Assessing Value on the Orlando Magic Roster: Class Warfare

The Orlando Magic gave out two big contracts this summer to players coming off rookie contracts. Did they get good value? A new metric evaluates it.

We are taking a bit of a break on this edition of the Orlando Magic value assessment from our study of salaries and PER and the comparison analysis we have been doing.

The crude measure we have been using is just trying to scratch surface at linking value with salary and figuring out where everyone falls on the scale. Again, it does not have much of a predictive value yet.

There is work being done to determine “market value” or try to put production in terms of dollars and cents. Remember unlocking this makes being a general manager a whole lot easier as you can properly assess value based on production. That would be the dream right?

Again, we will continue our series assessing value soon with a look at Evan Fournier and the rest of the starters. We have already done the role players and the newcomers.

Peter Nygaard of Nylon Calculus created a formula using Value Over Replacement Player to determine a “market value.” From there, Nygaard believes you can subtract the players actual salary to get “Value to Contract.” You can get more details on the formula from Nygaard in his post.

In essence though, what does this mean?

As Nygaard goes on to say, it really only tells us value in certain subsets of players — minimum contract players, rookie contract players, lower middle class (all players from minimum to the mid-level exception of $5,305,000) and upper middle class (all players above $5,305,000 to the max level).

In Nygaard’s conclusion, he notes that there is no perfect way to build a contender. The Cavaliers, Warriors, Spurs and Hawks are built almost completely differently.

What we want to do is look closer at what this means for the Magic and their current salary makeup.

Next: Rookie Contracts

Rookie Contracts

The Magic in 2015 had a lot of guys on rookie contracts. That was by design. Rookie contracts are notoriously cheap. They are slotted salaries based on draft position and so teams do not have to worry too much about salary. It is really just about getting the most value out of these players and watching them out-produce their draft position and salary.

Even if a player does not hit, it is not a huge hit to the books.

We will save Nikola Vucevic and Tobias Harris for the next slide so we can discuss what their production looks like on their new salaries. For now, here are the Magic’s rookie-salary players and their market value and Value to Contract Ratios.

The caveat with rookie contracts is that they are under-market salaries. That is why it is best to compare rookie contracts together.

Here is the graph from Nygaard of rookie contracts:

Elfrid Payton and Victor Oladipo gave the Magic the best value. That is good news as the Magic are tying a good chunk of their future to those players. Most of the players on the rookie scale have a negative VTC, so seeing the Magic get good value out of Oladipo and Payton is a very encouraging sign.

The solid value from Evan Fournier is also encouraging. Although the lower value may suggest the Magic should hold off on offering him an extension and watching him for another year to see if his value meets expectations.

The other players on rookie salaries appeared to play a bit below the median for this group of players.

The Magic are relying on internal improvement to make this season work. They will need to see it from a lot of players in this group.

Then again, the Magic’s key players in Oladipo and Payton seem to be contributing above average value. The hope is that continues while they remain at this salary level.

Next: The Extensions

The Extensions

The big question Magic fans will likely be asking when it comes to value this year is whether the Magic got good value for Nikola Vucevic and Tobias Harris on their new deals.

Vucevic signed a four-year, $52-million extension in October and Harris inked his four-year, $64-million deal in the summer. Both are getting paid substantially more than they were last year.

So first, let’s look at last year’s numbers:

Under the rookie scale, both Vucevic and Harris grade very well. They produced a much better value than Oladipo and Payton. On the rookie scale, having a VTC of $5 million is when you are getting to the elite levels. So Nikola Vucevic is adding value to the Magic in a major way.

The question though is whether they are going to get that same value when his salary takes a bump up.

So let’s take last year’s numbers and put them up against this year’s salary.

Do not be too worried with the negative numbers on the VTC. That gets more normal when salary begins to increase.

Upper Middle Class contracts are typically bad values. As Nygaard relates:

"In many ways, contracts that fall under the upper-middle class are the least beneficial contracts a team has at its disposal. Rookie deals and max contracts artificially suppress player salaries. Minimum deals and lower-middle class contracts enable teams to climb above the salary cap to sign new free agents. Upper-middle class contracts? They offer no additional benefits. Upper-middle class contracts can be classified into one of two groups. The first group is comprised of players who are on their second contract in the league. These are players who did not impress their team enough to warrant a rookie-scale max extension but did at least earn a raise over their rookie deal. This group includes guys like Steph Curry, DeAndre Jordan and Al Horford, along with lower-end guys like Gerald Henderson and Greivis Vasquez. Needless to say, players in this group can carry immense upside. However, to that same point, if those players’ agents thought they could make a plausible case for a max contract, they wouldn’t be in this group. So, there’s some risk involved as well."

Vucevic squarely falls into this category with his deal. It is largely considered a good deal though because many people believed Vucevic could get a max deal. Max deals off a rookie contract often have better value at the end of the day too. So the Magic might be getting great value in both these players.

For Vucevic specifically, placing his VTC on the max player scale shows he is right in the middle. He provides a better VTC than Kevin Love did last year, as you can see in the chart below.

On this scale, then, it seems Vucevic is an extreme bargain. You just have to recognize he could have gotten max value on the open market to get there. Otherwise, as an upper middle class player, it is hard to get much of any value.

The Magic treat Vucevic as a max player and key player on their team. So it would make sense to value and compare him to these group of players. In this sense, the Magic will get excellent value for him.

So what about Tobias Harris?

Harris is essentially getting paid the max salary. He turned down a max salary to stay in the Magic. So let’s judge him at that level (he will not mind, especially considering the discussion on upper middle class players).

Harris here grades out much worse. His comparables on a max deal are Brook Lopez and Eric Gordon (we can ignore Kevin Durant since he did not play much last year).

By this metric, Harris does not grade well and has to produce more value it would seem to make his contract match.

It seems with Harris and his new deal, there are some points that suggest he is more than worth the contract considering his age and production. And then there are others like this one that are not sold on Harris.

Harris will have to prove his worth all over again.

Next: The Mid-Level Guys

The Mid-level Guys

The Magic have three key mid-level guys to review. Two of them are lower middle class players and so we can more accurately assess their value:

As noted in the discussion above, upper middle class players rarely give value back. Like teams stuck in the perpetual bottom of the playoff/end of the Lottery, guys with this kind of salary are kind of just there. So let’s leave Frye alone for the moment. Fans rag on him enough and this just adds ammunition (the salary Rob Hennigan paid him kind of set him up for some failure and his production did not help).

So the lower middle class players. The Magic have Watson and Smith coming off seasons on the opposite end of the spectrum.

Using market value then, C.J. Watson was on the upper end of the spectrum. And he was truly coming off a career year based on VORP last year at 1.3. He was really really good. Expecting him to match that production this year seems a bit unrealistic. And he will be playing on a higher salary, decreasing his potential value.

Watson earned the deal he got though. If he can get close to matching what he did for Indiana, then Orlando will have gotten its money’s worth.

Jason Smith really struggled for the Knicks last year and falls on the opposite end of this spectrum. It is hard to say at this point just how much the Magic are expecting from him and what he can actually provide. It is not likely he is going to add much value.

Next: Final Observations

Final Observations

So what does this tell us about value on the Magic’s roster?

The first thing we can say for sure is that Victor Oladipo and Elfrid Payton outplayed their rookie contracts last year. And that is a very good sign. Orlando is getting good value from two of its key players while they are on cheap contracts. That should seemingly make it easier to invest in others and then eventually in them.

The other rookie players are solid but have not quite cashed in. Where the Magic seem to struggle is in the “other” players outside their core. They are not getting great value for them compared to other rookie deals. Those are rookie deals.

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Things get a little more complex when looking at the Magic’s two big-money players.

If thinking about Nikola Vucevic as an upper middle class player, he like all upper middle class players often provide little value. And unlike a guy like Al Horford or Paul Millsap, Vucevic has a negative contract to value ratio.

But when looking at Vucevic as a max player, he proves to be right in the middle of the pack and, because he is not paid as a max player, he becomes a value.

As it always seems to be, Tobias Harris is a much more complicated story. His production last year in terms of value over replacement player did not project him well. And now comparing him to other max players puts him in company the Magic likely do not want to see him in.

Harris has to find a way to prove himself all over again and increase his value statistically. Winning helps.

On the other side with middle class players, the Magic appear to be getting C.J. Watson after one of his best years. They are paying him for one of his best career seasons. And Jason Smith is coming in off of a bad year. Playing for the Knicks will do that.

When it comes to value using this metric, the Magic appear to have done a good job drafting their rookies and establishing their core. With the big salaries, things seem a bit more hit and miss.

Orlando will have to wait and see how these players perform this year.

Next: Right now, everyone is a leader for the Orlando Magic