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Here's why NBA free agents are taking less money for shorter contracts

It may seem odd that NBA players are turning down longer contracts for shorter ones, but there's a reason behind it
Photo by Bob Levey/Getty Images

For those number crunchers sitting at home, it may seem weird to have read the news today, Wednesday, July 16, that former Pacers' forward Lance Stephenson has accepted a three-year, $27 million deal with the Charlotte Hornets. Because, if you're a number cruncher like myself, you would have found out that after accounting for state taxes, Lance's new deal with the Hornets is for less money and time than what the Pacers had offered.

In other words, Lance's claim that he denied the Pacers' deal because he is worth more than what they offered may seem a little odd now that he has taken a deal for, seemingly, less cash.

But if you take a look at the free agency signings this offseason, for example Chandler Parsons' deal, or LeBron James' offer for that matter, you will notice a particular item that is more important to these players than the money.

The time.

The reason players like Stephenson, James, and Parsons are opting for shorter contracts in lieu of (in Stephenson's case) longer ones and more money, has to do with TV.

Yes, television.

The NBA is currently meeting with executives from Time Warner and Disney to work on a new television agreement; as the current agreement is set to expire after the 2015-16 season.

This new agreement, by all accounts, is expected to bring in double the money for the NBA, and players like Lance Stephenson are gambling on this forthcoming monetary windfall trickling down into players' pockets by taking less money now in hopes of a lot more money in the near future.

By all accounts, the NBA's hopes of doubling their television revenue is a done deal. Even if Time Warner or Disney aren't prepared to cough up the cash, Turner Broadcasting is reportedly waiting in the wings to take over for them. Therefore, the NBA has some added clout and safety in their demands for double the cash.

But unless your name is LeBron James, these shorter contracts do come with risks.

For starters, in Stephenson's case, his three-year contract comes with a team option in the final year. What that means for Stephenson, is despite his assuredness that he will be worth a lot more than he is now in three years, he has to worry about proving his current worth in his first two years or the Hornets can drop his contract.

Team option or not, more money available will not necessarily equal more money for certain players.

Like I mentioned earlier, if your name is LeBron James, a short contract is no-brainer. Even two mediocre, by his standard, years won't erase his name recognition, branding power, and overall profitability to prospective suitors.

In other words, something catastrophic would have to happen for James to make less money on his next contract.

But for players like Gordon Hayward, Chandler Parsons, and Lance Stephenson, the short contract is a lot more dicey; as according to most experts, the mid-tier players' deals this free agency season are already well above estimates, in terms of money.

Therefore, the odds are more likely in favor of this class of players underperforming their current value than proving they are worth more than they are already making.

Despite the risks, though, this year's free agency theme seems to be secure yourself for the upcoming economic growth in the NBA, and I would not expect this trend to die down as free agency comes to an end.

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