F Kevin Durant agrees to re-up with the Golden State Warriors. The contract is for two years, with the second year as a player option.
Not much surprise from Durant here, who takes a slight discount rate once again to help out the team, gets the one-and-one deal to maintain his flexibility and allow him to earn more in the future when the cap rises, the max contract available follows suit and the Warriors will repay that good will by paying Durant that big salary.
Golden State is saddled with tax payments, but if the reports of them bringing in a crisp $130 million from just their home playoff games is true, then luxury tax payments aren't much of a concern so long as they keep winning. Durant is someone we knew would come back, and this deal is agreed upon early. No surprise.
The Warriors are now at $134.5 million in salaries with ten players accounted for. They'll likely continue with free agency by shopping for veteran minimum players, their Mid-Level Exception and perhaps retaining restricted free agent Patrick McCaw, whose negotiations should draw out deeper into the process.
PG Chris Paul agrees to a four-year max contract with the Houston Rockets worth $159.7 million.
Paul's contract should break down with annual salaries of $35.7 million, $38.5 million, $41.4 million and $44.2 million, paying him until he's 37 years old and through June 2022. CP3 got that one last payday he wanted and negotiated as a possibility into the collective bargaining agreement during the latest CBA negotiations. Little surprise here either, as the Rockets were within minutes of making the NBA Finals with Paul, Harden and Capela as their core.
Of course, now the Rockets must cut the checks. New owner Tillman Fertilla has a lot of checks to sign: over the next few years, here are the combined salaries of Paul and Harden –– not counting a potential rich extension for big man Clint Capela:
2018-19: $66.1 million
2019-20: $76.4 million
2020-21: $82.2 million
2021-22: $88.1 million
Should Capela sign a deal north of $18 million, the Rockets will be paying more than $100 million for three players starting in 2020. Long-term, there are tax and cap ramifications the Rockets will certainly have to tackle, but nobody will think twice about whether that is worthwhile, given how close the team was to toppling the Warriors. Business as expected here.
Houston also retains G/F Gerald Green on a one-year veteran's minimum deal for $2.4 million
Because of Green's veteran status, he'll make $2.4 million but only $1.5 million of that counts against Houston's cap. The Rockets will also have Early Bird rights on Green for next summer, and Green gets a trade restriction clause in his contract signing the minimum again with the same team that doesn't hold his Bird rights.
Houston, after paying so much for their top end guys (and losing a starter to free agency, which we'll hit on later) getting Green locked in early was crucial. Look for the Rockets to try and do the same with Mbah a Moute within the early days of free agency.
Houston now sits at $117 million in player salaries and will have to negotiate with Clint Capela. If he's re-signed and the Rockets get a second-round pick in De'Anthony Melton to take a deal, that will be twelve players on the roster, with guys like Mbah a Moute and Joe Johnson still able to negotiate towards minimum deals, and the Taxpayer MLE at their disposal to replace Trevor Ariza. Houston is looking to be north of $140 million on player salaries next year.
The Oklahoma City Thunder retain G/F Paul George with a four-year, $137 million max contract that includes a fourth-year player option.
Speaking of teams with high payrolls, the Oklahoma City Thunder could shatter records next year when it comes to player salaries. George is the easiest decision to make though, as the Thunder will retain him, pay the core of George-Westbrook-Adams an absurd amount of money, and ride out the remainder of the Carmelo Anthony deal.
For the Thunder, this is a huge coup to get George to commit on the eve of free agency and without taking a meeting from another team. The Thunder needed to keep George around if they planned on competing, and we still could have a really good team with that core of three, a healthy Andre Roberson and a versatile Jerami Grant.
The Thunder have been on a delicate track for years now, and getting PG-13 to stay is important for them, despite the tax payments that flow thereof.
F Jerami Grant has agreed to a three-year, $27 million deal to stay with the Thunder
Joining George in quickly re-upping with the Thunder is Jerami Grant, and this is another big win for OKC from a competitive standpoint. Grant is young, versatile, strong on defense and likely to end up their cheapest starter moving forward. Now the Thunder have a starting five all signed for the next three years: Westbrook, George, Roberson, Grant and Steven Adams. What a defensive group.
Let's step aside from the on-court ramifications though. Here's the deal with Oklahoma City: they're at $155.7 million in player salaries for next season already, with only eleven players under contract. Based on their tax bills, they'll have about $130 million in tax payments next season, bringing the total up to about $288 million in monies doled out by owner Clayton Mortensen next season.
There's a way to significantly cut into that: stretching the contract of Carmelo Anthony. By spreading that value out amongst three years (2x + 1 is the formula for determining how long the remaining money of a contract can be spread across), the Thunder would have three years of about $9.3 million on their books for Melo. Next season, that saves them about $100 million total, reducing their salary down to $137.5 and cutting their tax bill down significantly.
It's not a slam dunk that this will happen for the Thunder, though. Spreading that $9.3 million across would add their 2019-20 and 2020-21 salary situations up to $140 and $127 million already, keeping them in luxury tax territory. It's much easier to imagine the Thunder ducking the luxury tax next year if Melo is completely off the books. Essentially this is a long-term decision for Oklahoma City to come to based on what they project and budget themselves to spend. It seems like the best course of action though would be to stretch Melo.
Keep tabs on the Thunder with how they fill out their roster. It will be filled with likely cost-cutting measures and G-League or Summer League guys, as well as maybe one or two veterans.
The Denver Nuggets agree to a five year, $147.7 million contract with RFA Nikola Jokic
Another expected result, although we're still waiting to see just how the final year plays out of this deal: will it include a player option, a flat five-year deal or a partial guarantee that protects both parties in the event they want a separation. The thought is that, by not exercising their team option for 2018-19 on Jokic, the Nuggets bought enough good will with him and his agent to get something more team-friendly that a fifth-year player option.
Still, it's shocking to see the numbers finally land on Denver's cap sheet with their player salaries. The Nuggets are up to $140.3 million in salaries, counting the hold of first-round pick Michael Porter Jr., with only two roster spots remaining. Locking up Jokic was incredibly important, as he's their franchise player that they have built everything around. Keeping a strong relationship is paramount here.
Denver wasn't done on the first night of free agency...
The Nuggets also re-signed G Will Barton to a four-year, $54 million deal
Big money for Barton, and the Nuggets coughing up quite a bit to keep him. I'm honestly surprised, and the deal brings the Nuggets up to around $151 million in salaries for next year. However, that number is all but certain to come down. Denver will repackage some young players or future picks to push the expiring contracts of Kenneth Faried ($13.76 million), Wilson Chandler ($12.8 million) or Darell Arthur ($7.5 million) onto teams with cap space. The Nuggets could fall about $20 million in salaries by getting rid of two of those three without taking anything else back, as unlikely as that is.
Either way, the long-term spending habits for the Nuggets will eliminate them from future free agencies and dictate a need to start winning now. They're up to $122 million for next season, missing out on the large 2019 free agent crop. They'll still have to replace the productivity of Chandler and Faried in that scenario as well, with draft picks potentially being gone due to the need to immediately dump salary.
Keep your eye on how GM Tim Connelly jumps around the tax here. I expect Denver to be above the luxury tax next year (and undoubtedly hard-capped), but to be a big time player on the trade market, hopefully sooner rather than later. They'll undoubtedly call teams like Brooklyn, Sacramento, Atlanta and Chicago early and often.
F Trevor Ariza agrees to a one-year, $15 million contract with the Phoenix Suns
We expected to see Ariza chase the money this summer and get one last payday, and it only made sense that it would end up as a one-year deal. With the expected cap spike next year, Ariza didn't project to be a valuable enough target to cut into any team's cap space. What is surprising, however, is Phoenix quickly removing themselves from anywhere else on free agency by pledging a high $15 million total on Ariza.
On the court, Ariza is the perfect stretch versatile forward for the Suns. He'll allow them to play multiple players on the wings and instantly becomes their starter at the 4 in what is finally a more up-tempo friendly team. What that means for guys like Marquese Chriss remains to be seen, but likely slides him to a low-end reserve role. The Suns have a glut of versatile, long wings: Ariza, TJ Warren, Josh Jackson, Jared Dudley – Ariza and Jackson should be the starters of that group.
Here's how the structures work for the Suns with the signing. If they renounce the rights to Elfrid Payton and Alex Len, which seems likely to happen anyway, the Suns would have $12.5 million in room off 14 roster spots. Ariza would make the fifteenth, but in order to create the extra room necessary for him to sign that $15 million deal, the Suns will have to request waivers on Alan Williams, whose $5.52 million contract has no guarantees until July 6th. Now that Ariza is in safe and has agreed, expect the Suns to waive Williams, then sign Ariza, and still have about $3 million under the cap, with which they'll sign 31st pick in the draft Elie Okobo.
Phoenix must find themselves still in the veteran point guard chase, and seem to be relying on the trade market here. Their expiring contracts of Tyson Chandler and Jared Dudley have value here. Perhaps the Suns try to angle for a veteran stop-gap point guard like Jeremy Lin or Jeff Teague.
Overall this is a good first step for the Suns to get more competitive next season. They still plan to have about $56 million in space next summer (half of which will likely go to Devin Booker) and will avoid the luxury tax safely this year while also having the non-guaranteed contract of Shaquille Harrison to waive if they want to use their Mid-Level Exception.
The Milwaukee Bucks agree with F/C Ersan Ilyasova on a three-year, $21 million deal
This one was really interesting, and in a positive way for the Bucks. Ilyasova is the perfect stretch-5 in Milwaukee for a team that badly needed outside shooting, knows and understands how to play for Coach Budenholzer and will have his rim protection disabilities covered by a team filled with length and athleticism. Three years is a bit steep, but the overall price tag for a role player like this is solid. Ilyasova was the saving grace for Philadelphia in their first-round series against the Miami Heat and should have a ton of value within Milwaukee's versatile lineup.
Ilyasova signed with the Bucks using the vast majority of their non-taxpayer Mid-Level Exception. By using more than the $5.45 million Taxpayer MLE for his annual salary, the Bucks are now hard-capped, meaning they cannot exceed the luxury tax apron line, which is set at $129.7 million. With $112 million in salaries currently, they're about $17.5 million shy of that level, giving them plenty of room to maneuver with re-signing Jabari Parker. Parker would make the fifteenth player on the roster, too, so the Bucks are set. They could also get an additional $3.5 million in tax relief if Mirza Teletovic's dead cap hit is taken off due to the NBA wiping it away due to his inability to be medically cleared.
Milwaukee is in solid shape financially here thanks to their cap management, but the Parker contract looms large. Should he bolt for another place, they lack the assets to replace him now that their Mid-Level Exception is dried up and they cannot use the Bi-Annual due to hard cap rules. Their best tools remaining: the $2.16 million remaining of the MLE and a $3.38 million trade exception from Greg Monroe, which expires in November. Smaller moves can be made by the Bucks, but they're basically done with their summer once they get a commitment from Parker.
F Doug McDermott agrees to a three-year, $22 million deal with the Indiana Pacers
Not as much of a fan of this one, to be honest. McDermott is making more than Ilyasova, and I'm not convinced he'll have close to the same impact. The Pacers wanted more shooting and now have a mobile 3 or 4-man in McDermott. There are plenty of believers in his around the league that wanted to see how he'd perform in a more tenable situation, but I'm really surprised to see him secure both a long-term deal and this much money. Perhaps the Pacers see something that I don't with him as a backup 4.
The way the Pacers structure this will be super fascinating. McDermott's deal can easily count against the Non-Taxpayer MLE, allowing them to wait to officially sign the contract until they utilize the full $12.8 million of their cap space (which could jump up to $20.5 million if they released some non-guaranteed contracts). Do the Pacers try to make a splash for one other restricted free agent they think they can snatch away?
I still think they'll end up trading away the contract of Al Jefferson to a team that needs financial help, but likely will hang onto that as long as they can, see cap space around the league dry up and then leverage themselves as a last resort money-saver and drive up the price. With that being the case, I don't know if the Pacers will get an impactful restricted free agent with their $12.8 million that cannot be bid on elsewhere.
Of course, the Pacers could also sign McDermott into cap space, have roughly $5.7 more that allows them flexibility to absorb other deals, and then wait to pledge the full $8.9 million Non-Tax MLE to a higher-impact player. Both are legitimate options, and that's why the McDermott agreement isn't too bad: they still have to many options with how to structure their summer.
Head Boys Basketball Coach, Boys' Latin School (MD).