An Inconvenient Truth: The Bulls Have To Pay Ben Gordon…A Lot

March 10th, 2009 by Andrew Wamboldt

Update: March 16th, 2009 - 7:30 PM

It turns out that NBA players have to pay the state income tax for each place that they play. Therefore, only 41 of the games that Gordon would play if he signed in Miami, would be free of a state income tax. It still allows Miami to make a somewhat competitive offer, but not quite as competitive as the numbers in this article. After the draft, as we draw closer to free agency, the numbers will be updated in a new article.

This is an inconvenient truth that the Chicago media has yet to quite comprehend. The Bulls are going to have to make Ben Gordon a legitimately high contract offer if they wish to retain him. K.C. Johnson recently threw out a number of $8 million a year for how much the Bulls should pay Gordon. Newsflash, this isn’t going to get it done, and in this article, I will show you why.

First, let’s work within the confines of the MLE. Here, we’ll examine that potential Bulls offer against potential MLE offers that the Miami Heat, Cleveland Cavaliers, Los Angeles Lakers, and New York Knicks can make.

First let’s look at what the Bulls offer actually comes out to be. An offer from the Bulls to Gordon of $8 million a year, amounts to a $48 million over 6 years. Gordon would end up netting $29.76 million from this deal. The first five years of this deal (for comparisons sake, as the other teams will only be able to offer 5 year MLE deals) is worth $38.337 million, of which Gordon would net $23.77 million. The first year of this deal would be worth $6.337 in the first year. Gordon would net $3.93 in the first year of that deal.

In their memo, the NBA estimated the 2008-2009 salary cap to be set the estimated salary cap at $57.3 million. This makes the possible first year of an MLE contract to be worth $5.73 million. The max another team could sign Gordon to for the MLE would be $33.234 million over five years.

Let’s start with Miami, who attempted to trade for Gordon this past summer, but the Bulls declined. The Heat could offer Gordon a five year contract that would net him $21.60 million. That is only $2.17 million less than the proposed Bulls offer.

The Cleveland Cavaliers are one of the best teams in the NBA. They are committed to winning, and would definitely spend money on a talent like Gordon for the MLE to try to win a championship. (Any team in the NBA would probably take Gordon for the MLE). The Cavaliers can make Gordon a five year offer that will net him $19.11 million. That is $4.66 million less than the Bulls would be giving him. Something tells me that Gordon could make up that difference in extra Nike endorsements from playing with Lebron James, and being on a legitimate championship contedner.

The Los Angeles Lakers are in the same boat as the Cavaliers. They’re a championship contender, and any extra piece of fire power that could help them get over the top would help immensely. The most the Lakers could offer Gordon is a deal that nets him $18.51 million. That is $5.26 million less than the Bulls offer. Again, playing on a championship contender could help Gordon get extra endorsements to close that gap.

The last team to look at from this group is the New York Knicks. The Knicks attempted to trade for Gordon this summer, using Stephon Marbury’s expiring contract, but couldn’t get the Bulls to bite. Donnie Walsh also showed interest in Gordon during the 2004 NBA Draft, with rumors that he offered Jermaine O’neal to the Bulls in exchange for Gordon. The Knicks could sign Gordon to the MLE, and then use him as a piece to attract 2010 free agents. Gordon lobbied for the Bulls to make the Knicks current coach, Mike D’Antoni, the Bulls’ head coach this past summer. The Knicks could make an offer that would net Gordon $19.04 million, which is $4.73 million less than the proposed Bulls offer. Gordon could help make up that money in endorsements, by getting a larger profile in New York, and potentially blossoming into a superstar on the offensive side of the ball in D’Antoni’s offense.

Another scenario that could play out is that these teams offer Gordon a three year deal. if Gordon plays three years on one of these teams, the team would secure his bird rights, at which point, they could give Gordon a pay raise. The Knicks, because of their large revenue and their willingness to spend money seems like the best destination for this scenario to fold out in. Gordon makes the Knicks into a playoff team next year on the MLE, helps attract some big name free agents, and then when his three years are up, the Knicks would reward Gordon with a big contract of his own.

If Gordon is looking for a longterm contract, I would think the Heat’s offer would have to be the best. The lack of a state income tax is what allows the Heat’s offer to be so competitive with the Bulls. I think the Heat would have the best chance of becoming a championship team while giving Gordon a competitive salary. They already have Dwyane Wade and Michael Beasley, and under this scenario would be adding Gordon. The Heat would still have money to sign one of the big name free agents in 2010. That would be a scary team. The $2.17 million (or $434,000 a year) difference between the Bulls and Heat’s contracts should be easy for Gordon to make up the difference from new endorsements from being on a winner. If Gordon could go to Miami and start, and be part of a great team, why would he stay in Chicago for about the same money? He would be crazy to.

What the Bulls can do however, is make a quality contract offer to Gordon. They don’t have to offer him the sky and the moon to keep him. They just have to make him a respectable offer. If they offer him $9 million a year ($54 million over 6 years, what the Bulls offered Gordon this past summer), the first five year gap between the Bulls and Heat’s potential offers increases to $5.14 million. Increase Gordon’s offer to $10 million a year ($60 million over 6 years, the equivalent to what the Bulls offered Gordon when he was up for extension) the gap increases to $8.11 million. Increase it to $11 million a year ($66 million over 6 years, what Monta Ellis got), then the gap increases to $11.08 million. Increase it to $12 million a year ($72 million over 6 years, basically what Luol Deng got) then the gap increases to $14.05 million.

I don’t think any rational person is saying pay Gordon all the money you can throw at him under the CBA, or even the money Luol Deng got. I think most just want the Bulls to pay whatever it takes to bring Gordon back, no more, no less. If the Bulls just offer Gordon $8 million a year, as K.C. Johnson mentioned, that’s probably not going to get it done. But if the Bulls say offer Gordon $10 million a year, that gap between the Bulls’ offer and the Heat’s offer increases to a respectable amount, such that Gordon might actually take the Bulls offer.

Here is the reality of the situation. The Bulls are not going to get Ben Gordon at some huge discount price. Some other team might get Gordon at a discount price on the MLE, but the Bulls are not going to be the team to get the discount. Why would Gordon re-sign in Chicago, when he could go to a championship contender, and make roughly the same amount after he gets a bit of an increase in his endorsement money? If the Bulls want to keep Ben Gordon, they are going to have to pay him fair value. Personally, I think a $10 million a year deal would be a good starting place, as that’s a fair contract offer to Gordon that gives us a good chance of retaining him. I can only hope the Bulls front office also realized te reality of the situation, and that they don’t try to get him to sign a low contract around $8 million a year as K.C. Johnson proposed, because that just isn’t going to happen.