August has barely started, but teams are already bracing for the trickiest contract extension talks in league history. The 2012 draft class, now eligible for early extensions that would kick in after this season, has more leverage than any group of first-round picks since the league instituted rookie-scale salaries.
They have the good fortune of straddling a projected $20 million jump in the salary cap — from $70 million this season, the last year of their rookie deals, to a projected $89.5 million in 2016-17. The league will be swimming in cap space without enough veteran stars to soak it up. If someone doesn’t get the extension he wants before the October 31 deadline, he can enter restricted free agency next summer knowing that at least half of the league’s teams will be waiting with max-level cap room. The true gamblers could do that, sign a one-year deal1 for the 2016-17 season, and enter free agency unrestricted two summers from now — when the cap is expected to soar again, toward $110 million. Players seeking an in-between solution might push for two- or three-year extensions — shorter than the general four-year limit — that get them back into free agency faster.
Called a qualifying offer.
Agents will push teams to price that second cap jump — from about $90 million to $110 million — into any four-year extension struck over the next two months. Both sides knew that Alec Burks wasn’t “worth” $10.3 million per season in 2015 terms when Utah inked him to a four-year extension almost a year ago, but the Jazz understood that if Burks made a leap he could outproduce his salary on the back end.
Per several league sources, agents are striking a tough posture in preliminary talks. That doesn’t mean the next two months will produce stalemates, short-term deals, or near-max contracts for anyone who demands one. These same dynamics hovered over contract talks during the past year, and players, with more choices than ever, still opted mostly for long-term security; the risk of injury always looms, and the threat of another work stoppage in 2017 clouds everything.
But the cap jump isn’t theoretical anymore. It’s here, thanks to a boatload of locked-in TV money that will flood the system after this season. Early extensions struck since the last lockout have generally ended up as team-friendly deals, but players might push even harder this time around — or simply try their luck in free agency.
Adding to the uncertainty: Team higher-ups still don’t have a good feel for what exactly these players are. That’s always true to some degree; these guys are only three years into careers that often start before they turn 20. But the mystery is heightened with this group. Terrence Jones and Donatas Motiejunas2 have cracked 1,000 minutes in just one season each for the Rockets. John Henson has never logged more than 2,000. Want to goad a group of polite Torontonians into yelling at each other? Ask them what in the hell Jonas Valanciunas and Terrence Ross will be in three years.
Motiejunas was drafted in 2011, but because he didn’t come into the league until 2012, he joins that draft class for extension purposes.
A number of other big names, including Michael Kidd-Gilchrist, Bradley Beal, and Jared Sullinger, have missed major chunks of time with injuries. The picture is murky, even before considering the different places from which each team enters these talks — their cap picture, their goals in next summer’s free-agency frenzy, and their place in the league’s hierarchy.
Let’s take an early cruise through Extensionville:
The “Max Me or Talk to Me in a Year” Centers
Jonas Valanciunas: It’s the classic GM rule of thumb: If a player insists on a max-level extension, and you don’t think he’s quite that good, hold your ground and let the guy enter restricted free agency the following summer. What’s the worst that could happen? The guy plays well, another team lavishes him with a max deal, and you match a contract he’s earned.
There are minor risks in waiting. The player could obliterate those matching rights by signing a one-year qualifying offer in restricted free agency, but that’s a massive gamble no player has taken when presented with a max contract. A rival could offer a Chandler Parsons–style two-year deal with a player option in Year 3, meaning that even if you match, you face the dreaded endgame of losing that player in free agency two years earlier than necessary.
But you can mitigate the Parsons risk, too. Chicago did so with Jimmy Butler by preemptively hitting him with a so-called “maximum qualifying offer” — a five-year max deal that, once delivered, requires any other suitor to offer at least three fully guaranteed seasons.
Butler’s extension talks are instructive. In a simplistic sense, the Bulls “lost”; they could have inked Butler for something less than the max, but they wouldn’t budge from a number well below that, and come July, they had to give Butler the max deal they had refused him. Orlando might have saved itself almost $25 million by taking the opposite course with Nikola Vucevic. But you can flip that around and call it good negotiating: Chicago knew the power of restricted free agency, and it figured the gap between the two sides last fall was a price worth paying to see if Butler was really worth a max deal — and whether he stayed healthy.
There’s a point at which the gap between a player’s salary demand and his max salary is so small that a team should just punt on the extension. For a good young center in this market, teams might want to inch very close to that max before giving up. Every bit of savings can help fit future free agents. Agreeing to a dollar figure below the max is a hedge against the cap rising higher than expected. A true max salary is set as a percentage of the salary cap; if the 2016-17 cap comes in above the current $89.5 million projection, any max deal negotiated ahead of time would float up with the cap.3 Extending a player at a number even just $500,000 below the projected max could bring a much bigger payoff.
The Warriors navigated this territory with Klay Thompson’s extension, and it paid off.
Ducking the max, even by a hair, makes it easier to play around with the year-over-year numbers — to keep a deal flat over time, or even negotiate salary decreases. That could come in handy if the cap actually drops in 2018-19, as the league and union currently project.
Valanciunas is a lock to demand a max-level extension. Large humans get paid, and this large human shot 51 percent on post-ups as a 22-year-old banging against the world’s toughest bigs, per Synergy Sports. He’s a beast on the offensive glass, shoots almost 80 percent from the line, and should develop as a pick-and-roll finisher — both at the rim, and with a soft midrange jumper.
He has also been an odd, underused fit in a Drakes offense dominated by gunner guards who prefer clear driving lanes — a problem that could persist, and harm his value, if Dwane Casey is serious about playing smaller. He’s a potent enough post scorer to draw double-teams but laughably bad at passing out of them. Building him into a plus defender, both at the rim and in open space, will be arduous. If the Raptors can’t convince Valanciunas that securing money now is worth bending a bit on annual salary, what’s really in it for them?
An early max extension would also eat into Toronto’s cap flexibility for next summer. Valanciunas would go on the 2016-17 books at a salary around $21 million. If the Raptors wait, Valanciunas would count as only an $11 million “cap hold” when free agency kicks off.4 The Spurs could not have signed LaMarcus Aldridge without first denying Kawhi Leonard a max-level extension precisely to hoard this bit of wiggle room. That $10 million difference might not matter if Toronto re-signs DeMar DeRozan, but it could help the Raps seize an opportunity in free agency.
A cap hold is an artificial charge linked to outgoing free agents. The idea is to make it harder for teams to sign outside free agents, and then re-sign their own using Bird rights.
They could still make room to do that, even with Valanciunas at a big number, by letting both DeRozan and Ross walk. Would the Raptors dare venture as high as four years, $80 million — below the projected four-year, $93 million max — to keep Valanciunas in the fold? That may be too rich for Masai Ujiri’s blood, and if it is, expect Valanciunas to hit the market next summer.
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Andre Drummond: Scene from Stan Van Gundy’s office, sometime in early October …
Van Gundy: “Hey, guys. We adore Andre. He’s our guy. But we’d love to keep a bit more cap room, so it would help us if Andre would take …
Jeff Schwartz (Drummond’s agent): “Wait, wait. The team’s owner already publicly called Andre a ‘maximum player.’ We really going to do this?”
SVG: “Crap. I was hoping nobody saw that.”
Van Gundy knows that free agents aren’t dying to come to Detroit, so he has prioritized taking care of the good players already there. Detroit could tack on an extra fifth season to Drummond’s extension by naming him its one-time-only “designated player,” a move that requires Detroit to offer the full max.
Detroit could balk at that and still re-sign Drummond in free agency next July to a five-year deal at any amount, as the Pistons just did with Reggie Jackson. So why not wait, keep Drummond on the books as a cheaper cap hold, and still ink the full five-year contract? Waiting risks irritating Drummond to the point where he might entertain a three-year offer sheet from another team. The Pistons cannot afford that after botching the Greg Monroe situation. The extra cap room wouldn’t have much value for a team that wasn’t a draw when cap room was unusual, and Detroit could still carve out plenty of flexibility after a max-level Drummond extension by cutting Ersan Ilyasova — whose deal for 2016-17 is only guaranteed for $400,000.
“Sorry, It’s Not About You”
Terrence Jones and Donatas Motiejunas: These might be the two most intriguing players of this whole lot. Jones has barely logged 3,000 minutes over three seasons, but he has the potential to be the most versatile non–Anthony Davis two-way player from this draft class — especially if that languid 3-point stroke morphs into a reliable weapon. Would it be insane for Jones to hold out for at least $15 million per season? Probably not, even though he would likely be the least accomplished player ever to sign an extension that pricey. Would it even be insane for Houston GM Daryl Morey to accept that kind of deal? No one really knows, but Jones’s team will begin extension talks at an eye-popping number.
Motiejunas hasn’t played much more than Jones, but he emerged last season as a legit post-up hub — a pivoting blur of cruel pump fakes and flippy hooks capable of slipping nifty passes around double-teams. He started hitting 3s from outside the corners, improved his defense, and survived at center during Dwight Howard’s absence.
I’d bet slightly against either getting an extension from Houston. Morey will take a killer deal if it falls into his lap, but he knows restricted free agency is a cudgel, and he prizes flexibility. If he gets wind that a star can be had next summer, he needs to be able to act immediately. He could extend one or both of these guys and still do that, provided he gets them on tradable contracts, but the job is easier if they’re on the books as cheap cap holds Morey could make disappear in an instant.
Bradley Beal: The Wizards need about $25.5 million in room to fit Kevin Durant on a max contract, and if they sign Beal to a max-level extension, they would have almost precisely that amount left over. Playing the math that tight is dangerous, and makes it hard to fill a workable roster unless ring-chasers come aboard at massive discounts. The Wiz would be safer following the path San Antonio took with Leonard, only they haven’t built up the cachet that allowed the Spurs to say, essentially, “Trust us. Hold tight as a cheap cap hold, and we’ll make it worth your while.” Washington needs to nurture the good vibes, and that means at least coming to the table.
Beal may want his money now, and his side will surely propose a max-level extension. He hasn’t played up to that level yet, but 22-year-olds with silky strokes and some grit on defense don’t readily accept less. Beal might consider it after dealing with the kind of recurring leg injures that nag at a player’s anxiety. Offer a four-year deal starting around $18 million per season, about $3 million below Beal’s projected max, and he might just take it.
By the way: Imagine if Washington went this route, and after the DeAndre Jordan Memorial Moratorium, the league announced the cap had somehow come in at $86 million — below projections, and perhaps too low for Washington to fit Durant had it already extended Beal. No one thinks that will happen. If anything, people expect the cap to again come in slightly above projections. But this kind of uncertainty can have a chilling effect on extension talks.
One reminder: No player has ever had as much incentive as Durant to re-sign on a one-year deal with his incumbent team. But he could reap most of the same benefits by signing a two-year deal with a non-Thunder team, and he’s also coming off three foot surgeries. Dozens of competing variables are at play in the biggest free-agency case since LeBron in 2010. Buckle up.
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On the Wing: Big Names, Uncertain Value
Harrison Barnes: Golden State has only three players under contract for 2017-18, but two of them — Thompson and Draymond Green — make huge money, and if things go well, Stephen Curry will join them on a max deal starting around $30 million. The Warriors will need to replace Andrew Bogut and Andre Iguodala, and they have ambitions of luring another star free agent to the Bay as those older players fly off the books.
Barnes may fit into that equation as something like an Iguodala successor, only with a better 3-point stroke and the size to spend more time at power forward. But he was the fourth option in Golden State’s starting lineup — and the fifth-best playmaker in that group — and guys who don’t create off the bounce don’t typically get mega-extensions unless they are 7 feet tall.
But Barnes thrived in that low-usage role for a title team that wants to preserve its dreamy chemistry, and he’s in plum position to demand huge money if he hits free agency. DeMarre Carroll just nabbed $14.5 million per season from Toronto, and he’s six years older than Barnes. There’s only about a $6 million difference between Carroll’s deal and Barnes’s Year 1 max, and if there’s any room for back-and-forth in extension talks, it’s within that space. Barnes won’t come any cheaper.
Michael Kidd-Gilchrist: Charlotte has more financial flexibility going forward, and the market for defense-first guys with shaky jumpers can be cooler than expected. Kidd-Gilchrist developed into a serviceable midrange shooter last season, but knocking down 37 percent of wide-open long 2s doesn’t outweigh the harm defenses inflict on Charlotte’s spacing by granting those looks. Kidd-Gilchrist offsets some of the damage with smart cuts, daring offensive rebounds, and breakneck rim runs in transition, but he’s a hard piece to build around. I’m intrigued by the idea of Kidd-Gilchrist seeing more time at power forward, but Charlotte has too many rotation bigs right now for that to be a big rotation feature.
Kidd-Gilchrist will steal your soul on defense, but that alone hasn’t been enough to score max money for a wing player. The two sides might be able to hammer something out before Halloween.
Dion Waiters: Helicopters have halted their search missions over Waiters Island. It is abandoned. One rescue crew found “Bill and Zach Were Here, Fall 2014” scrawled in blood on a rock face. Unless the Thunder wring a killer extension out of a ball-dominant chucker they don’t need, they have no reason to act early.
Terrence Ross: The league’s best candidate for a “we’re not sure you’re good, but here’s $45 million” Burks-style deal — only the new version of a Burks deal might blow past $50 million over four years. Again: This is what it will take to keep some of these guys out of a free-agent market that will be oversaturated with money.
Ross can shoot, but he’ll be 25 this season, and it’s unclear if he’ll ever refine the rest of his game so his shooting can really sing. He spaces out on defense, especially away from the ball, and he doesn’t have enough playmaking in his bag to create something when defenders close out on him. He shows hints — a drive, a floater, and a pass that makes you confirm it was Ross that threw it — but it never sticks over a full game. His playoff performances have been troubling.
The Boston Brigade
Tyler Zeller, Jared Sullinger, Perry Jones III: The Celtics have the flexibility to do almost whatever they’d like with these three. If they land on agreeable salaries, Boston could re-sign all of them without imperiling its cap room — especially since Boston somehow convinced Amir Johnson and Jonas Jerebko to swallow fully nonguaranteed contracts, worth about $17 million combined, for 2016-17. Boston can waive them any time before July 3, per league documents, giving the C’s two days to court big-money free agents who would justify opening up that extra $17 million in room.
Jones has almost no NBA track record and may not even make Boston’s final roster; once Boston waives Zoran Dragic, it’ll have 16 players on its roster — one over the limit it must hit before the season starts. But the Celtics appear intrigued with Jones’s positional shape-shifting, and if he somehow sticks, they might be open to bringing him back on the kind of deal K.J. McDaniels just got from Houston.
Boston could always trade a big to ease the roster crunch, and Sullinger might be the likeliest candidate to go. He’s had constant conditioning issues, he’s still a sub-30-percent shooter from deep after two years of hoisting, and he’s probably never going to be a plus defender. His agent, David Falk, does not mess around in extension talks. If Falk can’t get Sullinger a huge deal, he will have no qualms taking him into free agency.
Zeller was one of last season’s pleasant surprises, scoring efficiently in a variety of ways and providing on-again, off-again rim protection for a Boston defense in desperate need of it. Depending on team context, Zeller looks like either a dynamite third big man or a very nice fourth/fifth starter. Those guys are going to run into the eight figures in the new NBA, and if Boston can snag Zeller long-term for anything under $12 million, it may jump at the chance.
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The Sneaky Extension Crew
John Henson: Our own Marc Stein reported weeks ago that Milwaukee and Henson were close to a deal, but things have gone radio silent since. The two sides are still on course, per several league sources, and Henson will probably get a payday in the eight-figure range that busts past the “sneaky” label. Bigs get paid. Hell, Aron Baynes just got nearly $20 million over three seasons, and every agent repping a moderately talented big man is ready to wave that deal in a GM’s face. Henson found his NBA niche by scrapping post-ups, slicing down the lane for pick-and-roll finishes, and keeping those condor arms spread wide on defense.
Festus Ezeli: Don’t laugh when the Warriors re-sign Ezeli, participant in just 124 regular-season games over three injury-riddled seasons, to something like a four-year, $40 million extension this fall. Ezeli is an explosive leaper who protects the rim on defense, and his stone hands have softened just enough that he can at least catch the ball and dunk it when he’s wide open — and cram down offensive rebounds.
Ezeli doesn’t yet have the feel to be an ideal big-man cog in Steve Kerr’s system — he had just nine assists last season — but if you surround him with shooting, he can work as a screen-setter and finisher. He’s the only realistic heir to Bogut on the Dubs roster, and even if the Warriors someday deem him unfit for that job, he’d be movable at that number.
Evan Fournier: He shouldn’t ever start for a good team, but Fournier is a career 38 percent 3-point shooter with some playmaking guile and the guts to sport ridiculous hairstyles. Use him as a primary ball handler and your offense is toast. Stick him on the wing while someone else does the heavy drive-and-kick lifting, and Fournier can do damage slicing into a scrambled defense. He can play multiple positions on both ends, though he probably tops out as an average defender.
He’s just a useful guy to have around, and useful guys are about to get a ton of money. Orlando should see what it would take to preempt that, even if it starts throwing around numbers near the $7 million-per-year deal Jae Crowder just signed with Boston.
Meyers Leonard: Any 7-foot-1 dude who rips 42 percent from deep is going to draw interest, and Leonard hit that mark last season while jacking nearly five triples per 36 minutes — and upgrading his defense from “completely clueless” to “apparently aware that a game is happening.” Remember: Leonard had barely played serious basketball before entering the NBA. He probably won’t shoot as well in a larger role for a bad Portland team, but if he sniffs 40 percent again, suitors will come calling.
The Blazers have a clean cap sheet, and an extension that looks nutty now — something like three years, $21 million — might look genius in six months. Leonard’s new agents at CAA surely know this, which is why they could push for more until the Blazers just shrug and let Leonard test the market.
Jeremy Lamb: Lamb flamed out in Oklahoma City, but he’s going to get minutes for a team that badly needs his shooting. Charlotte also plans to let Lamb stretch himself as a ball handler. Minutes bring numbers, and numbers bring money, so the Hornets should at least see what it would take to preempt Lamb’s free agency. They might not reach a place that makes it worth Lamb’s while, and we’re saying that about a guy who has done basically nothing in the NBA. Welcome to the new salary-cap world.