Anthony Davis and Damian Lillard. Two All-Star free agents in the class of 2016 that came off the board once the clock struck midnight on July 1. Although both players are still under their rookie contracts for the 2015-16 season, Davis and Lillard became eligible to receive rookie extensions once the new NBA calendar year kicked in.
So are rookie extensions different to veteran extensions? Yes, in many different ways.
Starting July 1 and ending October 31, teams have the right to negotiate an extension with draft picks entering the fourth year of their rookie contracts. Teams only have a four-month window compared to a 12-month period for veterans looking for extensions. Rookies are limited to a total of five years, which includes the last season of their current contract. In 2011, the Collective Bargaining Agreement introduced a few wrinkles to help monetize and add a fifth year to players that reach certain benchmarks.
In the case of Davis and Lillard, both New Orleans and Portland picked each player as their “Designated Player”. By doing so, Lillard and Davis could receive five-year extensions not including the final season of their rookie contracts (2015-16). Teams are only permitted to have one player on its roster with the designated tag. Teams are also permitted to carry an additional “Designated Player” if he was acquired in a trade.
In the case of Oklahoma City, Kevin Durant and Russell Westbrook both signed rookie extensions for five years. However, Durant signed his extension in July 2010 under the old CBA. The NBA grandfathered Durant in and allowed the Thunder to carry two players. Since 2011, we have seen teams designate eight players – Derrick Rose, James Harden, Paul George, Blake Griffin, Russell Westbrook, John Wall, Davis and Lillard.
The game of poker has started between teams and player agents. A total of 21 players will be eligible for extensions. There are the known names like Bradley Beal, Michael Kidd-Gilchrist and Andre Drummond. You also have under-the-radar players like Terrence Jones, Donatas Motiejunas and John Henson.
With the rise of the salary cap in 2016-17, team philosophies will shift on how they conduct business this summer and fall. Will a team risk salary cap space to lock up a rookie? Or will a team let a rookie enter into restricted free agency knowing that 24 teams lie in waiting with massive cap space?
In Washington, the rookie extension of Beal will be front and center. It is well known in NBA circles that the Wizards are lining up their books to make a run at DC native Kevin Durant next summer. Washington right now has roughly $27 million in cap space in 2016-17. The Wizards’ cap space could jump to $38 million when you factor in four players that have partial or non-guaranteed contracts. The above mentioned cap space does factor in the $14.2 million cap hold for Beal.
So what do the Wizards and Beal do in the next three months?
What we saw this past free agency is that wings are paid at a premium. Because Washington already tagged Wall as its “Designated Player”, the most years and money in an extension that the Wizards can offer Beal is four years with a maximum salary of $90.8 million. Bypassing the rookie extension could accomplish something for Washington and Beal. Similar to what San Antonio did with Kawhi Leonard, Washington could elect to keep Beal’s $14.2 million cap hold on the books and go into free agency with the maximum amount of cap space possible.
Signing a max free agent and core pieces would allow Washington to circle back to Beal and give him and his agent Mark Bartelstein the contract they would be looking for – five years at $117 million. Bartelstein and the Wizards will have to be on the same page when free agency begins, similar to what happened with Leonard and the Spurs. If not, expect teams to start circling the wagons looking to make Beal very wealthy.
Two players that will be demanding big money ironically play on the same team and the same position, but with different styles. Jones and Motiejunas from the Rockets are two under-the-radar players looking for extensions. Both players will account for roughly $12 million in cap holds for Houston next summer.
Unlike Washington, the Rockets will be right at the salary cap. This factors in Dwight Howard opting in and bringing back Ty Lawson, who has a non-guaranteed contract. The Rockets’ philosophy has always been to maintain cap flexibility going into free agency. However, potentially losing both players could be devastating because the Rockets would have close to $80 million in guaranteed contracts.
It is always better to retain your own free agents than going out into the market and overspend on another team’s free agent. Do the Rockets lock up both young players under the age of 25 or do they let them enter restricted free agency as two of the prime free agent targets? Does a team with maximum cap space target either player?
So will this be the summer where we finally have restricted free agents switch teams? Yes, and only because team’s will be forced to spend and do so at extreme measures.
Can Golden State afford to keep Harrison Barnes at a near max contract? The Warriors are facing a potential stare-down with Barnes and his agent Jeff Wechsler.
Golden State has $72 million committed in guaranteed salaries for 2016-17. Can the Warriors stay at a championship level with high salaries and still have the resources to improve? The new TV money and rising cap and luxury tax will offset these salaries.
But remember Stephen Curry, who has been underpaid the last few years, is due to be a free agent in 2017. If you factor in Barnes at near-max money and Curry at the max, you are looking potentially at $80 million in salaries for four players – Curry, Barnes, Klay Thompson and Draymond Green. Don’t be surprised to see a player of Barnes caliber entertaining offer sheets from multiple teams.
Twenty-two players in the last four years have received rookie extensions. Who is the next Summer of 2016 free agent to come off the board? Or is a team with maximum cap space willing to overpay?
Bobby Marks was the Nets’ assistant general manager from 2010 to 2015. You can follow him on Twitter @bobbymarks42.
Article, Free Agency, Featured, Free Agency, Top, Anthony Davis, Bradley Beal, Damian Lillard, Harrison Barnes, Kevin Durant, Golden State Warriors, New Orleans Pelicans, Oklahoma City Thunder, Portland Trail Blazers, Washington Wizards