Market Value Luol Deng

Market Value Luol Deng

Loul Deng declared his eligibility for the draft and was taken with the 7th overall pick in 2004 by the Phoenix Suns.  The Suns then proceeded to trade the 19 year old Deng to the Chicago Bulls for future conditional first-round draft pick, and the rights to Jackson Vroman (31st pick).  Since becoming a Bull, Deng has shown progress each year and in the summer of 2008 the Bulls re-signed Deng to a 6 year $80 million dollar contract. After the signing then general manger John Paxson commented:

“Signing Luol has always been a priority for this organization and we have always felt that he was a big part of our future.  We are very happy that Luol will now be with us long term as we continue to grow as an organization,”

Luol has made the NBA all-star team the last two seasons and has played well for the Bulls during his career and next season will be the final year under his previously mentioned contract which will pay Deng just shy of $14.3 million dollars. As a good all around player Deng is most noted for his shooting and his defense. He usually draws the assignment of guarding the leagues best players most notably Lebron James.

Moving forward the Bulls will have a tough decision to make regarding Luol's future as a Bull. The NBA above all it's glitz and glamour is a business and the team owners want two things, to win and to make money. The pursuit of a championship is a careful weaving on players, coaches and the cost analyst of players and assets like draft choices. These very decisions are before of the Chicago Bulls front office in regards to Luol Deng. There are many angles to the decision of Deng's future that have to be considered before a decision is made.

The first of which is his market value as a player. Commonly, NBA general mangers look at trends and recently signed players to draw an estimate of what a player, moreover, his agent will request as a fair salary for their client. In Deng's case I draw comparisons to former Atlanta Hawk and now Brooklyn Net Joe Johnson. In the summer of 2010 Johnson sign a 6 year $119 million dollar contract. Many members of the media have referred to the contract as ridicules, Johnson signed the deal at the age of 28 and was then subsequently traded to the Brooklyn Nets just 2 seasons later. This avenue could also be one the Bulls travel with Deng. However, some comparisons can be drawn to what Deng's agent may ask for in negotiations for his client. Who also will be 28 when negotiations begin. Below is a comparison chart.

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Johnson's seasons leading into the 2010 free agency are better statistically then Deng's leading into next summer's free agency, it is fair to say however, that Deng is headed for a big payday, the only question for the Bulls is for how much. I have heard many media-types refer to a "hometown" discount for the Bulls, suggesting that Deng would sign a contract for less money to help the team with cap space to make the team more competitive.  This is a foolish thinking and I do not expect Deng to do this. Luol is involved with many charitable works, including his Luol Deng Foundation which helps refugees from his native Sudan. The money he is paid is used for his charitable work outside of basketball and after signing his contract in 2008 Deng commented:

"This brings a lot of responsibilities," he said. "Those are responsibilities I'm looking forward to, on and off the court. I take basketball very seriously and I look forward to putting the team on my shoulders."

If the Bulls front office is hoping for this discount they will be mistaken. They can begin contract negotiations with Deng next season and up until the trade deadline or even as a UFA in the summer of 2014. The value Deng will have with other teams will make it smart business for him to wait until the summer. He will receive offers that the Bulls will be forced to match if they intend to retain his services moving forward.

The new collective bargaining agreement will help the Bulls with Deng's contract; Joe Johnson signed his contract under the old CBA, so it seems that will lower the price somewhat for Deng. As stated in the CBA, however, A free agent's salary in the first year of a new contract is never less than 105% of his salary in the last year of his previous contract. For example, a ten-year veteran free agent (Loul Deng in 2014) who most recently earned $20 million has a maximum salary of at least $21 million, even if that is above the league-wide maximum. A free agent does not need to remain with the same team in order to receive 105% of his previous salary, although the team that signs him is subject to the same salary cap restrictions as with any other free agent.

So in common sense terms, Luol Deng will be coming off a contract paying him the previous season $14.3 million, So according to the CBA the first year of his new contract can be no lower then 105% of that or $15.1 million. Also, the contract will increase in value with a standard raise of around 5% each additional season, with a 4 to 5 year contract. So in his final season (2018-19) under a new contract Luol Deng in theory could be paid near $18 million dollars. Thou, I am confident they may get that number down to $14 million (hometown discount) the first season. So the Bulls will at best be where they were in 2008, and would have to sign Deng to a 5 year deal worth $80 million plus. This all from a team strapped for cash and unwilling to pay the luxury tax.

If the Bulls want to stay competitive and still retain Luol in a new contract, they will need to sign him to a contract which in his first year pays him under $12 million dollars. Furthermore, I feel his true value to them is much lower around $10 million a season. That will be quite a big "hometown" discount. The truth of this debate of whether the Bulls should resign Deng or trade him, is they have no choice but to trade Luol Deng and get value now before he is gobbled up my another team in free agency.

The NBA rumor mill has put out a lot of "stuff" about Deng being rumored in trades. Much of it however is just people connecting dots that do not connect. The rumor of him for a lottery selection in 2012 from Golden State, which was said to be Harrison Barnes all stemmed from a official conversation at the draft combine that year between Bulls GM Gar Forman and Barnes prior to the draft. In actuality, it could have been no more then Forman doing background on Creighton's Doug McDermont a previous high school team mate of Barnes.

The Bulls have always valued loyalty and Deng has been a loyal soldier for them. The organization has historically moved forward slowly when they think they are close to a winner. I would argue that they are not close at all, and even with Rose, Deng and Hinrich in the line-up this year they would have still lost to Miami. It may have happened in six games or even seven, but it would still have happened. The way they should be looking at this situation is, without Deng they faired as good in a playoff series with Miami as they did with him in 2011. In both series 2013 and 2011 the Bulls lost in 5 games. So why spend all that money on an aging Deng ?

So the remaining things to consider, are what is good value for Deng ? Do you want to get veterans with sensible contracts that equal Deng's or do you want the cap flexibility to get the guys you want ? Or can you only get the guys you covet through a trade ? I would suggest they try to accomplish all three, by finding a trade partner or partners that could send them veteran players that have reasonable contracts, cap flexibility and a higher draft selection or selections. According to the experts, this years draft is short on star players and loaded with future bench players. In a draft like this there are often guys that skipped the radars and turn out to be super stars. An example is the 1996 NBA draft and why Kobe Bryant went 13th the Charlotte Hornets. A player like Deng, and All-Star in the league would attract teams that need a star more then another under-developed rookie. Luol's market value is high enough to accomplish this, however, the Bulls first need to see the road ahead and the looming curve in their path to a seventh championship. They need a  complete analyst of this summer's draft prospects and the boldness to use Deng to go make the move that plucks a diamond from this draft.

1996 NBA Draft: http://en.wikipedia.org/wiki/1996_NBA_draft

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