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 season 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.*
Due to the rising cap, it is useful to think of new deals in percentage terms. For example, a $10 million contract under the $58.044 million cap in 2012-13 was 17.2 percent of the cap. For the 2016-17 season, assuming the cap is $80 million for that year, an equivalent contract would be $13.8 million.
Age: 25 (September 14, 1989)
Draft Position: 30
2013-14 PER: 13.57
2013-14 ORPM: 0.90
2013-14 DRPM: 1.23
2015-16 Cap Hold: $5,021,870
Butler’s extension talks may be the most fascinating on the board. He is universally considered one of the league’s best defenders on the wing at either position. That is the principal source of his value, and is just about unquestioned among basketball cognoscenti.
Yet despite the fact he has featured prominently in nightly jokes about Tom Thibodeau’s minutes the last two years, we still do not know what he is offensively. Which of these two players is he?
In 2012-13, Butler shot 38.1 percent on 105 three point attempts, raising hopes that he could evolve into one of the league’s best three and D wings. Those subsided some a year ago. Butler upped his three-point attempt rate to 34.6 percent, but his percentage cratered to 28.3 percent on 240 attempts. Overall he was a ghastly 39.7 percent on field goals. His usage rate increased, but only to below-average 16.8 percent of the Bulls’ possessions. The only saving grace offensively was his gargantuan free throw rate, which allowed him to salvage 52 percent true shooting. This was a very disappointing performance offensively, and one that casts doubt on his ability to avoid being an offensive detriment in big minutes on the wing. That is exacerbated by the fact that he is not a natural ballhandler either, possessing little ability to create off the bounce in the pick-and-roll even on secondary action. The Bulls have devoted most of their resources to point guard and the frontcourt, while Doug McDermott (another non-driver) is the long-term three. Butler’s inability to handle is a structural concern for a squad that must improve its offense to get into championship contention.
But two major caveats apply: The first is that Butler really struggled with a toe injury that cost him 11 games in November and December. Afterward, he seemed to lack his signature lift and shot miserably from the field. The second is that the Bulls had perhaps the fewest shot-creators of any team in the NBA for much of the season. Butler’s open looks were few and far between, which should be far less of a problem on a Bulls team that will have much more firepower going forward.
It seems reasonable to conclude that Butler’s shooting will settle in at a level between his last two years. Recent research has shown that three-point shooting takes about 750 attempts to really stabilize, and Butler has less than half that amount so far in his career. Nevertheless, it seems likely he will always be a made rather than born shooter who is only going to take wide open attempts. The question is whether they go in. The league average on three-pointers is 36 percent, and it probably makes sense to project him a bit below that number at least over the next couple years.
Butler has helped his bid for an extension by coming into camp in phenomenal shape. The bounce has returned and he looks absolutely ripped. He’s been all over the floor in the preseason with steals, blocks, offensive rebounds and hard cuts to the basket off the Bulls’ post players. The only thing missing has been the three-pointer, although his midrange jumper has fallen at a solid rate.
So what is one of the best wing defenders in the league worth? Butler is not quite at the Tony Allen level where he can plausibly shut down a superstar like Kevin Durant for large portions of a game or series, but just about nobody is. Butler makes life as difficult on wings as just about anyone else.
Over the last five years when the cap remained relatively flat prior to this summer, the going rate to extend a rookie contract for a solid starter with upside on the wing has been around $10 million per season. Nicolas Batum (four years, $46.1 million), Danilo Gallinari (4/$44 million), DeMar DeRozan (4/$38 million) are three recent examples, although they were all a few years younger than Butler and thus had a bit more upside. Among free agents, Andre Iguodala signed for 4/$48 million as a 29 year-old in the summer of 2013.
Last summer though, the wing market exploded for even restricted free agents. Normally RFAs experience a chilling effect on offers due to the incumbent team’s ability to match, but the league’s desperation for wings fueled maximum offers for Chandler Parsons* and Gordon Hayward, both of which started at about $14.7 million.
Butler is by far the superior defender to either player, although he cannot compare to either with his playmaking. But if he continues to play as he has in the preseason offensively, or if he returns to 38 percent from beyond the arc on reasonable volume, it is conceivable he could receive a maximum offer sheet as well from a team desperate to upgrade its defense. The Bulls would also run the risk that he receives the now-famous Parsons offer, which could allow him to reach free agency again in two years or stick out a third-year player option. With Butler turning 26 years old next September, a chance to hit the market again before turning 28 could allow him another fat contract under the new TV deal. If he were a free agent right before turning 30, another big long-term contract would be far less likely.
On the other hand, this could be the year he cements himself as an unacceptably bad three-point shooter. That could cast doubt on his ability to be a starter on a championship-level offense.* Butler and his agent Happy Walters can still sell the possibility of an improvement from beyond the arc at this point. If he shoots poorly again this year, that may not fly.
The usual caveats about the security of an extension may apply even more to Butler, who has made comparatively little as the 30th pick in the 2011 draft and must survive another season in the Tom Thibodeau wing minutes meat grinder to get paid sans extension. But the Bulls also face risk if Butler blows up. They would be forced to match a maximum offer sheet for him, since they will be capped out with no way to replace him in free agency.
A maximum offer sheet also poses a particular risk to the Bulls since it could imperil their ability to sign free agents using the full $5.464 million mid-level exception (MLE) and $2.139 million bi-annual exception (BAE), especially should they wish to retain Mike Dunleavy.
If the Bulls have to match a max offer sheet to Butler, they will be only about $3 million short of the projected Apron, including Dunleavy’s cap hold. If they use either the MLE or BAE, they would be hard-capped at the Apron for the season. Even if they were to let Dunleavy go, they would have difficulty using both the full MLE and BAE while staying below the Apron.* They also might reenter the luxury tax, although after two years below it and a rising cap in the succeeding years the repeater tax would not be a concern. A maximum offer sheet for Butler could really crimp the Bulls’ 2015 offseason, and potentially their profits.
A compromise could be a four-year contract starting at $11-12 million per year for Butler. While this is potentially overpaying for Butler, it acknowledges his potential market value if he blows up while giving him security and allowing the Bulls to use the MLE and BAE in 2015. This compromise also acknowledges Butler’s leverage because the Bulls will have no way to replace him since they are capped out. Butler should have a relatively high floor considering his defense and the fact that his offense almost certainly will improve at least a bit from 2013-14, so they will still get quite a bit out of him even if he it not quite “worth” the money.
By percentage of the cap, this contract would be similar to those of Gallinari, Batum, DeRozan, and Iguodala in past years. And the Bulls would be about $7 million below the Apron even with Dunleavy’s cap hold, and by even more if he were to re-sign for less or be let go. This would allow far more flexibility in potentially using their full exceptions. A lower salary for Butler in the summer of 2016 could also allow the Bulls to open up maximum cap room with some maneuvering if they were to move on from Joakim Noah (extinguishing his likely $20 million cap hold) at that point, when he will be 32 years old.
Unfortunately, one other potential reason for delay looms—that of which Chicago fans must not think of, but management should. If Derrick Rose were to suffer another major injury this year, it would change the entire direction of the franchise. Counting on him would become foolhardy, and could require a total reload in advance of the summer of 2016. Rose will be on the books through 2017, but Pau Gasol, Taj Gibson, and Joakim Noah are all potential trade pieces in that scenario. If the Bulls are looking for major signings in the summer of 2016 or 2017, paying a lot for Butler could become a lot less palatable than when they projected to be capped out with this group for the foreseeable future while trying to contend. Getting more information about Rose and the ultimate direction of the franchise is a powerful reason to wait.
Despite the possibility of this doomsday scenario, the incentives seem aligned for a compromise in line with previous wing contracts given the significant risk to both sides from waiting.
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