When free agency opens at the stroke of midnight, the NBA will leap into its great unknown: an unprecedented three-year spending frenzy that will change the league forever and stand out in history as an outlier blip in which the NBA lost its mind.
The storm isn’t on the horizon anymore. It’s here. The salary cap is at $67 million for next season, but it will soar to a projected $90 million in 2016-17, when the league’s gargantuan national TV deal kicks in. That is the largest one-year jump in history, but it’s only the start; the cap will rocket up again in 2017-18, to a projected $108 million, before finally settling around that range.
The league’s intricate salary system isn’t equipped for a cash flood like this. It is a sandcastle sitting in the path of a tidal wave, which is why Adam Silver pitched tweaks that would have deflated the cap spike. Nobody knows how players, agents, and teams will operate now that the old incentive system is borderline obsolete.
The real bonanza will come next summer, when 25 or so teams could have enough room for at least one max-level contract. But the scheming starts now, during this one-year waiting period before the cap boom. What if the calm before the storm is really just a less severe storm?
Let’s look at the eight biggest questions for the next two weeks of NBA deal-making:
1. Will LMA (or Anyone) Go With a Short-Term Deal?
The basic rule of NBA free agency has always been this: Home teams get an edge in keeping their own stars, since they can dangle more years and more money. This is why everyone is repeating that Portland can offer LaMarcus Aldridge almost $30 million more than any suitor. That’s technically true! The Blazers can offer Aldridge a five-year max deal totaling about $108 million, while rival offers top out at four years and $80 million.
That advantage means much less with the coming cap boom, which opens up options that used to be too risky for players or teams. Aldridge could sign a two-year max deal with another team, then hit free agency again, sign another two-year max deal, and make more money in just the next four years — about $111 million — than Portland can offer in that traditional five-year max contract. Over the full five years, Aldridge could earn about $35 million more double-dipping in free agency than by signing the longest possible contract with the Blazers this summer. THIRTY-FIVE MILLION. Only a fool would ignore that.
Aldridge is a max player, and maximum contracts are set at a specific percentage of the cap in the year those contracts start. Thirty percent of $67 million is nice, but 30 percent of $90 million — next year’s cap — is nicer.
Wait, there’s more! That max percentage increases from 30 percent to 35 percent once a player logs 10 years in the league. Next year will be Aldridge’s 10th season, and that gap of five percentage points will represent something like $4 million or $5 million per year1 — or as much as $20 million over the life of a contract. Aldridge has a double incentive to hit free agency again as soon as possible. Those little quirks rewarding veteran players were never supposed to mean this much.
The specifics depend on when exactly Aldridge would dip back into free agency in this theoretical scenario.
We’re a year early, but it’s possible no player in league history will have ever had as much incentive to sign a one-year deal as Kevin Durant next summer. Durant is three years younger than Aldridge, and as he hits free agency, he’ll have completed nine seasons — one short of the magic number required to snag that juicy 35 percent max. Durant could sign a one-year deal, re-enter free agency when the cap leaps to $108 million in the summer of 2017, and ink a mega-max at that 35 percent level. Durant would rake in about $40 million more going that route than by signing a long-term contract deal next summer.
Short-term deals carry risk, of course, and Durant has undergone three separate foot surgeries in the last eight months. Aldridge has been mostly healthy, but he’s also approaching 30; is it a lock that he’ll still be a max-level guy at age 32? Marc Gasol is already 30, one reason he’s likely to sign the five-year deal that Memphis will plop in front of him at the first possible minute. Kevin Love missed big chunks of multiple seasons in Minnesota, and a fluky shoulder yank ruined his first postseason for Cleveland. Paul Millsap just keeps getting better, but he’s never been a max guy, he’s 30, and losing half a step can be fatal for an undersized big. Kawhi Leonard suffered some bizarre injuries last season, and he hasn’t signed his first NBA mega-deal; sources close to Leonard and the Spurs have been saying for months they expect Leonard to sign a five-year deal with San Antonio.
It’s easy to look at spreadsheets and conclude a star player should cycle between short-term deals, just as LeBron is doing in Cleveland. But LeBron is a cyborg, injuries are real, and it’s hard for guys in the middle of (relatively) short careers to turn down a guaranteed $90 million when all they have to do is pick up a freaking pen. Would you have the balls to do that?
Some players will. It depends on their health record, their personal preferences, and their appetite for risk. Greg Monroe already placed one huge bet in playing for the one-year qualifying offer last season in Detroit, and he told reporters over the weekend he’s primed to gamble again on a two-year deal.
A three-year deal with a player option in the final season could provide Aldridge with the right mix of security and flexibility, and if he wants a bit more comfort, he can push that structure out with four- or five-year deals that end in player options. Agents and team executives expect risk-averse players to lock in long deals this summer, with the wink-wink understanding that if they grow unhappy on their current teams, they can agitate for trades later.
Aldridge is an especially interesting case who could tilt the balance of power in the Western Conference. Executives have been whispering for months that San Antonio is his preferred destination, and the Spurs could clear room by re-signing Tim Duncan and Manu Ginobili on the cheap; trading Tiago Splitter; and letting Danny Green walk.2
They’d have to let Green walk, because every outgoing free agent carries a charge on his team’s books — a “cap hold” — linked to his prior salary. If a team wants a free agent’s Bird rights, and the right to re-sign that player while over the cap, they have to keep that charge on the books. To fit Aldridge, the Spurs would have to renounce their Bird rights on Green, clear that cap hold, and lose the right to re-sign him once at the cap.
If the Spurs add Patty Mills to the trade pot or convince Duncan to take a bigger haircut, they could squeeze out enough space to keep Green and sign Aldridge. But it’s very tight, and requires lots of juggling.
It appears unlikely, but the Spurs could in theory cobble together enough salary to acquire Aldridge with a sign-and-trade — a scenario that would allow Portland to recoup something, and keep San Antonio over the cap so that they can re-sign Green and other outgoing free agents.3
The remnants of base-year compensation complicate this, but I have a headache.
That would take the Spurs over the tax, usually a no-no, but teams that have dodged the tax over the last few seasons might bite the bullet next year. With the tax line rising so high after 2016, a team that tiptoes into the tax next season wouldn’t necessarily be in danger of staying there — or facing the supertax for repeat payers. This may also apply to the Bulls, who will have a hard time ducking the tax if they bring back both Jimmy Butler and Mike Dunleavy Jr. Again: Scrap the old rules. They don’t apply for the next three years.
A fast-evolving marketplace gives smart teams a chance to get creative in luring star free agents they might not be able to sign otherwise. Want a one-year deal? Sure! One year with a player option for Year 2? Here you go! What’s the opportunity cost of Boston, Toronto, Milwaukee, or some other mid-rung team playing Twister for Aldridge or DeAndre Jordan? If they say no, you move on to the next target. If they say yes, hate it, and leave after one year, you’ve still got a ton of cap room, and you probably haven’t blown your shot at anyone else as good as those guys. The upside of getting them into your system and wooing them from within4 outweighs the risk. Hell, long-term max deals for 30-and-over players typically end badly, so a shorter version for Aldridge may be a win-win.
And by the way: The Spurs with Aldridge would be terrifying, even if they give up some of their depth to get him. A Lakers team with Aldridge would be something, umm, less than terrifying, but it would also put the league’s scariest free-agency competitor back in pole position for another star next summer.
In the bigger picture, stars have rarely bolted in free agency. The Heatles and Dwight Howard were exceptions within a system designed to help teams keep their own players. Executives across the league are curious to see how many big-name guys buck precedent and change teams while that system wobbles. If enough stars in this summer’s class pick new teams, it could embolden those who come next.
2. Who Has the Guts to Take the Qualifying Offer?
Unfortunately for rabid suitors, the youngest free agents are the hardest ones to get. Teams aren’t allowed to offer restricted free agents like Butler one-year contracts, and since Chicago on Monday hit Butler with a fully guaranteed five-year qualifying offer, any rival deal has to run for at least three guaranteed seasons. If Chicago plays its cards right, Butler will be a Bull for at least the next three years.
Butler is the only one with the power to torpedo that plan by signing a one-year qualifying offer, and entering free agency unrestricted next summer — the same path Monroe took in Detroit. The catch: Butler would earn just $4.4 million next season playing under the qualifying offer, nearly $11.5 million less than the $15.8 million he’d make in the first year of a long-term max deal from the Bulls.
But the cap boom chips away at that risk by ballooning the reward at the other end. A max deal for Butler signed a year from now, with the cap at $90 million, would start at around $21 million — a massive jump. Butler could play out one season with the Bulls, sign a four-year deal next summer with another team, and make about $4 million more over that five-year period than he would re-signing with Chicago for the long haul now. That kind of upside just didn’t exist in a normal cap environment. Butler turned down an extension from Chicago last fall; is he ready to bet even bigger now?
There’s an easy compromise here: Butler signs a three-year deal with another team, perhaps including a player option for a fourth season, and Chicago either matches it or signs Butler to essentially the same deal. That tethers Butler to the Bulls for most of his prime, and gives him the chance to re-enter free agency after his seventh season — the exact moment at which his max contract jumps from 25 percent of the cap to 30 percent.
Butler is not a top-10 pick who has already banked $10 million. He was the 30th pick, and at some point, he needs to secure a pile of cash.
3. Wait, What About That Other Thing That Shall Not Be Named?
Hanging over all of this is the possibility of a lockout after the 2016-17 season. Anybody who claims to know what will happen is lying to you. I’ve had power agents tell me they are preparing for a canceled 2017-18 season, which would turn three-year deals signed this summer into two-year contracts. I’ve had agents and team executives tell me they are optimistic that any work stoppage will be brief and cost no games.
Ambiguity is scary. Players who lock in deals through 2018 and beyond forfeit some flexibility, but they also hedge against a draconian new collective bargaining deal. But even this cuts in multiple directions.
Consider: If there is a work stoppage, people on both sides agree that maximum player salaries could emerge as a hot-button issue. Star players may push to eliminate the max salary, and Michele Roberts, the union chief, has already ripped the concept of an individual salary limit. Imagine being a star tied to an old max-level contract, only to see your peers suddenly earning two-thirds of the cap after the lockout. On the flip side, scrapping the max would mean less money for rank-and-file players, meaning such guys might benefit from locking in money now.
Again: No one knows what is going to happen on the labor front. A couple of agents have even expressed concern the league might push for a lower max salary, since fans might be aghast at just about every star earning more per year than Michael Jordan ever did. I’ve not heard that concern from anyone on the league or team side — they seem fine with the current percentage system — but it’s out there, and it’s a scary lurking variable.
4. How Badly Do Teams With Money Want to Spend It?
There might be only around 10 teams who end up with max-level cap room this summer.5 Damn near everyone will have that sort of space a year from now, and some teams will have enough for two max contracts — plus a third mid-sized deal. Cap room today is worth more than cap room tomorrow, especially for non-destination teams who can’t compete with the glamour boys on the open market
Depending on those pesky cap holds for incumbent free agents.
A bunch of those teams — Utah, Orlando, Milwaukee, Detroit, Phoenix, and others — have cap room this summer, and they should be hell-bent on using it. I don’t really even care who they sign, provided it’s not an obviously below-average player on the downswing. Pick a young or mid-career free agent and fucking splurge. Almost any deal with a solid player at $15 million or below this summer will look fine once the cap cracks $100 million. Have a jones for Khris Middleton? MAX HIM OUT. Hesitant to snap up Monroe in free agency because you already have one decent low-post guy? SIGN HIM ANYWAY. Does $12 million for DeMarre Carroll or Danny Green seem insane? They’re in their primes, and they do very important NBA things well. GO GET THEM. Barring disaster, all these guys will be on tradable contracts if the fit isn’t ideal on your team.
I’ve heard all the counterarguments from cautious sorts around the league: “Spending for the sake of spending gets you in trouble.” Or: “We want to stay flexible for the summer of 2016, too!” I don’t buy any of them. Most of these teams will have room a year from now even if they spend this summer; if they can get a good player now, while the competition is thinner, they should — even if they have to jump the market by a million or two.
Don’t be shy, Magic and Bucks. Use the $15 million in cap room you have while Middleton and Tobias Harris, respectively, hang in free agency, and then spend heavy to bring those young dudes back.
Another bonus of spending at this level: Players below the All-Star level should be more keen on inking long-term deals, since it’s no guarantee their salaries will escalate along with the cap. Middleton might be a max player this summer, but that doesn’t mean he’ll be a max player in two years. Green might be a $12 million player under any cap level, and if he knows that, you might be able to get him for four years.
5. Did the Finals Cost Centers Money?
Teams understand how hard it is to replicate the small-ball formula that won Golden State the last three games of the Finals. They will always love size, and they’ll back up dump trucks of cash for the army of hulking centers on the market: the Lopez twins, Jordan, Tyson Chandler, Gasol, Omer Asik, Kosta Koufos, Brandan Wright,6 and others.
OK, so he’s not so hulking.
But watch Asik. There are rumblings in front office and coaching circles that teams will be a touch more daring next season going small against so-so pick-and-roll finishers and bigs who struggle to score on the block. In the end, Timofey Mozgov and Tristan Thompson could really only punish Golden State’s small-ball groups with offensive rebounds; when someone passed them the ball, they couldn’t do any damage. And on defense, Mozgov simply wasn’t fast enough to keep up with Golden State’s skittering.
Just catching the ball on the pick-and-roll can be an issue for Asik. He has no post game or midrange jumper. The market for him might be cooler than it was a month ago. Asik is an elite offensive rebounder, but we may be learning that small-ball teams can gang up on one such player — that it really takes two board-crashers for the equation to tilt back in favor of big ball. The Pistons will be a good test of this if Monroe walks and Andre Drummond has to work as a one-man wrecking crew against teams who might risk some small ball against him.
Perhaps it takes only a little offensive punch for a center to maintain his traditional value; Robin Lopez has a flippy hook and a usable midrange jumper, and Portland is bracing for rival bids north of $12 million per season, according to sources around the league.
Even teams with no direct interest will be watching the market for centers.
6. What Do the In-Between Teams Do?
The post-lockout regime of shorter contracts means that every team has a bunch of outgoing free agents — and with that, the chance to either operate under the cap or stay over it and re-sign their own players. These teams can hang in limbo, chasing stars with the fallback option of bringing back their own players.
A bunch of teams will start free agency in that in-between space: Dallas, Portland, Toronto, Atlanta, San Antonio, and (kind of) Phoenix.7 Having the flexibility to pivot is nice, but it also introduces a bit of unpredictability into the market. While these limbo teams wine and dine superstars, rivals with cap space can sneak in and pursue second-tier free agents. Flirting with Aldridge is a smart way for the Drakes to propel the notion that superstars might consider going True North, but in the meantime, Amir Johnson will be hanging out there. Timing is critical in free agency.
Phoenix should have cap room regardless, but Brandan Wright’s cap hold — nearly $10 million — eats up most of it.
Smart teams can hunt bargains early, or if they read the market intel right, wait to scoop up unclaimed leftovers in mid-July. Nailing those fringe signings requires some luck, but if you know who you want, you might be able to find a nice deal early.
The nexus of free agency is really in Portland, Dallas, and San Antonio; all of those teams will be able act with more clarity once Aldridge and Jordan make their choices.
7. What Do the Knicks and Lakers Do If They Strike Out on Stars?
This is the flip side of the Orlando/Detroit/Milwaukee dilemma: The Knicks and Lakers know they can get a meeting with any star free agent, even amid next summer’s orgy, and it might be wise for them to maintain every ounce of flexibility if they don’t nab a star this summer. In the meantime, they’d stink again, snag another nice draft pick (this might apply only to the Lakers, and perhaps not even them), and have enough space a year from now to let superstar free agents bring along anyone they want. This is basically what the Lakers did last summer; when the superstars passed, they signed a bunch of blah players to one-year deals, suffered through an unwatchable season, and prepped to pitch this year’s class of big names.
Neither team seems likely to show that kind of patience this summer, and that’s fine. They should both have plenty of room a year from now in the new NBA, especially since Kobe Bryant’s horrific extension comes off the books in L.A., and most contracts this summer will age well. Going hard at Arron Afflalo and Greg Monroe probably isn’t the best use of resources for the Knicks, since Carmelo Anthony needs to play at least some power forward and Monroe can’t anchor the defense at center, but it’s not a crippling long-term thing. Not everyone can be the Sixers, and the Knicks don’t even have their first-round pick in the next draft, anyway.
8. Does the Mid-Level Get You Anything?
The mid-level exception is only for teams over the cap; it allows them to sign someone for an annual salary up to $5.5 million. It has been a crucial roster-building tool for a decade-plus, and it will basically cease to exist after this summer, since almost no one will be over the cap.
I’m not 100 percent sure what that means for the market. Perhaps no player will even accept a multiyear deal at the mid-level, since it would take them out of next summer’s derby. Teams may push harder for multiyear mid-level deals, since they won’t have a chance to use that tool again for a couple of seasons. They might even reach for someone who can’t sniff mid-level cash from anyone else, and coax him into a three-year deal at what could turn into a great price. If you think Kyle O’Quinn has some unrealized upside, and no one is offering him more than $3 million per season, why not see if you can get him on a three-year, $12 million with the mid-level?
It’s a small unknown in a summer that is one giant unknown. Even if the player movement isn’t as fast and furious as we might hope, the dynamics behind this summer’s free agency are going to be fascinating. Buckle up.
This piece has been updated with additional information since it was originally published.