OT: Varejao Signs Offer Sheet with Charlotte

by San Francisco Slim on Dec 4, 2007 9:59 AM PST Comment 11 comments

I thought this is interesting news, since we've talked about this guy as a possible Warrior.

http://sports.espn.go.com/nba/news/story?id=3141032

The Bobcats signed Varejao to a three-year mid-level deal for $17.4 million. The Bobcats are way under the luxury tax but couldn't quite do this deal under the salary cap. The deal includes an opt out after two seasons, at which time I believe Varejao would be an unrestricted FA and the Bobcats wouldn't hold "bird rights" on him. Maybe somebody could check on that.

Cleveland has a week to match the offer. Their problem, and the reason why they haven't come to terms with Varejao in the first place, is that they are already over the luxury tax. If they match this deal, they will be close to $9 million over the tax level, which means they will have to pay an additional $9 million in taxes. It makes one wonder why Danny Ferry has a job. I mean, it's not like there a lot of All-Stars on that team besides LeBron.

This FanPost is a submission from a member of the mighty Golden State of Mind community. While we're all here to throw up that W, these words do not necessarily reflect the views of the GSoM Crew. Still, chances are the preceding post is Unstoppable Baby!

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Update

According to the Beacon-Journal, the Cavs will exercise their right to match:

Anderson Varejao soon will be a member of the Cleveland Cavaliers again.

According to a source close to Varejao, he has signed an offer sheet with the Charlotte Bobcats worth $11.3 million over the next two seasons with an option for a third season that could make the deal worth $17.4 million. The Cavs have not received the offer sheet, but team sources said they probably will match the offer on the restricted free agent.

The Bobcats used their $5.3 million mid-level exception to sign Varejao, so that's what the Cavs would pay him this season. Varejao signed the deal Monday in Charlotte and is expected to fly to the Los Angeles headquarters of his agent, Dan Fegan, today.

This is a MAJOR victory for GM/frontoffices- Varejao wanted to leave and/or get a ridiculous $8-10M/year contract with no leverage other than the Cavs "needing" him. While he's a productive big man and a solid, solid backup PF/C, he's not even close to worth that type of money. Milcic signed for only $7M/year, and he's younger with more offensive upside (and a superior shotblocker).

We have a number of RFAs, so the victory for Danny Ferry is a victory for Mullin and the Warriors. Message to agents: learn the RFA rules, you have no leverage.

24 > 23

WE NEED A BACKUP POINT GUARD

AIM: Jetforze

by OptionZero on Dec 4, 2007 12:42 PM PST reply actions 0 recs

Varejao

There's a strange salary structure in Cleveland for certain. The problem they're facing now is that Varejao is going to cost them quite a bit if they keep him, but they aren't nearly the team they were last year when he's not available. Sure, he's a flopper who doesn't seem to have much in the way of offense, but it appears that defense (however he plays it, even if it's ugly) and above average post rebounding really helps a whole lot more than most people give it credit for.

Larry Hughes at $12 mil per is a mistake they're paying for. Good player? Yeah, at times. Worth that amount of money? Nope. Not even close.

by jae on Dec 4, 2007 12:47 PM PST reply actions 0 recs

Lux Tax

That slipped my mind for a second. Varejao will actually cost them not only the $5M this year, but nearly that much as well in tax payments.

Oh well, that's for the Warriors to spend next year on Biedrins.

24 > 23

WE NEED A BACKUP POINT GUARD

AIM: Jetforze

by OptionZero on Dec 4, 2007 12:49 PM PST up reply actions 0 recs

leverage

In each ensuing CBA, loopholes get addressed that prevent players from being squeezed and prevent teams from being held hostage, but in the mean time, the battle wages over those loopholes not yet seen.

I suspect that how the market plays this year for RFA may not dictate how it plays next year. It seems like the CBA is a strategy game where the tactics used in any season/offseason tend to be played one way, only to have the other side figure out a counter. My guess is that RFA will not do what Varejao did, but will find some other way to get leverage. The key for Mullin is to figure out what the next player strategy is going to be so he can be ready for it with a slightly better offer that keeps players on the court before whatever counter measures Fegan and company devise to try to gain leverage.

by jae on Dec 4, 2007 1:11 PM PST up reply actions 0 recs

RFA counter move: Qualifying offer?

Might the counter to team RFA leverage be for more players to take the qualifying offer and hit UFA?

Under RFA, the team has right of first refusal; under UFA, the player could actually leave.

It's a whole lot more threatening in a negotiation if you could get up and walk out and sign elsewhere, even if it's for less money or different terms than what the "home" team could potentially offer.

Pietrus did it, and now his departure (to MIA?) is virtually assured.

There's a risk of injury or decline, sure, but you got to take some chances if u want the mega$$$. At least they gain veto power over trades.

Something to ponder.

I definitely do not want to mess around with Biedrins as a UFA.

24 > 23

WE NEED A BACKUP POINT GUARD

AIM: Jetforze

by OptionZero on Dec 4, 2007 2:38 PM PST up reply actions 0 recs

RFA

Taking the QO is probably next year's counter move. I could see that. The threat of leaving in a year would be used to leverage an extension.

The QO doesn't serve some players as much as others though. The problem with the QO is that unlike things like the MLE, the QO is based on the previous salary. If you were a high pick, the QO is accordingly high. If you were a later first rounder or second rounder, it may not be much above the NBA minimum. There's no reward for outperforming your draft position. Taking the one year deal accordingly brings a different level of risk vs. injury or other change in perceived value. It was a better deal for Pietrus than for Varejao even though the latter is a much better player.

Varejao's QO was 1.2 million. Waiting a year means diluting whatever next contract he has by virtue of a year at that price if he was playing the strategy of "I'll take the low salary now for a bigger payday." Let's assume on the open market he could get a Darko deal averaging about $7mil per. The bigger payday would be bigger potentially, but essentially divided over one more season. Waiting a year on a big contract could effectively mean the difference between a 5 year/35 million really being a 6 year 36.2 million. That's a million a year over the life of the contract.

by jae on Dec 4, 2007 3:16 PM PST up reply actions 0 recs

True

Good point about draft position.

While the QO year dilutes the future pay day, there's one element that might be worth it:

Deciding where you want to play

We won't "really" know if guys like Charlie Bell or Varejao ever truly wanted to leave and go elsewhere, but they really don't have any choice because of the home team's right to match.

I have to think Joe Johnson is an anomaly where PHX let him leave...although they got a good package in return (they still have not cashed in that unprotected ATL first rounder).

24 > 23

WE NEED A BACKUP POINT GUARD

AIM: Jetforze

by OptionZero on Dec 4, 2007 3:24 PM PST up reply actions 0 recs

Luxury Tax

According to Hoop Hype, the Cavs were already $3.5 million over the tax, prior to this deal. This puts them at $8.8 million over the tax, which causes an extra $8.8 million payment.

Considering they still don't have a PG, I wonder if this signing is really worth it. Perhaps they should do a S&T, sending Varaejo and Pavlovic for Andre Miller. Miller is on the decline, but they need to build to different strengths.

by San Francisco Slim on Dec 4, 2007 1:39 PM PST up reply actions 0 recs

No sign and trades possible.

If it's true that he's signed an offer sheet with Charlotte, it's not possible to sign-and-trade Varejao. Once the offer sheet is signed, the Cavs can match or they can let it go, but they have to accept the contract as it is and cannot use matching as a means to immediately move him.

Too late now, but a sign-and-trade with Varejao before this would have required that he agree to it. He is under no obligation to help out the Cavs with such a deal and doesn't have to accept one. This seems to be left out in the 99% of the S+Ts proposed.

by jae on Dec 4, 2007 2:25 PM PST up reply actions 0 recs

It's not just Larry Hughes

Cleveland is facing luxury tax hell because of the combined $32 million for Hughes, Eric Snow, Pavlovic, Ira Newble, Cedic Simmons - all useless players. The Warriors salary situation looks great in comparison.

by San Francisco Slim on Dec 4, 2007 1:58 PM PST up reply actions 0 recs