Kevin Durant only signed up for one year. The Warriors’ new superstar went for a one-year, $26,540,100 contract with a player option for a second season, which he undoubtably will not use.
That means Golden State will need to re-sign Durant next summer, with Stephen Curry and most of the Warriors’ role players also hitting free agency. As a result, the new estimates that the 2017-18 salary cap will be $5 million less than originally projected seem like a very bad thing for the Warriors. That may not be the case, though, if the Warriors and Durant play their cards right.
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(One note at the outset: The NBA’s collective bargaining agreement likely will be reworked at some point over the next year. That could change some of the structures that would affect these numbers and thus Kevin Durant’s decision next year. This piece uses the figures and calculations with the current rules since any specific changes are impossible to predict this far out.)
Under the current system, there are three ways Durant could be a part of the Warriors for the 2017-18 season: picking up his player option, re-signing using Non-Bird rights or signing using cap space.
His player option is both the simplest and least likely outcome. Since the Warriors could only give him a 4.5 percent raise in Year Two, Durant’s option will be worth $27,734,405. That is a lower salary with less flexibility than any other path to staying with or leaving the Warriors, so Durant will decline.
Non-Bird rights are part of the NBA’s Bird rights, which are exceptions to the salary cap designed to keep teams together. Full Bird rights, gained after a player has spent three seasons with his team, allow a team to re-sign a player at any price regardless of available cap space. Non-Bird rights, though, only allow a 20 percent raise on the previous year’s salary and the same limited four-year contract with 4.5 percent annual raises that a team can use on a new free agent.
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That does not mean a ton for a Non-Bird player with a low prior salary like Ian Clark or even Deron Williams (who re-signed using cap space instead of Non-Bird this summer) but makes a huge difference for Durant. He could get a starting salary of $31,848,120 through his non-Bird rights. LeBron James used this track last summer a year after he returned to Cleveland.
Finally, Durant could sign using cap space. If he wants his maximum salary for 2017-18, this would be the only realistic way to do it. However, the downshift in the projected salary cap has a direct impact on maximum salaries since one calculates off the other. At the lowered projection, my estimate for the maximum first year of a contract for a player with 10 NBA seasons is about $33.55 million. Since Durant is only eligible for Non-Bird, tthe maximum annual raises (4.5%) and years (four) are the same as with Non-Bird contracts.
The significant cap reduction lowered the Warriors’ cap flexibility while also dramatically narrowing the margin between Durant’s Non-Bird wage and his maximum. (The 20 percent Non-Bird bump does not change with the salary cap.) Instead of a $3.34 million difference under the prior estimate, Durant would only leave about $1.7 million on the table by signing as a Non-Bird free agent, if the new estimate holds. On top of that, Durant would be wise to wait at least one more season to sign a long-term deal (since the Warriors would then have Early Bird rights and could offer higher 7.5% raises), so that sacrifice would not be compounded over multiple years the way James, Dwyane Wade and Chris Bosh did in 2010.
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Choosing Non-Bird over cap space would have massive benefits for the Warriors. They would not have to clear space for Durant at all and could function as an over the cap team, so they could keep substantial cap holds for unrestricted free agents Andre Iguodala and Shaun Livingston — meaning they could afford to keep them without paycuts and even give them raises if Warriors owner Joe Lacob is willing to deal with an even steeper luxury tax bill.
Additionally, staying over the cap line would allow the Warriors to use the larger taxpayer mid-level exception, worth $3,581,000 in 2017-18 instead of the $2,985,000 room mid-level exception. The taxpayer MLE can also be used to sign three-year contracts while the Room MLE has a two-year limit. (Since the Warriors finally have to pay Curry more than $12 million, as well, they will be going deep into the luxury tax, so they will not be able to use the even larger Non-Taxpayer Mid-Level Exception or the Bi-Annual Exception.)
Retaining Iguodala and Livingston — whom the Warriors kept this summer by letting Harrison Barnes, Andrew Bogut and Festus Ezeli walk — without issue should be more than enough reason for Durant to leave that $1.7 million on the table. That is a much easier ask than the $3.34 million it would have been under the prior estimate.
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Of course, Durant forcing the issue would create a much more challenging decision for the Warriors or a real sacrifice from Livingston, Iguodala or both. That possibility cannot be discounted, especially if the disparity between Non-Bird and his maximum rises between now and July 1, 2017.
While the rules could and very likely will change between now and then, the already-charmed Warriors could somehow benefit from a seemingly devastating development.