In summer of big free agent spending, Cavs guard J.R. Smith takes a loss

In a time of unparalleled spending, J.R. Smith managed to become the only NBA player who took a loss in free agency.

Leave it to J.R. Smith, that shining example of good judgment, to be the one player on this summer’s free-agent market who failed to cash in. Smith declined a $6.4 million player option with the Cavaliers on the presumption that a better, multi-year deal could be found. It wasn’t.

Not even a successful season in Cleveland could reform Smith’s image to the point of making him a coveted player around the league. Smith’s reputation precedes him. There have been enough cautionary tales from those coaches and executives who chose to trust him for many others—including those with cap room and exceptions to spare this summer—to keep cautious.

Smith, then, had no real leverage in negotiating with a Cleveland team keen on controlling salary where it can. The Cavs agreed to the full five-year max with Kevin Love and a four-year, $40 million deal with Iman Shumpert but have otherwise looked to control costs where possible. Mo Williams was signed for just $2.1 million, the value of the bi-annual exception. Matthew Dellavedova returned for the $1.2 million qualifying offer after waiting out the market and finding no better situation. Tristan Thompson, whom LeBron James is very much insistent that the Cavs keep, hasn’t yet been able to use the threat of becoming an unrestricted free agent next summer to get an offer to his liking. 

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Cleveland is of such quality as a contender that it makes sense to spend for the best roster possible. The distinction is that it would be painful to spend recklessly; should the Cavs agree to a lucrative, long-term deal for Thompson on top of re-signing Smith, they would add more than $30 million in luxury tax payments alone relative to his accepting the qualifying offer. The team’s total salary could conceivably top $110 million. Not only does every dollar count—it counts double and triple and more as the Cavs wade into brackets with more punitive tax rates.

All of which makes the roughly $1.4 million difference between Smith’s declined player option and newly agreed 2015–16 salary a rather big deal. Cleveland was effectively left to negotiate against itself, rewarded for taking a chance on a player most of the league had given up on.

It was Smith and his representatives who elected to turn down that money in the first place, sensing the league-wide spending spree about to come. That money flowed as freely as expected. Smith merely wasn’t a beneficiary, as the sum value of his deal ultimately mirrored those given to New York’s Derrick Williams and Boston’s Jonas Jerebko. 

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The only thing Smith has working to his advantage is the security of knowing he’ll be a Cavalier through season’s end if he prefers it. Because Smith signed what is technically a one-year contract (the second year of his new contract will be a player option) and would have Bird rights at the end of the season, he must consent to any trade that would include him. That Cleveland re-signed Smith (his total cost after luxury tax will go well into eight figures) indicates some level of commitment. Smith’s ability to veto any trade he would be involved in seals his future for the year, all but ensuring that he’ll be a part of a Cavs run for as long as he’d like.

That might not be worth $1.4 million, though Smith could have the ability to recoup his losses by playing free agency more carefully next summer. A player option will again give Smith a choice: Accept a 2016–17 salary of right around $5 million or jump into the player pool just as the salary cap takes a historic leap. There will be more money next summer than teams know what to do with.

That could be the perfect dynamic for Smith, who will be no team’s first choice, to find a bigger offer. It was clearly worthwhile to the Cavs to bring Smith back for next season at considerable cost. Will the same be true a year from now when Cleveland will be in line to pay the repeater tax and could add even more salary (whether by re-signing Thompson, using the Brendan Haywood trade exception, or through some other means) in the interim?