Well, that didn’t take long. The market did not wait for LeBron James to make his decision. Deals flooded through on the opening night of free agency, beginning about an hour and a half before the midnight bell as the NBA’s tampering rules were essentially used as toilet paper by several teams. Teams are allowed to talk to their own players before the opening bell, since those players are still under contract with those teams until that time, but, as always, there were quite a few deals in which players changed teams reported within minutes of midnight, on both sides of the clock. Doug McDermott and Ersan Ilyasova both moved teams and had their full contract terms leaked before midnight, DeAndre Jordan took his talents to Dallas (for real this time!…probably), and four other deals were agreed and reported before the first hour of free agency was complete. It was a whirlwind night of player movement and contracts being handed out, with more than $725 million being committed to 20 players across the league.
Denver Nuggets bring back Jokic and Barton
We’ve known this was coming for about a week now, after the team made clear they were opting out of his $1.6 million team option for 2018-19 to give Nikola Jokic a maximum raise a year earlier than absolutely necessary. In exchange, he agreed to a straight five-year max with no player option on the final year. This contract has been in the works for more than a year – by the end of the 2016-17 season, Jokic was one of the best centers in the league and the plan was always for Denver to opt out and retain him in restricted free agency.
The Jokic news was quickly followed by Will Barton signing up for a four-year contract worth $54 million, with a player option on Year 4 for good measure. This one was not a given, nor was it particularly expected; Barton was going to have a market in free agency between Denver, Indiana, and the handful of teams who could offer their full mid-level exception, but the Nuggets never appeared to let his market develop, inking him to a deal worth at least $10 million more than the Pacers would have responsibly offered and almost $17 million more than the full mid-level exception. While a strong fit for Denver on the floor, the Nuggets certainly overpaid to keep Barton, whom they had few avenues to replace had he left in unrestricted free agency, and will be making other moves between now and February to shed major salary to lessen their tax bill.
With 14 players under contract, they currently have $145.8 million in salary committed and an astronomical $52.7 million tax bill ahead of them if they make no other moves this summer. Denver’s ownership group green-lit a tax bill for president of basketball operations Tim Connelly, but it’s impossible that they’re interested in having the second-largest total spend in the league, behind only the Oklahoma City Thunder. The other half of these deals will come sometime before the February trade deadline – the Nuggets have at least four contracts they’d love to dump on another team’s books and have the assets to get a deal done. Shedding Kenneth Faried and Darrell Arthur, for example, would save ownership more than $70 million in total salary and tax, but would only cost the incoming team the $21.2 million on those players’ contracts, creating a runway toward one of the more obvious salary dump trades this summer. Faried, Arthur, one of their young players, and a future first-rounder is a trade package that makes so much sense for a team like Atlanta, Chicago, or Sacramento that it would surprise me if we didn’t see a deal very similar to that come through in the next few weeks.
Oklahoma City breaks the bank for George and Grant
The years-long Paul George saga came to a swift conclusion. There were no other meetings, not even with his hometown Los Angeles Lakers. George walked into Russell Westbrook’s party a free agent and walked out with a commitment to the Thunder for at least the next three years, signing a four-year max contract with a player option on the final year. In the days leading up to July 1, it became clear that George was going to re-up with Oklahoma City, but in keeping with the trend of shattered expectations on the opening night of free agency, the years were a surprise to everybody outside of the Thunder organization (and probably some inside it!).
He had every option at his disposal in his negotiations with Sam Presti, but two of them looked particularly appetizing for George. Signing a 1+1 (a one-year contract with a one-year player option for a second season) with Oklahoma City would have given him a de-facto no-trade clause for the 2018-19 season and put him back on the market in 2019, when more teams are expected to have cap space and therefore giving him more choices for his next destination. If the prospect of another year full of questions about his future was unsatisfactory to him, he could have signed a 2+1 (a two-year contract with a one-year player option for a third year) that would have spit him back into free agency in 2020, which doubled as the year most of the league will get out of their 2016 contracts and the end of his tenth season in the league, opening up the opportunity for him to sign the largest possible max contract, projected to begin at $40.6 million and stretch to $235.5 million over five years (if he stayed in Oklahoma City) or $181.9 million over four years (if he chose a new team). To say the 3+1 was a strange choice would dramatically understate it, but it’s clear that the culture Presti and Russell Westbrook have built in Oklahoma City had its desired effect on George. For the Thunder, who have had some high-profile failures in retaining their superstars over the last six years, George’s commitment is a massive feather in Presti’s cap.
Jerami Grant’s new deal wasn’t nearly as publicized as George’s, but the fourth-year forward finally got his much-deserved payday – he’ll make almost twice as much in the first year of his three-year, $27 million contract than he made in his first four years in Philadelphia and Oklahoma City. Grant’s defensive versatility and still-growing offensive game are paramount to the Thunder’s future playoff success, as Presti and his staff will look to fill in their roster around Westbrook and George with shooters and defenders. Grant is very much the latter without much of the former, but his ability to guard both forward positions and even play small-ball center affords head coach Billy Donovan the opportunity to play him in many different configurations.
It’s impossible to talk about the Thunder without addressing their mind-boggling luxury tax bill. A repeater tax team for the first time in their history, Oklahoma City is currently slated to pay $129.0 million in luxury tax penalties alone. As we sit here on the morning of July 1, the Thunder’s abhorrent luxury tax bill is higher than 26 of the other 29 teams’ team salaries, and that’s just the check they’ll have to cut to the league; they still have $156.0 million going out to the 11 players on their roster that creates that $129.0 million tax bill. To state what should be obvious by this point, the Thunder’s total team spend of $285.0 million would absolutely shatter the league record.
Unlike Denver, there isn’t a clear way out of their tax bill for Oklahoma City. Carmelo Anthony’s deal looms large, but finding a trade partner for that much money is going to be very difficult in this year’s cap environment. A buyout seems like the most likely outcome at this point, though Presti will certainly be working the phones to find a new home for Anthony before commencing those negotiations. The numbers are numbing – cutting Anthony’s entire $27.9 million salary out of their cap sheet would save ownership a grand total of $145.7 million in salary and tax. Any amount Anthony gives back in a buyout would be multiplied roughly six-fold in terms of salary and luxury tax saved for Oklahoma City, but he’s under no obligation to give a dollar back. While he could surely get a contract with another NBA team to make back that money, the Thunder are in a much weaker negotiating position than Anthony.
A more realistic path might be to find a trade partner for Kyle Singler, who is slated to make just south of $5 million this season on what is essentially an expiring contract (his contract is non-guaranteed for 2019-20 and he’ll absolutely be cut before then). Even ridding themselves of Singler’s $5.0 million would save them a gargantuan amount of money; trading him into another team’s cap space with no returning salary would push their total team spend down by more than $32 million. Stretching him would also do the trick – spreading his $5.0 million over five years would cut more than $26 million off their bill for 2018-19.
Filling out their roster is only going to add to their tax bill. With only 11 players under contract, they have their full mini mid-level ($5.3 million) and minimums to make additions on the fringes of the rotation. Oklahoma City still needs a quality option at backup point guard, whether that’s another minimum contract for Raymond Felton or another player on the market. It’s hard to think that ownership will sign off on Presti using the mini mid-level, but they’re so deep in the hole at this point, what’s another $37.4 million in player salary and luxury tax at this point?
Oklahoma City is all-in with chips we didn’t even know they had and it’s not obvious how much money they’ll be able to shed between now and the end of the regular season, at which point the luxury tax bills are calculated each year. Whether it’s a buyout for Anthony, a Singler trade, or another move, the Thunder are flirting with NBA history in a way that will hurt owner Clay Bennett’s wallet in a huge way. It’s worth it if they win, but if they don’t, there will be fireworks in Oklahoma City this time next year.