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NBA Rookie Extensions: Kawhi Leonard

The Spurs are certain to extend Kawhi Leonard, right? Here’s why that might not be the best idea.

Nate Duncan

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The 2014 rookie-extension class is one of the most interesting in several years due to the high number of quality players entering their fourth seasons. As most readers likely know by now, teams have until October 31 to reach extensions with first-rounders entering their fourth seasons or the players become restricted free agents next summer. This year, many of these players fall into the fascinating middle ground between total busts and obvious max outs, and their negotiations are further complicated by the unknown effect of the league’s recently-announced new TV deal.*

*Teams and agents may also be waiting for additional clarity as the league and union discuss how to avoid too much shock to the system from the new money.

Over the next couple weeks, we will take a look at some of the more interesting cases, beginning with a player whose negotiations are a lot more interesting than they would appear at first blush.

Kawhi Leonard
Age: 23 (June 29, 1991)
Drafted: No. 15
2013-14 PER: 19.43
2013-14 ORPM: 0.89
2013-14 DRPM: 2.13
2015-16 Cap Hold: $7,235,148

Potential storylines abound in the extension talks with the third-youngest Finals MVP in NBA history. Kawhi Leonard has been called the San Antonio Spurs’ future by Gregg Popovich, and he is the only potential young star on the roster. Considering the fact that Gordon Hayward and Chandler Parsons, both inferior players to Leonard, received maximum deals as restricted free agents last offseason, a max extension may seem fait accompli to many.

On the other hand, the Spurs are widely perceived as consistently corralling their stars at below-market “unselfish” deals. Perhaps, some will think, that will result in Leonard doing the same. But those who don’t believe Leonard will seek to get his are ignoring quite a few factors. First, this is Leonard’s first big contract. By the end of his fourth season, he will have only pocketed about $8 million, about half of which was lost to taxes.

Second, Leonard is agent Brian Elfus and Impact Basketball’s biggest basketball client, per DraftExpress. Anything less than the max for Leonard (when it is widely perceived a foregone conclusion) might be seen as a failure, which is certainly a consideration for any agent.*

*This is not meant as a jab, it just acknowledges the reality of the situation for nearly any agent, whose job after all is to get the most money for their clients. For example, Enes Kanter’s agent Max Ergul is in a similar boat. Edit: A previous version of this article incorrectly stated that Mitch Frankel rather than Brian Elfus was Leonard’s primary agent.

Third, the Spurs’ “tradition” of getting players to take less money amounts to essentially only one contract, this latest three-year, $30 million pact with Tim Duncan. If you really look at the market and their performance at the time, previous contracts for Duncan (before 2012), Tony Parker and Manu Ginobili were market rate—they just turned into great deals as those players aged much better than expected. Expecting the Spurs to get Leonard to take less based on this “history” has little basis, especially considering those players had already made plenty of money and this is Leonard’s first big deal.

Thus, I think we can count on Leonard and his agent negotiating as hard as possible, as they should. But the Spurs did not get where they are by overpaying for players. Indeed, the fact that the two sides have yet to agree on an extension would indicate that they too are taking the negotiations seriously. In past years, we have seen five-year Designated Player maximum extensions for John Wall, Paul George and Kyrie Irving agreed to well before this point. If the Spurs had offered that, the deal would have been done already.

Despite the fact that Leonard is widely presumed to be worth the max on the open market, the Spurs have a number of reasons not to offer it at this point. Leonard is so good other teams may be loathe to offer him the max in the summer of 2015, tying up their cap space for three critical days knowing the Spurs will undoubtedly match. A matched contract would have lower 4.5 percent annual raises, a potential advantage to San Antonio in the later years of the deal as the cap rises. And if Leonard is not extended an offer sheet by another team, a la Eric Bledsoe this year, that could provide additional leverage for the Spurs to obtain a deal below the max next summer.

Waiting until next summer also allows the Spurs to offer a five-year contract without using up their Designated Player extension (although there are no potential candidates for it right now), or by offering a five-year contract for below the maximum.* A five-year contract locking up Leonard through age 29 at pre-TV increase rates could prove a big value for the Spurs by the end, and could also make Leonard’s deal more tradeable if needed.

*As the Denver Nuggets and Kenneth Faried found out, a five-year rookie extension must be for the max.

Moreover, as with any rookie extension, the Spurs will obtain more information on Leonard’s performance if they wait until the summer. There is little risk that his price tag will go up significantly given he is already projected as a max player. And there is some performance risk, either through injury or a lack of development offensively. It must be noted that, while Leonard has been one of the best complementary pieces in basketball the last two years, he has not shown much indication he can be a primary creator yet. We should not foreclose such a possibility, but it is by no means a foregone conclusion. The Spurs of course will not wish for anything to happen that would negatively impact Leonard’s value, but if they wait they are protected in case something does.

On the other hand, Leonard has little leverage if he waits. He would be footing the risk of injury or performance decline by doing so. And even if he gets to restricted free agency, the payoff may be marginal because he could have trouble getting an offer sheet—which would give him smaller raises anyway.

He only has two options at his disposal to create some leverage. One is potentially taking the qualifying offer, as Greg Monroe did this year. But Monroe seems very unhappy in Detroit; it seems unlikely Leonard would take such a risk to get out of San Antonio. The scarier option for the Spurs would be the specter of a Chandler Parsons-style offer sheet, three years for the maximum with a player option for the third year. The Spurs are no doubt hoping to lock up Leonard for the maximum number of years to get value on the back end as the cap rises—being forced to match the Parsons three-year offer (which they almost certainly would) allows Leonard to either leave or force a re-signing at cap-inflated market rate after two years in 2017. Unfortunately for Leonard though, getting another team to make such an inevitably-matched offer could be easier said than done. The Spurs also may be hesitant to upset him through perceived low-balling, but that is probably less a concern than on other teams with worse cultures.

Now consider the Spurs’ greatest reason to wait: Leonard’s free agent cap hold will be only $7.2 million this summer, less than half the $16 million or so he would occupy if he receives a max extension now. That extra cash could be critical if Duncan and Ginobili retire after the season. The Spurs may have a better internal idea of their plans than we do, but their age, health and the Spurs’ performance this year all render those future plans at least somewhat uncertain.

If Duncan and Ginobili play another year, the Spurs will not have a realistic path to cap space even if they do not extend Leonard. Even if those stars are immediately re-signed to an amount similar to their previous salaries, that would not create much cap room for the Spurs. And even that would likely be extinguished if Danny Green is re-signed.

AllCapHoldsSpurs
Let’s assume several things: The cap will be $69 million next summer, and $80 million in the summer of 2016. Those are obviously very rough and conservative estimates, but they track with some of the reporting by Larry Coon in this article, which indicates that the increase in the cap due to the TV deal may be smoothed into effect over a four-year period, resulting in approximately a $4 million per year increase on top of the “normal” cap increases. That will probably end up around $9 million per season starting in 2016-17. I included only the Spurs’ main players for this scenario in which the Spurs may try to lure free agents. Guys like Aron Baynes or Cory Joseph were left out because those players probably are not important enough to be retained at the expense of bigger fish. The 4-7 year maximum is computed based on a “cap” based on 42.14 percent of BRI rather than 44.74 percent. That’s why Leonard’s “25 percent max” is actually 24 percent of the actual cap to start.

Now, suppose Leonard is extended for the max, but Duncan and Ginobili announce their retirement. The Spurs still have little in the way of cap space. If Green and Marco Belinelli were renounced they might be able to squirm their way into fitting one maximum slot, but those are two valuable players the Spurs would be loath to renounce.

NoDuncanManuLeonardMax

But let’s say the Spurs wait to sign Leonard, allowing him to become a restricted free agent. Now they have an additional $9 million or so in cap space, almost enough for a maximum salary to a player with 4-7 years of experience.  Under this scenario, the Spurs would sign free agents up to the cap, then re-sign Leonard using his Bird rights, which would enable them to exceed it.

NoDuncanManu

Renouncing Belinelli gets them there, and Patty Mills could be traded to get up to about $20 million, close to max territory for more experienced players. With Parker, Green, Leonard, Boris Diaw, Tiago Splitter and possibly Mills, the Spurs might be a very attractive destination for members of the 2015 free agent class, which could include LaMarcus Aldridge, Al Jefferson, Brook Lopez, Roy Hibbert, Paul Millsap, Luol Deng, any other 2011 draftees who do not sign extensions and others. The Spurs could also add a few lesser free agents to build their depth and remain competitive while trying for a bigger splash when the cap goes up much further in 2016. Replacing Duncan and Ginobili with players of that caliber could enable the Spurs to remain right in the championship mix.

The Spurs have a lot of leverage and some very good reasons for waiting on a deal. On the other hand, Leonard is, in the marketplace, a max player. Is there a middle ground? If the Spurs know Duncan and Ginobili plan to play next year, then that could be the impetus to get a deal done. But if not, Leonard would have to give up a lot of money in an extension to equal the potential lost opportunity in the summer of 2015 if the legends retire. Maybe the Spurs could offer a deal starting at the max but remaining flat or declining in salary rather than featuring the maximum 7.5 percent annual raises. But that would only save a few million per season at most on the back end of the deal, not the front, so it would not help in 2015. It seems unlikely Leonard would be willing to start much lower than the max, so there may not be a deal to be had here.

Perhaps the solution will be a wink-wink agreement on the structure of a deal once he becomes a free agent in 2015. Whether there is a preexisting arrangement or not, I think the best outcome here is Leonard re-signing in the summer of 2015, shortly after the Spurs have conducted their other free agent business, to a deal very close to – if not right at – the max. But unless he is willing to take a more significant discount than anticipated, it may not behoove the Spurs to extend him now.

Nate Duncan is an NBA analyst and attorney. He writes regular features for Basketball Insiders and chats weekly at 11 Eastern on Tuesdays.

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NBA Daily: Rich Cho Out As Charlotte Hornets GM

The Charlotte Hornets opted to not move forward with GM Rich Cho and are expected to pursue former Lakers GM Mitch Kupchak.

Buddy Grizzard

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The fateful moment for Rich Cho came days after he was hired as GM of the Charlotte Hornets in June of 2011. With the NBA Draft coming just nine days later, Cho started work on a three-team trade that would land Charlotte a second top-10 pick to pair with its own ninth pick, which was used to draft franchise cornerstone Kemba Walker.

In that draft, Klay Thompson went 11th to the Golden State Warriors and Kawhi Leonard 15th to the Pacers. Of the 17 players selected after Bismack Biyombo, who went to the Hornets with the seventh pick, 12 are regular contributors on current NBA rosters. The Orlando Magic are currently outscored by 11.6 points per 100 possessions with Biyombo on court, a rotation-worst.

Today, Hornets owner Michael Jordan announced that Cho is out as Charlotte’s GM.

“Rich worked tirelessly on behalf of our team and instituted a number of management tools that have benefited our organization,” said Jordan in a press release. “We are deeply committed to our fans and to the city of Charlotte to provide a consistent winner on the court. The search will now begin for our next head of basketball operations who will help us achieve that goal.”

While the failure to obtain Thompson, Leonard or any of the numerous impact players in the 2011 draft will always mar Cho’s record, falling to the second pick in the 2012 NBA Draft will continue to haunt Charlotte. Despite a brutal 7-59 record in the lockout-shortened 2011-12 season, which set the record for lowest win percentage in an NBA season (.110), the New Orleans Pelicans won the right to the first overall pick and selected Anthony Davis.

The Hornets selected Michael Kidd-Gilchrist with the second pick. Although the 2012 Draft wasn’t nearly as deep as 2011’s, the Hornets still left players like Bradley Beal (third) and Andre Drummond (ninth) on the board. Either would have been an outstanding compliment to Walker, who remains with the team despite rumors of his availability leading up the the trade deadline.

“I feel like I’m going to be in Charlotte,” said Walker at his All-Star media availability. “So that’s where I’m at, that’s where I’m playing. So I never really sat and thought about any other teams.”

Walker made his second All-Star appearance after Kristaps Porzingis suffered a season-ending ACL injury.

“I wish K.P. hadn’t gotten hurt,” said Walker. “Everybody hates to see guys go down, especially great players like him. But when I was able to get the call to replace him, it was a really good feeling.”

Another fateful moment in Cho’s tenure came during the 2015 NBA Draft. According to ESPN’s Zach Lowe, the Boston Celtics offered the 15th and 16th picks, a future protected first rounder from the Brooklyn Nets and a future first from either the Grizzlies or Timberwolves in exchange for the ninth pick, which Cho used to draft Frank Kaminsky.

“If it was such a no-brainer for us, why would another team want to do it,” Cho asked rhetorically in defense of the Kaminsky selection, according to Lowe.

Years later, it’s evident that the Celtics dodged a bullet when both Charlotte and the Miami HEAT rebuffed its attempts to move up and draft Justise Winslow. The latter has not panned out while Jaylen Brown and Jayson Tatum, the players Boston subsequently obtained with Brooklyn’s picks, have developed into starters.

Chris Mannix of Yahoo! Sports reported in the first week of February that Charlotte may target former Lakers GM Mitch Kupchak for a high-ranking role in the organization. Kupchak, like Jordan, is a former UNC star. Kupchak would join Jordan’s UNC teammate and Charlotte assistant GM Buzz Peterson.

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The G-League is a Path Back to the NBA

The G-League has become an avenue for several player types toward the NBA, writes David Yapkowitz.

David Yapkowitz

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When the NBA first instituted their development league, its main purpose was two-fold. The first was to give experience to young players who perhaps were not seeing regular playing time on their respective NBA teams. The second was to give undrafted players a chance at getting exposure and ultimately getting to the NBA.

With the growth in size and popularity of the development league, now known as the G-League, it’s begun to serve another purpose. It’s become a place for older veterans who have already tasted the NBA life to get back to the highest level of basketball that they once knew.

One player in particular who has a wealth of NBA experience is Terrence Jones. Jones is currently playing with the Santa Cruz Warriors, the G-League affiliate of the Golden State Warriors.

Jones was originally drafted by the Houston Rockets with the 18th overall pick in the 2012 draft. He was part of a vaunted class of Kentucky Wildcats that year, which included Anthony Davis, Michael Kidd-Gilchrist, Marquis Teague, Doron Lamb, and Darius Miller. During his four years with the Rockets, he emerged as a dependable reserve and part-time starter. He averaged 9.5 points per game on 49.5 percent shooting and 5.3 rebounds.

“It was just a lot of excitement and a lot of joy, being part of the Houston Rockets was a lot of fun,” Jones told Basketball Insiders. “We had great memories and great seasons, a lot of up and downs, I just enjoyed the journey.”

Jones’ dealt with injuries his last two season in Houston, and when he was a free agent in the summer of 2016, the Rockets didn’t re-sign him. He was scooped by the New Orleans Pelicans, however, and he made an immediate impact for them. Prior to the trade deadline, he played in 51 games for the Pelicans, including 12 starts while putting up 11.5 points on 47.2 percent shooting, and 5.9 rebounds.

When the Pelicans acquired DeMarcus Cousins, however, they cut Jones. He didn’t stay unemployed for long, though, as he was signed by the Milwaukee Bucks to add depth for a playoff run. He was unable to crack the rotation, though, and the Bucks cut him as well before the playoff started. After a brief stint in China, he’s now back stateside and using the G-League to get back to the NBA.

“That’s the goal. Right now, I feel I’ve been playing pretty well and just trying to help my team get wins,” Jones told Basketball Insiders. “I think I can play multiple positions offensively and defensively. Whether that’s creating plays for myself or for others, I think I can help contribute on the offensive end.”

He’s been the second-leading scorer for Santa Cruz with 19.9 points per game. He’s pulling down 7.1 rebounds, and even dishing out 4.5 assists. In the G-League Challenge against the Mexican National Team at All-Star Weekend, he finished with eight points on 50.0 percent shooting, six rebounds, four assists, and two steals. He’s definitely a name to watch for as NBA teams scour the market for 10-day contract possibilities.

Another player who’s had a taste of the NBA is Xavier Silas. Silas is currently with the Northern Arizona Suns, the affiliate of the Phoenix Suns. He went undrafted in 2011 and started his professional career in France. That only last a few months before he came back the United States and latched on with the Philadelphia 76ers.

He played sparingly with the 76ers and was ultimately cut before the start of the 2012-13 season. Since then, he’s played summer league with the Bucks, and been in two different training camps with the Washington Wizards.

“It was amazing, any time you get to go and play at the highest level, and I even got to play in the playoffs and play in the second round and even score, that was big,” Silas told Basketball Insiders. “It was a great time for me and that’s what I’m working towards getting back.”

While his professional career has taken him all across the globe from Israel to Argentina to Greece to Germany and even Ice Cube’s BIG3 league, he sees the G-League as being the one place that will get him back to where he wants to be.

He’s done well this season for Northern Arizona. He’s their third-leading scorer at 19.3 points per game and he’s one of their top three-point threats at 39.9 percent. At the All-Star Weekend G-League Challenge against the Mexican National Team, Silas had a team-high 13 points for Team USA including 3-5 shooting from three-point range.

It’s isn’t just what he brings on the court that Silas believes makes him an attractive candidate for an NBA team. At age 30, he’s one of the older guys in the G-League and one with a lot of basketball experience to be passed down to younger guys.

“I think it’s a little bit of leadership, definitely some shooting. I’m a vet now so I’m able to come in and help in that aspect as well. But everybody needs someone who can hit an open shot and I think I can bring that to a team,” Silas told Basketball Insiders. “I think it’s the best place for anyone who’s trying to make that next step. We’re available and we’re right here, it’s just a call away.”

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NBA Daily: Lillard Playing For Something Bigger

Portland Trail Blazers star Damian Lillard has his eyes set on a bigger prize than just being an NBA All-Star.

Steve Kyler

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Playing For Something Bigger

The NBA All-Star Game is a spectacle.

By design, the game is meant to be a showcase, not just for the players selected to compete, but for the league and all of its partners, on and off the floor. It is easy to get caught up in how players selected actually play, but the reality is while most see the game as important for a lot of reasons, Portland Trail Blazer star Damian Lillard understands it has to be put into perspective.

“I don’t think it’s fair to expect people to go out there and treat it like they are playing for the team they’re under contract for,” Lillard explained this weekend.

“It’s the one time in an 82-game season plus playoffs, preseason and training camp that we actually get a break. It’s necessary to take a mental break, along with a physical break from what we do every day. There’s nothing wrong with that, so I don’t think it’s fair to ask guys to go out there and play like it’s for the Trail Blazers. My loyalty is to my team; I got to stay healthy for my team. I got to do what’s best for my team. Obviously, go out there [during All-Star] and not mess around too much and that’s how people get hurt and stuff like that. You got to go out there and play and have respect for the game, but I don’t think it’s necessary to go out there and go crazy like it’s a playoff game.”

Lillard notched 21 minutes in Sunday’s big game, going 9-for-14 from the field for 21 points for Team Stephen, a roster that included three Golden State Warriors players. Lillard believes that eventually, he’ll get the chance to share the weekend, his third, with teammate C. J. McCollum.

“Each year you see teams are getting two to three, Golden State got four this year,” Lillard said. “But you look at it and say ‘why is that happening’ and it has a lot to do with team success. Me and C.J. just have to take that challenge of making our team win more games. I think when we do that, we’ll be rewarded with both of us making it. If we really want to make that happen, then we’ll do whatever it takes to win more games.

“I feel like this season we’ve moved closer in that direction. In the past, we haven’t even been in the position to get one, because I did not make it the past two years. I think if we keep on improving we’ll eventually get to the point that we’re winning games and people will say ‘how are they doing this’ and then hopefully our names come up. Hopefully, one day, it’ll happen.”

Another issue that got addressed during the All-Star Weekend was the growing tensions between the NBA players and the NBA referees. Representatives from both sides met to address the gap developing on the court, something Lillard felt was necessary.

“We’re all human,” Lillard said. “As competitors, we want to win. If you feel like you got fouled, you want them to call the foul every time. I think sometimes as players, we forget how hard their job can be. At the pace we play, it’s hard to get every call, and then you got guys tricking the referees sometimes, we’re clever too. It’s a tough job for them. I think when we get caught up in our competitive nature, and we forget that they’re not just these robots with stripes, they are people too. You have got to think, as a man if someone comes screaming at you every three plays, you are going to react in your own way. Maybe you’re not going to make the next call; maybe I am going to stand my ground. It’s just something that I think will get better over time. I think both have to do a better job of understanding.”

With 24 games left to play in Lillard’s sixth NBA season, the desire to be more than a playoff team or an All-Star is coming more into focus for Lillard, something he reportedly expressed to Blazers management several weeks ago.

“There are guys that have this record and guys that have done these things, and I want to at least get myself the chance to compete for a championship,” Lillard said. “If I get there and we don’t win it, it happens. A lot of people had to go see about Michael Jordan, a lot of people had to go see about Shaq and Kobe. You know, those great teams, but I have a strong desire to at least give myself a chance to be there. Take a shot at it.”

With All-Star out of the way, the focus in the NBA will switch to the race to the playoffs. As things stand today Lillard and his Blazers hold the seventh seed in the West and are tied with Denver, and just a half of a game back from the five seed Oklahoma City Thunder.

If the Blazers are going to make noise this post season its going to be on the shoulder of Lillard, and based on what he said, it seems he’s up to the challenge.

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