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The Russell Westbrook Contract Conundrum

Russell Westbrook’s next step after Kevin Durant’s departure isn’t clear, but he has plenty of appealing options.

Tommy Beer

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Almost immediately after Kevin Durant announced he was leaving Oklahoma City (well before the hot takes related to Durant’s decision had been extinguished), nervous OKC fans and pundits across the country began discussing what would happen to the Thunder as a result of this monumental turn of events.

Specifically, how would the franchise handle the impending free agency of Russell Westbrook?

If Westbrook is unwilling to commit to Oklahoma City before hitting the open market next summer, can General Manager Sam Presti and the Thunder take the chance that they might lose two future Hall-of-Famers in consecutive offseasons with absolutely nothing to show for it?

Surely Presti and company will have to at least explore the possibility of trading Westbrook this summer.

However, attempting to trade a star player with just one year left on his contract is always an arduous task. The Thunder could only realistically expect to get back cents on the dollar. It’s almost impossible to receive equal value in return when trading away a superstar, even under ideal circumstances. Having little to no leverage makes it that much more difficult.

The teams that are most commonly assumed to be pursuing Westbrook via trade (such as the Boston Celtics and Los Angeles Lakers) are obviously hesitant to fork over significant assets for what could result in simply a one-year rental; especially when the Celtics and Lakers are fully aware they’ll likely be able to make a push to sign Westbrook as an unrestricted free agent next summer.

Thus, it has been rumored that the Celtics would make Westbrook agreeing to a restructured extension a prerequisite to completing a blockbuster deal.

So, how likely it is that Westbrook actually would consider an extension?

Well, TNT’s David Aldridge reported in early July that there was “no chance” that Westbrook would agree to an extension.

Is that still the case?

Aldridge also tweeted that, “It just makes no sense financially to do renegotiation/extension.”

While the potential financial benefits of playing out the 2016-17 season and then hitting free agency next July are significant, it would be fiscally prudent for Westbrook to at least weigh the pros and cons of inking an extension.

If Westbrook knows where he wants to spend the prime of his career, agreeing to an extension would greatly increase the probability of his preferred destination trading for him now, as opposed to having to wait to relocate next summer.

It’s true that we rarely see extensions in today’s NBA, due primarily to the complexities of the current collective bargaining agreement. The first impediment is that only a limited number of veteran players qualify for such an extension. Per salary cap expert Larry Coon’s FAQ: “A contract for four or more seasons can be renegotiated after the third anniversary of its signing, extension, or previous renegotiation. Contracts for fewer than four seasons cannot be renegotiated. A contract cannot be renegotiated between March 1 and June 30 of any year.”

Westbrook, who has completed four seasons of his current contract, does have the ability to renegotiate and extend his contract, just as James Harden and the Houston Rockets did earlier this month. Would Westbrook be willing to follow Harden’s lead?

Let’s look at the financial implications of such a decision.

There are a number of varied options for Westbrook to consider. Each one offers a complex mix of positives and negatives. In the end, he’ll have to weigh the relative importance of immediate financial security and establishing roots sooner rather than later versus the appeal of a prodigious payday a bit further down the road.

The first, and seemingly most likely scenario, is refusing to renegotiate/extend his current contract. That means simply playing out the final year of his deal, the 2016-17 season, and hitting the market as an unrestricted free agent on July 1st, 2017.

Following the conclusion of the 2016-17 season, Westbrook will have nine NBA seasons under his belt, which means he will be a Tier 2 Free Agent (those players with between seven and nine years experience), and thus eligible to sign a contract with a starting salary that accounts for approximately 30 percent of the salary cap. (As Coon clarifies: maximum salaries are based on 42.14% of Basketball Related Income [BRI], rather than 44.74 percent. For this reason the maximum salaries are not actually 25 percent, 30 percent or 35 percent of the cap, and instead are a slightly lower amount.)

In early July our Eric Pincus reported that the NBA has informed teams that they anticipate the salary cap to land at $102 million next season. 

Thus, Westbrook will be able to sign a contract next summer starting at roughly $28.8 million. If he was not traded, the Thunder would possess his full Bird Rights and they would be able to offer both more years (5) and larger annual percentages (7.5 percent).

Westbrook is currently scheduled to make $17.8 million this season. Here is what the max offer from OKC next July would look like (estimates based on a cap number of $102 million):

 

2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
$17.8 MM $28.8 MM $30.9 MM $33.2 MM $35.7 MM $38.4 MM

 

 

If a team such as the Celtics or Lakers traded for Westbrook this year they would also then possess his Bird Rights and could sign him to the same contract.

However, if Westbrook plays next season in Oklahoma City, and then signs elsewhere, a new (non-OKC) team would be unable to offer him the same lucrative package. Boston, for instance, would be able to offer a max contract of only four years in length with annual increases of just 4.5 percent.

Here’s the breakdown:

 

2016-17 2017-18 2018-19 2019-20 2020-21
$17.8 MM $28.8 MM $30.1 MM $31.5 MM $32.9 MM


 

Next summer, OKC (or whichever team controlled his Bird Rights) would be able to offer a max deal that sums to $167.0 million over five years. The max any other team could offer would be $123.3 million over four years.

Okay, with that as the baseline, let’s now look at the extension options on the table for Westbrook.

The benefit of a renegotiated extension is two-fold. First, Westbrook would be able to increase his 2016-17 salary from $17.8 million, all the way up to $26.5 million. Secondly, Westbrook would be able to immediately lock in a contract, which guaranteed him payment through 2020, thereby avoiding the risk of the catastrophic economic loss associated with a career-threatening injury suffered over the next 12 months.

However, there are some stipulations associated with extensions. Veteran extensions are limited to four seasons, including the seasons remaining on the current contract. Thus, Westbrook would only be able to lock in three additional seasons. So, while he’d be able to cushion himself from a worst-case scenario, he’d eliminate the potential of a big, long-term payday in July of 2017.

Another stipulation related to negotiated extensions is that the team signing Westbrook would need to have at least $8.8 million in cap space.

When Dion Waiters signed with Miami, his $12.8 million cap hold was wiped off OKC’s books, which means the Thunder now have the room required to tack on the additional $8.8 million to Westbrook’s deal.

If a team such as the Celtics were to receive confirmation from Westbrook’s agent that he would be willing to renegotiate/extend his current contract, they would need to clear the required cap space via trade to be able to offer a “max extension” as well.

Here is what restructured/renegotiated extension for Westbrook would look like:

 

2016-17 2017-18 2018-19 2019-20
$26.5 MM $28.3 MM $30.4 MM $32.7 MM


 

Westbrook would secure approximately $118 million in guaranteed money the moment he signed the extension. He would miss out on the free agency bonanza of 2017, but he would only lose about $500,000 per year, when comparing his annual salary from 2017-18 through 2019-20. That’s a total of roughly $1.6 million over those three years. However, it is important to note that when you factor in the $8.8 million more he’d make in 2016-17, that’s a net gain of about $7.2 million ($117.9 MM vs. $100.7 MM) over the next four seasons.

There is one other of option Westbrook could consider. He could sign a shorter extension with guaranteed money in 2016-17 and 2017-18, but with a player option for the 2018-19 campaign. This would essentially be a compromise between playing out his final season, and signing a full four-year extension.

The Vertical’s Bobby Marks broke down this scenario in detail last week:

“Westbrook, currently with eight years of service, could renegotiate his salary for this season to reflect a max-level contract while adding two additional years, with the third being a player option. This approach would have Westbrook becoming a free agent in 2018, when he reaches 10 years of service and becomes a Tier 3 max player. Waiting another year for free agency would see Westbrook’s salary start at $35 million in 2018 instead of $28.6 million.”

2016-17 2017-18 2018-19
$26.5 MM $28.3 MM $30.5 MM

 

Then, in the summer of 2018, Westbrook (assuming he’s still healthy and can command a max contract) could opt out and would be able to sign a massive, mind-boggling five year contract worth north of $200 million, with the team that owned his Bird Rights at that point:

2018-19 2019-20 2020-21 2021-22 2022-23
$35.4 MM $38.1 MM $40.8 MM $43.4 MM $46.1 MM

******

There are clearly plenty of appealing options for Westbrook to choose from. His ultimate decision will have a massive impact on multiple franchises. However, Westbrook has yet to even publicly address his feelings regarding Durant’s departure, let alone his own foreseeable future.

Thus, the Oklahoma City Thunder will remain stuck at a fork in the road until Russell Westbrook decides which direction he wants to head in.

 

 

Tommy Beer is a Senior NBA Analyst and the Fantasy Sports Editor of Basketball Insiders, having covered the NBA for the last nine seasons.

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Cavs Woes Reason For Concern, But Not Dismissal

Spencer Davies takes a look at the Cavs’ issues and why we shouldn’t count them out just yet.

Spencer Davies

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The Cleveland Cavaliers are the classic case of Dr. Jekyll and Mr. Hyde.

When they’re on, they look like the defending three-time Eastern Conference Champions. When they’re off, they look like an old team that’s worn down and, at times, disinterested—and it gets ugly.

Take this past three weeks for example. After going on a tear of 18 wins in 19 games, the Cavs have dropped eight of 11 and are falling fast. Two of those three victories in that stretch were decided by four points or less against bottom-of-the-barrel teams in the East.

So what happened? For one, the schedule got significantly tougher. Beyond just the level of competition, Cleveland has been on the road for a long while. Nine of the games in this recent down period have been away games. The only time they’ve been home was for a quick second in mid-December and a short stay for New Years.

You’ve got to think about how that affects a psyche, not only from an on-court standpoint but also in regard to spending time with loved ones and family. LeBron James brought attention to his own homesickness on Christmas Day while he was in the Bay Area instead of in Northeast Ohio to celebrate the holidays. If it gets to him, you know it’s got to get to the other players as well. These guys are human beings with lives, and the rigors of travel can wear differently on people. Luckily for them, seven of their next nine games will be at Quicken Loans Arena.

With that being said, everybody in the NBA goes through it, so it’s no excuse for how flat the Cavs have been. Anybody on the team will tell you that, too. However, when you’re figuring out rotations and re-implementing players who had injuries, it’s not easy. This is exactly why nobody should envy Tyronn Lue.

He’s being asked to make room in his rotations and adjust on the fly as Cleveland gets guys back. When they went on that month-long run, the reason they had success was that the second unit really clicked. Dwyane Wade found his niche as the maestro of the bench bunch along with any mixture of Kyle Korver, Jeff Green, Cedi Osman, Channing Frye, and Jae Crowder. Lue had found the perfect group to spell LeBron James and company.

But then, Tristan Thompson came back and, with all due respect, it messed with their flow. The spacing is no longer there for Wade or Green to penetrate because the paint is clogged. It makes it easier on opposing defenses to just stick to Korver because there aren’t any other threatening shooters on the floor (besides Osman, maybe). Worst of all, the change basically kicked Frye—who has a plus-14 net rating, according to Cleaning The Glass—out of the rotation completely.

Deciding who plays and when is a tough job. Derrick Rose is set to come back soon. Iman Shumpert is coming along as well. Lue likes a 10-man rotation, but there are at least 12 players who deserve to be on that court. We already know Rose is expected to commandeer the second unit in Wade’s absence on back-to-backs. As for if Shumpert remains in Cleveland, who knows? It’ll be interesting to keep an eye on how this situation is managed moving forward.

Isaiah Thomas, on the other hand, is somebody the Cavs have been waiting on to return since the season started. Despite LeBron being LeBron and Kevin Love having as great of an offensive year as he’s ever had on the team, the starting unit lacks an extra punch. Thomas can be that shot in the arm, and he proved that in his debut at home against Portland and on the road in Orlando. There are two snags that both he and the team are going to hit before the 29-year-old returns to his All-Star form: 1) He’s got to get his legs under him to regain the consistency in his game and 2) His teammates are going to have to adjust to playing with him.

These are not easy things to do. Remember, aside from Jae Crowder, there is nobody on Cleveland’s roster that has played with Thomas before. Add in that he’s trying to re-discover his own game and that makes for a pretty bumpy road, at least out of the gate.

Start here—put Thompson in the starting lineup. As poor of a fit he’s been on the bench, he has shown promising signs of a developing chemistry with Thomas. It’s only been four games, but he loves having a partner in the pick-and-roll game. That’s clearly where you’ll get the most production out of him and how he can thrive. He’ll provide hustle, second chance opportunities, and a semi-decent big that can at least bother some of the competition’s drives to the basket. Sliding Love over to the four might change his game a little bit, but you can still get him going in the post before giving him chances as a shooter to work him outside-in.

The resulting effect helps the second unit as well. They’ll get one of either J.R. Smith or Crowder, depending on who would be relegated there. Both of those guys can use a spark to get them going. Because of Crowder’s familiarity with Thomas, let’s say Smith gets kicked out. Maybe that gets him out of the funk he’s in? It also allows for Frye, who hasn’t seen more than 20 minutes in a game since December 4, to get re-acclimated to a group he truly helped on both ends of the floor earlier in the year.

Outside of the need to make a move at the deadline, the Cavs can figure this out. It’s understood that they’re the fourth-worst defensive team in the NBA, but they’ve gone through these kinds of ruts at this time of year, specifically since LeBron came back. There might not be statistical evidence backing up the claim of any improvement, but the track record speaks for itself.

The panic button is being hit, but pump the brakes a bit. This isn’t anything new. The pieces are a little different and things look as bad as they ever have, but in the end, the result will likely be the same.

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NBA Daily: Zach LaVine Has Solid Debut With Bulls

Zach LaVine put together a solid performance for the Bulls in his first game back from injury.

James Blancarte

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The Chicago Bulls are turning a corner this season. Zach LaVine is healthy after completing a year of rehabilitation from an ACL injury. LaVine’s return comes at a critical moment. The team is 13-7 over the last twenty games. Many of the wins in this stretch are over current competitors for a potential spot in the playoffs. This includes wins against the Charlotte Hornets (in overtime), the Philadelphia 76ers and three wins (one in overtime) against the New York Knicks. The stretch of winning ties into the return of forwards Bobby Portis and Nikola Mirotic. Having these key players back and winning this many games recently has changed the dynamics of what had been shaping up to be a losing season.

LaVine played in his first game of the season on Saturday and hit three of four three-point baskets while scoring 14 points in 19 minutes played. LaVine described how he felt physically and about the team’s recent run.

“I thought I did pretty good. I was tired as hell at first. But, we got the win,” LaVine said. “We’re going to keep this thing going.”

The team went into this season having parted ways with their franchise player, Jimmy Butler, in a trade that was derided by many for being lopsided. The trade netted the Bulls LaVine, point guard Kris Dunn and the sixth pick in the 2017 draft in exchange for Butler and the number 16 pick. The trade also allowed Butler to be reunited with coach Tom Thibodeau in Minnesota. For the Bulls, Dunn has greatly improved from the poor play of his rookie season in Minnesota. In addition, the Bulls selected Lauri Markkanen, whom has already displayed some serious talent and potential. Now with LaVine in the lineup, the Bulls can see the total value of the trade on the court.

So, where do the Bulls now stand? According to FiveThirtyEight, as of January 14, the Bulls are projected as having a three percent chance of making the playoffs with a projected record of 32-50. This is a jump from less than one percent (essentially zero percent) back on December 11, 2017. Still, three percent is not the most reassuring projection.

In addition, the recent shift to winning basketball also puts Chicago’s 2018 draft pick in a more precarious position. On December 6, 2017, the Bulls were 3-20 and were on pace to have one of the worst records in the league, if not the worst. Now every win moves the pick further away from a likely top three or even a potential number one pick and moves it closer to a top-10 selection or even middle of the first-round pick.

At the moment, the team is 16-27, good enough for 12th place in the Eastern Conference behind the Hornets, Knicks, 76ers and Milwaukee Bucks for the eighth and final spot in the playoffs. Being 6.5 games back and having seven more losses than the Bucks means the Bulls will need to continue winning at a high rate to make up the difference in the time left in the season.

LaVine didn’t hold back when it came to expressing his optimism regarding the team’s potential.

“I think we can make a push for this thing,” LaVine said. “That’s our job to do. That’s our job to do that,”

LaVine isn’t paying much attention to skeptics who still don’t believe the Bulls have much change to win anything meaningful this season.

“You know, we can’t control outside thoughts or anything,” LaVine said. “We’re ball players, we go out there and try to win every competition. You know, I think we’re good. I think we’re going to be good.”

In LaVine’s absence, Mirotic and Portis (despite their offseason scuffle) have emerged as two of the team’s best players. In addition, center Robin Lopez has done an admirable job keeping up his effort all season long while fulfilling his role as a veteran leader for the team. Lopez described the atmosphere on the team as positive recently in an interview with Joel Brigham of Basketball Insiders.

Despite the reason for optimism, it must be noted that the franchise might make another big trade that would diminish the team’s ability to be competitive this season. Despite his recent on-court success, reports are that Mirotic would like to be traded and that the Bulls asking price is a first-round pick.

Until such a move occurs, the Bulls appear poised to maintain their recent rate of success. Every win could cost the Bulls what could be a top overall pick in 2018. Regardless, the Bulls are surely feeling better about the results of the Butler trade, especially after LaVine’s impressive Chicago debut.

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NBA Daily: Lopez’s Enjoys “Old Guy” Role on Young Team

Robin Lopez is the old man on a very young Chicago Bulls team, but he says the camaraderie is a big reason why he’s happy there, and why the team is overachieving so much this year.

Joel Brigham

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When the Chicago Bulls started the season 3-20, nobody was surprised that they stunk. Everything was fine. They were supposed to stink. That was the entire reason they traded away Jimmy Butler for younger players in the first place. They wanted got their rebuild underway in earnest. (more…)

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