The NBA focuses on the present for much of October because it begins with training camp and the preseason followed by the final roster cuts and the start of the regular season. At the same time, front offices have some key decisions to make for the future thanks to some of the key dates and details in the collective bargaining agreement.
It is worth analyzing these deadlines with an eye for the specifically interesting decisions for 2023 while also understanding that the same basic structure applies each season and will likely continue long into the future.
Start of regular season
Non-expiring veteran extension deadline
Owners and players have consistently maintained a restriction that players with more than one year remaining on their contracts cannot negotiate or agree to extensions from the start of the regular season until the league year turns over the following July. One of the motivations there is to narrow the possible discussions general managers need to have while games that count are going on, but deadlines also can motivate action as they force both sides to lay their cards on the table.
For high-end players, one challenge is that the CBA restricts the length of veteran extensions for everyone but designated veteran-eligible players to five seasons, but that counts any years remaining on their current deal.
Let’s use the case of Donovan Mitchell. Even if he were interested in re-upping with the Cavaliers, waiting until July 2024 would allow him to sign for four new seasons and a projected $209.9 million rather than $151.8 million over three new seasons. Extending now mitigates risk, but Mitchell may feel that adding an extra year and wielding more control over his future is more valuable than that, especially since he is ineligible for a designated veteran extension or contract, having been traded by the Jazz while on his second deal.
One important note: There is a nuanced situation when it comes to players with options for the 2024-25 season. The basic rule is that only players with expiring contracts can negotiate extensions with their teams in-season, but the CBA permits option decisions (player or team) to happen ahead of their deadline, so assuming the player is extension-eligible based on the other criteria such as contract length and time since signing their last deal, the sides are allowed to make the player have an expiring contract by declining that option then ink a new extension, typically in one fell swoop. This will be worth watching for Jrue Holiday and the Celtics and potentially Clippers stars Kawhi Leonard and Paul George, though their situation may take until next summer to clarify.
Rookie-scale extension deadline
For years now, first-round picks on their first NBA contracts have existed with their set of rules. They have more rigidly set contracts with the rookie scale that functionally dictate what they will make in their first four seasons. They also set contract structures with two fully guaranteed seasons followed by two team options that must be decided in advance (more on that shortly).
One of the final ways these first-rounders differ from their colleagues is when they are allowed to sign extensions. While most players on expiring contracts can negotiate until the league year turns over on July 1 of the next year, the window for rookie-scale players ends on the first day of the regular season going into their fourth year.
That ticking clock puts pressure on both sides because without an agreement the players will hit free agency the following summer, though the team gets to decide whether the player is restricted or unrestricted through their ability to make a qualifying offer. (Note: The amount of a draft pick’s qualifying offer depends on multiple factors including draft position and playing time.) It has overwhelmingly been the case that the top third-year standouts agree to contracts, often with designated rookie language (sometimes known as the Derrick Rose rule) that can push the contract value up to 30 percent of the salary cap if they hit benchmarks like making an All-NBA team, but other situations are far less cut and dry.
Troy Weaver has two fascinating situations with extension negotiations because 2020 lottery picks James Wiseman and Killian Hayes have not lived up to expectations in their first three seasons and also appear to have uncertain roles for this season. Weaver could try to secure a bargain by offering a lower deal now if the players are interested, but committing now also shifts significant risk from the player to the team, and the Pistons could be looking at $30 million to $60 million in cap space next summer depending on the resolution with those two and other pending free agents.
One major factor that ends up shaping these negotiations is that teams are not truly risking the players leaving via unrestricted free agency because they can make a qualifying offer the following summer. This makes it very different from what the Dallas Mavericks went through with second-round pick Jalen Brunson in the 2022 offseason.
For first-round picks, the player’s next contract may be significantly more lucrative if they have a strong season (think Rui Hachimura this season). But in many ways, that is a good problem to have since they earned that through strong play while there is plenty of downside risk in overcommitting a year ahead. For instance, even though I supported it at the time, the Golden State Warriors ended up in a more complicated situation with Jordan Poole than they would have had they not committed to four new seasons and $140 million a year early.
For this fall, the remaining extension negotiations I am watching most closely are Dallas’ Josh Green, Indiana’s Obi Toppin and Atlanta’s Saddiq Bey because each looks to have a significant role this season and that can be a path to a larger payday the following summer, potentially pushing their teams to make a stronger offer now in case this is their breakout year.
The difference between what those three players are willing to accept now and could sign for next July as restricted free agents matters even more for the three franchises in question because I project the Pacers will wield cap space next summer while the Mavericks and Hawks have financial challenges that make securing their young talent on team-friendly deals even more important.
Halloween
Rookie-scale option deadline
The NBA has a spooky season, but it only matters to a narrow group of players.
As discussed above, different rules apply to recent first-round picks, including a set and artificially limited rookie scale. One benefit these young players get is that the team options for the third and fourth seasons must be decided almost a year in advance with a deadline of Halloween each season. That means teams must decide on those third-year options early in the player’s second season and fourth-year options early in their third season. The combination of a typically team-friendly rookie scale and the optimism that even disappointing young players will turn it around leads to few of these options getting declined, but it does happen, and doing so has dramatic consequences.
Declining a rookie-scale option guarantees that the player will become an unrestricted free agent the next summer, so they can leave of their own volition without compensation. The even more fascinating consequence is that to prevent a loophole that would open the door for teams to give high-achieving players a raise earlier in their careers, the team that holds a player’s rights at the end of the season in question cannot sign the player to a new contract with a salary above the declined option, but that restriction only applies to them.
Now, it is understandably rare for a prospect to perform poorly enough that they will get lucrative offers elsewhere after that season, but it is entirely possible. The embarrassment of admitting failure and potentially losing a talented young player for nothing often leads to front offices picking up those options.
Notably, there are some significant examples of players having rookie-scale options declined and making an impact in the league. In 2017, the Warriors declined their fourth-year option on Kevon Looney but eventually retained him, and the three-time NBA champion has started 220 regular-season games for the franchise in his eight seasons. The Pacers’ Jalen Smith and Philadelphia 76ers’ Furkan Korkmaz have both found success after declining options as well.
The 2021 draft class has already seen a shocking four declined options (Joshua Primo, Usman Garuba, Josh Christopher and Kai Jones), and there could be more before the deadline with the two most compelling remaining decisions being James Bouknight on the Charlotte Hornets and Keon Johnson on the Phoenix Suns.
It is natural and appropriate to turn our focus to the action on the court as games that count finally return, but these October extensions and option decisions are looming large in front offices right now and will have ripple effects for years to come.
(Photo by Nic Antaya / Getty Images)
