While there is zero doubt where LeBron James will be playing next season, there is a reason he has taken so long to re-sign with the Cavaliers.
The NBA Finals MVP returned to Cleveland two years ago, which means the Cavaliers have his Early Bird rights. With Early Bird, a franchise can give a player up to 175% of his previous salary (or the estimated average player salary, whichever is greater) and up to four seasons with the higher 7.5% raises. This summer, teams used Early Bird rights to re-sign Marvin Williams (Hornets) and Lance Thomas (Knicks), among others.
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However, Early Bird has two weaknesses that make it less helpful to James and the Cavs. First, an Early Bird contract cannot be for a single season and option years do not count, so there is no way for James to sign an Early Bird contract and be a free agent next summer. Second, the big five-year max contract is unavailable for Early Bird, so James gets fewer years locked in.
Even though he has moved past it by accruing enough time for Early Bird, James could come back to Cleveland with Non-Bird rights typically used by player with one year of service on a team. This allows him to have the familiar "1+1" structure of one season plus a player option James has used since returning to Cleveland in 2014. Because James wants to maintain leverage and because the Cavaliers will gain Full Bird rights and be allowed to sign him to a true maximum deal next summer, that flexibility is crucial.
What makes the situation different this year is that the cap jumped significantly since last season. Non-Bird rights only allow for a player to make 120% of his prior season’s salary, which would be $27,564,600 for James. The maximum for a player with ten or more years of NBA experience this season is $30,963,450, so he would be leaving about $3.4 million on the table by signing a 1+1. It would be a one-time sacrifice, but that is still a substantial sum of money.
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Waiting until 2017-18 to sign his long-term deal could have major advantages beyond Bird rights. Maximum salaries will be even higher because of the larger salary cap, which is now projected to reach $102 million. That would give James a $33.5 million first-year contract if the system remains the same.
However, it probably will not. The NBA almost certainly will be working under a new collective bargaining agreement next offseason. That means everything is subject to negotiation and modification, including the max contract structure. One of the ways the league could choose to curtail future super teams would be to raise maximum salaries — or to remove the cap on max contracts entirely. A jump from 35 percent to 40 percent under the current cap projection would change James’ projected starting salary to $38.3 million.
It is also important to note that James is a vice president of the National Basketball Players Association. Furthermore, his friend and fellow aging superstar and 2017 free agent Chris Paul is the president of the union. Those two have strong reasons to push for bigger maximum contracts as well as the end of the over-36 rule , which penalizes teams in terms of salary cap space when they sign players to long contracts that will go past their 36th birthdays as a way of keeping post-retirement pay in check. James and Paul can point to Dirk Nowitzki, Tim Duncan and Kevin Garnett as examples of superstars playing past their 36th birthdays. Expect the over-36 rule to be shifted to over-38 or erased entirely in the next CBA.
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For those reasons, the choice James makes this summer — whenever it is made — could signal his confidence in the future of the salary cap. Or he could simply be recognizing that he has no reason to rush.