First, a primer: the NBA and NBA Player’s Association recently agreed to a new collective bargaining agreement that will last through the 2023-24 season, although there’s a mutual opt-out provision after the 2022-23 season. That means we don’t need to worry about any hand wringing over a potential labor stop for quite some time.
As part of that CBA, there are a number of new provisions that will affect contracts, extensions and potential player retention in the coming years. Obviously, that includes the Milwaukee Bucks, so I’ve compiled a few of those potential ramifications. Again, some of these are speculative given we have no actual knowledge of how the Bucks will handle upcoming extensions or free agent signings in the coming offseason.
Now, there’s an incredible amount of minutiae within the CBA that I could dive into regarding the mid-level exception, the luxury tax apron and other oddities that are pretty important regarding the Bucks roster construction this summer and beyond. I’m going to table those until later in the season when we have the final CBA and team building is more top of mind. I won’t ever hope to understand the cap or CBA as well as our former EIC or the many other savvy writers out there, so if you want to read more about the new CBA and its nuances in greater detail I recommend Tim Bontemp’s useful piece for the Washington Post, Albert Nahmad’s meticulous and informative article for HeatHoops or Brian Windhorst’s article on ESPN with the CBA aficionado, Larry Coon. Now, let’s dig in nerds:
What about Giannis’ contract extension he signed before the season? He’s still gonna be on the Bucks right? RIGHT?
Rest easy Bucks fans, Giannis’ four-year, $100M contract extension he signed before the season is still very much intact, and looking even better based on the deals signed by his fellow 2013 draft mates. In addition, the new CBA also allows for teams to dole out maximum annual raises for contracts of 8.0% for players signed using Bird Rights and 5.0% for all other players. Those numbers were previously 7.5% and 4.5% respectively, and Giannis’ contract is still under the previous 7.5% raises, meaning his deal should conceivably look even better than players signed to extensions next summer.
I heard there’s this new Designated Veteran Player Extension? Did we miss out by not being able to offer that to Giannis?
Short answer, no. The Designated Veteran Player Extension rule, apparently dubbed the “Kevin Durant Rule,” in common vernacular, is only eligible to players entering their eighth or ninth years in the league that have met a particular set of criteria (more on that later). The introduction of the designated veteran player extension is really just a more powerful tool to help teams keep their stars by allowing them to offer more years and significantly more money. For example, Stephen Curry’s deal with the Warrriors under this rule would be for 5-years, $209 Million. Any other team could only offer a piddly $133M over 4 years.
So, back to the Bucks. There are performance stipulations for the Designated Veteran Player Extension that also preclude Giannis or Jabari from this designation yet (and, bear in mind, this specific . Players will have either had to make an All-NBA team the prior season, or made an All-NBA team during two of the three prior seasons. They could also have been named defensive player of the year two of the three prior seasons, or have one MVP award in the prior three seasons. As of now, neither of those studs have that distinction, nor are they seasoned enough to qualify.
What this does does mean though is that if Giannis continues the sort of trajectory he’s on (knocks on wood), he may be eligible for this at his next contract, but its “what have you done for me lately” structure means it’s not certain that will be a sure thing (knocks on tree until it shatters into a million pieces). Players can get this extension whether they’re a free agent or still under contract with the team for another year. So, if all broke right, in the summer of 2020 Giannis would theoretically be eligible for a 5-year max extension starting at 35% of the cap that would start in 2021 and keep him on the Bucks until the 2025-26 season when he turns 31 years old.
Giannis could be eligible for a DPE extension in 2020 that would start in 2021 and be worth $240m+ over 5 years depending on cap growth.— Frank Madden (@fmaddenNBA) December 24, 2016
We don’t yet have an estimate of what the cap might be in the 21/22 season, but the NBA has provided a cap estimate of $114 million for the 20/21 season. In that season, a DPE deal would start at just shy of $40 million annually and be worth over $230 million over five years, so Frank’s estimate above assumes the cap continues to grow and enables a 21/22-vintage deal to be worth over $240 million.
The advantage for incumbent teams is significant: to sign elsewhere, Giannis would have to wait until 2021 free agency to get his monster new deal, and in that season another team would “only” be able to offer him a four-year, 30% max with 5% raises. That could add up to a $40 million pay cut even when excluding the extra year the Bucks can offer, which is great news for teams hoping to retain incumbent superstars for the long haul.
What about Jabari’s upcoming contract extension?
One sneaky wrinkle from Albert Nahmad is that teams are now allowed to designate two players on their own team as “Designated Players” coming off their rookie contracts. Previously they could only designate one player off their rookie deal. That won’t pertain to the Bucks, as Giannis already eschewed a potential 5-year, max money route for a shorter, cheaper deal to, presumably, provide the Bucks a smidgen of cap (and tax) flexibility. Jabari getting a “Designated Player” extension seemed like a moot point the moment Giannis took a cheaper deal, but if for some reason the Bucks wanted to ensure they locked him up to a 5-year deal rather than four, his max would be a 5-year, $156 million dollar contract. Again, that seems unlikely at this point. The more realistic outcome seems like a deal similar to, if not identical, to the contract Giannis signed this summer.
New CBA estimates:— Frank Madden (@fmaddenNBA) December 24, 2016
Jabari max extension (2017): 5yr $156m (8% raises)
Jabari max RFA deal (2018): 4yr $116m (5% raises)
If Jabari doesn’t sign an extension this coming summer, he would be a restricted free agent in 2018 and could sign with another team for as much as four year and $116 million based on current cap estimates. The Bucks would however have the ability to match, and they could also sign Jabari for up to five years and the same extension numbers we mentioned earlier.
How might that impact the rest of the Bucks roster?
The Bucks would be signing Jabari using his Bird Rights so that they’re able to go over the cap, but it’s still too early to know what exactly the salary cap and tax line will exactly be for the 2018-19 season. The current projections place it at $108 million for the cap and $130 million for the tax line according to a July 2016 NBA memo, but the players were able to get owners to expand the definition of basketball-related income that currently determines the cap and tax numbers. The $24 billion dollar TV deal was the primary income influx that caused the cap spike, but Adam Silver has been very vocal about looking for expanded revenue streams such as legal gambling. Selling sponsorships on jerseys is another revenue stream that Nate Duncan has mentioned many times on his Dunc’d On podcast. If that stuff gets added to the pot, it’s possible those projections could increase.
If the Bucks sign Jabari to an extension, they’ll have to figure out how to best manage a team paying three stars and a bevy of players who are making somewhat lucrative deals (Plumlee, Henson, Dellavedova, Teletovic) in bit parts. In addition, minimum salaries for all players will increase by 45%, and that number will adjust based on the salary cap in coming years, just like rookie contracts. For now, suffice it to say the Bucks will have a deft managing act in the coming years as the league determines how well these contracts signed this past summer age in the new cap environment.
But what about those cheap rookies? Can we still call Malcolm Brogdon a steal?
Of course we can! Rookies performing well will still be inherently valuable due to the relatively low cap hit of their deals, but incoming classes won’t carry quite the same weight as recent draft picks. Rookie-scale contracts are increasing by 45% next year, so for example, whoever is selected in Thon Maker’s 10th overall draft spot next year will make $3,724,470 compared to Maker’s current salary of $2,568,600 this year.
That’s not drastically different, but it does level the playing field for rookie contracts that were becoming almost too valuable in the current cap climate. And those figures are now going to scale with subsequent cap increases, so they won’t be locked in at a below dark-market level rate. One nice perk is that the league is making past rookies partially whole financially. Players drafted in the last three drafts will have their rookie contracts scale up 15% in 2017-18, 30% in 2018-19 and 45% in 2019-2020, until whenever their rookie deal expires. It’s important to note though that those increases won’t count against their team’s salary caps. So yes, Brogdon will continue to be a steal for the next two years of his contract if his current level of play continues.
I read something about “two-way contracts?” What’s the deal with those, are players finally required to play defense to get paid?
Two-way contracts have to do with players that will be alternating between the D-League and their big league clubs. Team’s maximum roster size will be bumped to 17, allowing for each team to have more control over those additional prospects rather than having them pilfered by other teams in the D-League. ESPN’s Marc Stein reports those contracts could be in the vicinity of $50K-$75K, a significant bump from the $26,000 top-tier D-League players receive.
This should be a boon for teams hoping to have more effective lower-level roster churn rather than having to keep that 15th roster spot open to shuffle through D-league players. Milwaukee’s own D-League team will provide an easier outlet for sending rookies to get playing time, and while Milwaukee isn’t a team known for signing undrafted rookies or free agents, this could provide a more manageable opportunity to look for diamonds in the rough. In addition, we may finally see them keep someone who flashes any bit of potential in training camp and preseason. Speaking of preseason…
Preseason is now one week shorter so the regular season can start sooner? So you’re saying I get legit basketball sooner...and teams get an extra week of rest built into their schedule?
It sure seems like it. Eliminating back-to-backs and four games in four nights has been a common goal for the league in recent years. Real Bucks basketball will be here a week sooner, and we won’t have to debate whether Marcus Landry should make the team or not for an entire month anymore!
Man, I just can’t wait to see Beas riding in on a hoverboard to celebrate.
Not so fast! Hoverboards, fireworks, firearms, and jet skiing are all apparently banned in the next CBA according to a report from Basketball Insiders. They’ve also banned trampoline jumping, but I didn’t see anything about trampoline standing, so Giannis and Co. can still join you on trampolines at the team’s annual summer block party next year...they just can’t jump on them. Crisis averted.