If the NBA owners are losing money, they sure have an odd way of showing it. In all the excitement over a new season, the league’s executives collectively lost their minds, awarding grossly inflated contract extensions to marginal players. As a result, they’ve severely worsened their own hand in the labor negotiations due next summer.

Before delving too deep into the details, let’s go over how the extensions market works. Under the NBA’s collective bargaining agreement, teams can negotiate extensions with players in the off-season before their contract expires. That means that for players who are becoming free agents in 2005, the time to extend their contracts was before this season.

While a few veterans may negotiate extensions, the players who sign these deals are usually entering their fourth year in the league. The team has picked up the option for a fourth year on their rookie contract, and if no deal can be reached, the players become restricted free agents after the season, with the team holding the right to match any offers.

In other words, the teams have all the leverage. But you’d have never guessed this from the deals that were signed this past summer.

Leading the way is basketball’s answer to the Keystone Kops, the Golden State Warriors. Fans in the Bay Area had hoped the appointment of Warrior legend Chris Mullin as the new general manager would bring an end to a decade of idiotic personnel moves. Guess again.

Having already awarded two disastrous contracts in the free agent market (a combined $77 million for the marginal talents of Adonal Foyle and Derek Fisher), Mullin set his sights on giving contract extensions to fourth-year players Jason Richardson and Troy Murphy.

Both are decent players who could start for almost anybody, but neither is a star and it would be a surprise if either ever played in an All-Star game. Last year, Richardson’s Player Efficiency Rating (PER is my measure of a player’s overall statistical performance) of 16.74 ranked 11th among shooting guards; Murphy ranked 13th among power forwards at 16.75. Plus, neither is a good defensive player.

Mullin evidently thought differently. He rewarded Richardson with a 6-year, $70 million extension and then handed Murphy $60 million over the same time frame. Compare that with the 7-year, $62 million deal the Knicks gave Jamal Crawford, who is similar to Richardson in both age (24) and performance (PER 15.82), and was widely viewed as being overpaid. Folks thought the Suns were crazy for giving Steve Nash $66 million this summer, but at least Nash is a proven All-Star.

The only benefit to signing these players to an extension was to lock in their contracts at a lower salary than they might otherwise get on the free market next year. But it’s safe to say that Murphy and Richardson weren’t going to pull in a combined $130 million next summer unless they vastly exceeded expectations.

The Warriors could have kept Murphy and Richardson this season and matched any offers for them this summer – none of which would have approached $70 million. That risk-free course of action would have freed up several million dollars under the cap to use on free agents next summer if they decided not to match an offer. Instead, the Warriors are now locked into two overpriced contracts.

Several other teams replicated Golden State’s insanity. The Grizzlies maxed out Pau Gasol, while the Nets lavished $25 million over four years for Jason Collins. But the runnerup to the Warriors on “Let’s Make a Bad Deal” is Portland.

The Blazers signed Zach Randolph to a six-year, $84 million deal despite his questionable conditioning, indifference to defense, and propensity for ending up in handcuffs. They did so, laughably, because his agent made the emptiest of threats, claiming that Randolph would sign a one-year deal as a restricted free agent and then leave in 2006. In other words, the Blazers caved because of the implausible threat of a player passing up millions on the open market.

Keep in mind that the NBA’s labor agreement is being renegotiated this summer, with teams pushing for shorter maximum contracts and a lower mid-level exception. That means that had they waited, the Blazers and Warriors likely could have negotiated deals on much better terms than the ones they got now.

The dolts in Golden State and Portland have made it harder for the smart NBA front offices to do business. If Jason Richardson is worth $70 million, then you can imagine the Spurs’ Tony Parker being upset to learn that he was worth only $66 million.

Or take Latrell Sprewell, who has been pushing hard to get a contract extension on his $14 million a year contract. The T-wolves aren’t theoretically opposed to this, but when Spree saw the numbers the others got, he immediately started overestimating his own value. As a result, Minnesota couldn’t sign him to a reasonable deal and instead had to listen to his preposterous whining that he “has a family to feed.”

Nonetheless, a couple of teams made out okay. Richard Jefferson, for instance, now seems downright cheap at $70 million, and the Wizards smartly tabbed big man Brendan Haywood for an economical $25 million over five years.

But the end result of the crazy extensions is that next summer’s labor talks will be that much more difficult. The owners are trying to hammer out revisions that increase their bottom line, but with every Adonal Foyle and Jason Richardson, their pleas of poverty become a little more implausible. In 2005, when NBA owners end up with either an extended work stoppage or a worse labor contract than they bargained for, don’t be surprised if a few of them start pointing fingers at Chris Mullin.