Russell Westbrook is joining James Harden again — not on the same team, but as NBA trend-setters. With the Thunder point guard agreeing to sign a renegotiated contract extension, he joined his former teammate in taking this unusual measure for superstar players.
When the owners and players agreed to the NBA’s current collective bargaining agreement in 2011, one of the significant effects was making veteran extensions much less appealing. The result was that more of the league’s biggest stars have hit unrestricted free agency (including their former Thunder teammate, Kevin Durant), with the side effect of ratcheting up uncertainty for players and teams alike. However, Harden and Westbrook’s recent renegotiations and extensions provided an early glimpse into what could become a growing trend around the league.
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Restrictive rules on eligibility, salary raises and contract length made these kinds of extensions impractical for years. However, this shift — as with seemingly all others this offseason — is tied directly into the rapidly rising salary cap.
The only reason a player would want to renegotiate before hitting free agency is to increase his salary for seasons where he is already under contract. Harden and Westbrook took significant pay leaps for the 2016-17 season by renegotiating, but that raise has to come from cap space. The Rockets had the $10 million in available space to give Harden his raise. In exchange, Harden committed to delaying his first foray into unrestricted free agency. It should also be noted that players who agree to renegotiations cannot be traded for six months, but either Westbrook or Harden could finish this season in a new uniform on their richer contract if moved before the February trade deadline.
As a result, the only players likely to want renegotiated extensions are on teams with enough cap space to give reasonable raises. The other constraint is that players are only available for these deals if they currently are three years into a contract of four or more seasons, not including option years. Those limitations rule out players such as the Raptors’ Kyle Lowry because his fourth season is an option — and now his team does not have enough money anyway.
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Those constraints winnow the field of players and teams who could sign renegotiated extensions. Only two teams have the combination of cap space and the players on current contracts to make these moves viable: the Pacers and Jazz.
Indiana Pacers
The Pacers reinvented themselves this offseason and have clear priorities for the future. That starts with keeping their only All-Star for as long as possible.
Small forward Paul George
Remaining contract: two years, $37.8 million plus $20.7 million player option for third year
Eligible for extension: Sept. 25
Like Harden, George has two more years on his contract, but George also has a 2018-19 player option on top of it. Since his contract runs four seasons even if he declines the option, George is eligible. Doing a renegotiation and extension this year could give Indiana’s best player an $8 million raise in each of the next two seasons in exchange for one or two additional seasons of commitment. If the Pacers retain cap space for next summer, they could do so then with an even higher max salary but George could see unrestricted free agency on the immediate horizon and choose that instead. In this scenario, the Pacers could give George enough money now to convince him to simply lock in his 2018-19 commitment, if both sides want that.
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Point guard Jeff Teague
Remaining contract: one year, $8.8 million
Eligible for extension: now
After swapping one Indianapolis-native point guard for another, the Pacers have the opportunity to avoid a tough free agent negotiation with 28 year-old Teague. A deal could get done at less than Teague’s maximum, especially since that would include a substantial raise on his current salary. Unfortunately, Indiana used a fair amount of its 2016 cap space, and building off a $15 million starting salary might not be enough for Teague considering the leverage he will have next summer.
Utah Jazz
Gordon Hayward’s player option for 2017-18 makes him ineligible, but the Jazz do have a chance to lock up the only other two members of their primary rotation who can leave in the near future.
Power forward Derrick Favors
Remaining contract: two years, $23 million
Eligible for extension: Oct. 19
Outside of Harden, Favors may be the most logical choice for a renegotiation and extension in 2016. Favors fits the bill because he can get a significant raise on his comparatively paltry $11.5 million average salary over the next two seasons and help balance out the Jazz’ books since he would get a higher maximum salary by waiting, compounding the raises Rudy Gobert and likely Hayward lock in next summer. Elevating Favors to his maximum — which would be his value on the open market — would almost double his salary for the next two years and add either one season at about $25.4 million or two for a combined $52.5 million.
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Point guard George Hill
Remaining contract: one year, $8 million
Eligible for extension: now
The Jazz and Hill are in a complicated spot because he is just joining the team and they only have enough cap space remaining to strike a deal with either Hill or Favors. Utah may also want to evaluate a returning Dante Exum before making a decision on Hill, which could increase his leverage depending on how everything transpires. Similar to Teague, Hill likely is not worth a maximum salary, but there will be franchises with available starting spots and cap space next summer, which the Jazz cannot guarantee at this moment. If Utah keeps its cap flexibility into the season, the Hill/Favors renegotiation and extension possibility could extend, especially since waiting until Jan. 7 (six months after trading for him) would open up more flexibility to strike a deal with Hill.