The Waive and Stretch: Extensions Galore
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The Giannis Extension
The Milwaukee Bucks pulled it off. They were able to get Giannis to sign an extension that financially didn’t really make sense to make in that moment. Giannis tacked on an additional 3 years, at a max amount of $186.7 million in new money. That brings him to 5 years, $281 million guaranteed, with a player option in the last year (dependent upon cap increases). It was reported that this deal was done to maximize Antetokounmpo’s career earnings. However, I’m not really buying that. One, he could’ve waited and signed this exact same deal next offseason after seeing how year one with Damian Lillard worked out. Two, if he really wanted to maximize his career earnings, he should’ve waited and done 1+1 (2 years with player option in second) deals once the new TV money kicks in and the cap is rising at a higher rate than contracts can (10% vs 8%). A somewhat risky proposition, but he is one of the three best players on the planet. Based on Giannis’ telling, the decision might’ve had more to do with the peace of mind that comes with it than the money. Regardless, good for Milwaukee on doing what it takes to be committed to winning and good for Giannis for rewarding that commitment.
Rookie Extension Day Is Done
The dust has settled on the final days of the offseason, and there was a flurry of activity as teams worked to get their rosters into compliance and come to terms on extensions. Let’s go through all the rookie extensions that have rolled in over the last couple days.
Rookie Extensions
It was a bit surprising to see the number of rookie extensions that ended up happening. While a lot of it does depend on a team-by-team case, generally I think teams did well to sign these guys to reasonable deals as we head into this cap appreciation era. It would seem that the players and their representation were pretty risk averse when deciding whether or not to take it to restricted free agency next offseason. While I don’t expect a ton of cap space teams, a chunk of these deals were signed around or below the Non-Taxpayer MLE. Additionally, another group of these guys could’ve leveraged their own teams luxury tax situations to seem more “gettable” in an offer sheet to other teams. With such a large number of extenders, we could see the decision to wait pay off for guys like Immanuel Quickley, Patrick Williams, or Obi Toppin, as the market was thinned a bit.
Here is a look at all the rookie extensions that were signed, as compared to what EPV would value them at over the same length of contract.
Onyeka Okongwu, Atlanta Hawks
Deal: 4 years, $62,000,000
Structure:
This deal is an absolute steal for the Atlanta Hawks. For them to extend Okongwu at a very similar number to what the Pistons brought back Isaiah Stewart is a song. His contract averages out to be right around what the non-taxpayer mid-level exception will be over the life of the deal. As you can see, EPV values Okongwu at a significantly higher number than what he signed at. As for the Hawks, reasonable extensions for both Okongwu and Murray have provided some relief in terms of the luxury tax for 2024/2025, though that depends on how much the salary cap rises year-over-year and what they do.
Deni Avdija, Washington Wizards
Deal: 4 years, $55,000,000
Structure:
I think this is a combination of a bet on Avdija’s future and the fact that the Wizards had a lot of cap space going forward and not very many places to spend it. By descending the deal, the team gets to preserve cap space on the out years. They won’t have to worry about being able to extend Avdija despite descending the deal, because regardless of how they would’ve structured it the last year of the deal will likely be less than the average player salary anyways, so they will be able to extend off that if they so wish. The team can still carve out significant cap space for next year with this deal on the books.
Aaron Nesmith, Indiana Pacers
Deal: 3 years, $33,000,000
Structure:
This one was a bit of a head scratcher to me, but I can see why the Pacers did it. They are already pretty well stocked at the wing/forward position, but I’m guessing they didn’t want both Nesmith and Obi Toppin to hit restricted free agency next summer. With the unlikelihood of Toppin extending since he just arrived, that left Nesmith. While I don’t think he would’ve gotten this much in restricted free agency, I don’t think its a wild overpay. It is another chunk contract that the Pacers can included in any potential trade down the line as well, and can provide some peace of mind in the case that Toppin signs a lucrative offer sheet elsewhere. The Pacers have a lot of cap flexibility this offseason, they can either go the cap space route or stay over the cap and bring back their own free agents.
Cole Anthony, Orlando Magic
Deal: 3 years, $39,100,000 (team option in final year)
Structure:
This deal seems like a hedge on the upcoming free agency for Markelle Fultz this summer. If the Magic let Fultz walk in the summer or deal him this season, then Anthony can slide into that starting point guard position. If not, he will be one of the highest paid backup point guards in the league, but with only two guaranteed years with the team option on the end. We will see if Anthony can play up to the deal (though very early returns have been good). The Magic still have the opportunity to carve out significant cap space this offseason as well.
Josh Green, Orlando Magic
Deal: 3 years, $41,000,000
Structure:
EPV has this as another big time win for the team, valuing Green at about $54.7 million over three years. Another deal where the team was backed up against future luxury tax concerns, and it seems they were able to use that to their advantage in contract negotiations. On the flip side, I doubt the Mavericks will be able to get any traction on a possible extension with Green when available. On the positive side, Green and his representation were able to keep it to three years and will get back out on the market at 26 after a couple years of salary cap appreciation. Similar to Atlanta, Dallas has a path to staying under the tax next year depending on how much the salary cap increases.
Jaden McDaniels, Minnesota Timberwolves
Deal: 5 years, $131,000,000
Structure:
This was the major extension that everyone wanted to see how (if) it would come out. To me, this was a big win on the team side, to lock in McDaniels for five years at a very reasonable number. It is very similar to the Mikal Bridges extension or OG Anunoby extension. But could you imagine if either team had locked one of those guys up for five years. Bridges is still under contract for this year plus 2 more years, and is one of the best value contracts around the league. Same with Anunoby, who luckily has a player option. From McDaniels’ standpoint, it would’ve been very hard to turn down $131 million guaranteed, I get it. But there’s a very real scenario where we are discussing how under-paid he is by year 3 or 4 of that deal, just like Bridges.