for me here though, so stop undermining my points, would ya. ;)

All I'm saying is somebody will want him and somebody other than just horrible teams with cap room will be willing to give up a decent chuck of change for at least four years for a 29-year-old, dominant post player.

We can replace the Knicks with Miami, Washington and Houston if yall like.

Naptown_Seth
08-07-2007, 04:44 PM
He can opt out and then get a sign and trade done.

We're not gonna say "No, we won't facilitate it" for spite reasons when we could get players/picks that we want back. This isn't 5th grade.

Either the Knicks, Lakers, Mavs, Bulls, etc will offer him $12-15 per for 4 years next summer unless he has a major injury in the next 10 months.Then why is he opting out in the first place? To get MORE, to alter his deal? He's not going to get more money by opting out, and he can be traded even if he doesn't opt out.

Explain to me what opting out does for him, what's his motivation? In the context he said it was "if the situation is ugly I can always get out", but that's parachute time as in "if you won't trade me I'll just sign elsewhere", that's as spiteful as the Pacers saying "fine, don't ask us for an S&T then".

If he's taking that step then it means they are already past doing a trade.

ChicagoJ
08-07-2007, 07:07 PM
If it comes to that, I'd probably rather have the cap space than whatever we'd take back in a S&T.

Remember, I was okay with letting Brad walk to Utah or Denver. I just didn't want to take back a stiff like Pollard.

:twocents:

Will Galen
08-07-2007, 08:49 PM
I think JO would take the $8mm a year to play in LA.

Disagree, for several reasons.

If JO opts out he will lose his bird rights. To get them back he would have to sign for at least three years. Since he would be a free agent what he signs for is limited to how far a team can get under the salary cap. The Laker's are already at the salary cap for next year. All they could pay him would be the mid-level exception of $6 million.

Players at the end of their careers play cheap, not all stars at the height of their earning power. If the Laker's could pay him $8 million he would still lose $27 million dollars in the first two years of the contract. However since it's likely all they could pay him is the ML, he would be losing more like $31 million over the first two years.

Plus he would be losing money on the third year of his contract too. So opting out to sign with the Laker's could cost him $40 million dollars. Players just don't give up that type of money at the height of their earning power to go where they want to go.

A recent example is Brad Miller. He really wanted to stay here but he went with the money and so will JO.