This will be short and sweet. We've argued a lot on this forum about what the market value of Garnett and Allen will be next year, what would constitute a "hometown discount" if they stayed, whether they would be valuable to us as a rebuilding team if we resigned them, and so on.
I'm asking this question: How much is a quality rotation player in his mid-thirties worth in NBA free agency?
Here is a first approximation.
I just looked at all free agent signings from 2010 and 2011 on nba.com. I removed everyone under the age of 31 and everyone with a PER in their contract season of under 9. I also removed all of the veteran minimum players who have never held down starting jobs for any extended stretch of their careers. Almost all of these contracts were 1-3 year deals, the primary exception being Dirk Nowitzki's.
Then I plotted the salary that those players won on the open market versus the PER they put up in their contract year. PER is, of course, primarily an offensive stat... though it is interesting to note that Ben Wallace, Kurt Thomas, Tayshaun Prince, and other players noted for their defense didn't seem to earn much of a premium.
This is not particularly scientific. =)
The following formula adequately describes the data: salary (in millions) = 0.004 * PER^2.6, plus or minus about 2 million.
Kevin Garnett and David Robinson
If you were to use only this in evaluating the big 3, you would offer Garnett about $9.4 million per year. The "hometown discount" might get you down to $8 million. The most logical contract if Garnett wants to stay in Boston would be something like 2 years $16 million.
David Robinson's last contract falls right on the red dashed line above. At a similar age and performance level to Garnett today, Robinson was extended by the Spurs in 2001 for 2 years, averaging $10 million per year. It was a different cap climate, but I think this gives you a good idea of how big a hometown discount we're talking about. The Spurs were, of course, very committed to keeping Robinson.
Today, San Antonio is similarly committed to keeping another 36-yo big man with a PER of 21. Duncan's offer from the Spurs will have a big impact on what Garnett expects from us (or someone else).
Ray Allen and Reggie Miller
The formula pegs Ray Allen at about $4.7 million. The "hometown discount" might translate to something like 2 yrs $8 million. For comparison, the 37-yo Reggie Miller averaged $5.5 million per year on his final contract extension with the Pacers. MIller had scored a PER about 1 point higher than Allen is scoring this season.