Analysis: Eric Bledsoe extends with Milwaukee

UPDATE 3/4/2019: Per reporting from The Athletic’s Shams Charania, Bledsoe’s contract is only guaranteed for $3.9 million in the final year of the extension and is likely to include maximum 8 percent raises throughout the deal, as the final year is slated to pay him $19.375 million. Milwaukee going with maximum raises opens up a little less than $2 million in additional luxury tax space this summer, which will make it slightly easier for them to bring back Middleton, Mirotic, Brogdon, and Lopez without triggering the tax.

About an hour and a half after reporting emerged that they were adding Pau Gasol to their playoff roster via the buyout market, the Milwaukee Bucks dropped another bombshell: Eric Bledsoe, who would have been an unrestricted free agent for the first time in his career this summer, agreed to forgo that opportunity to stick around in Milwaukee for another four years, adding another $70 million to his career earnings.

His previous contract, signed with the Phoenix Suns in September 2014, was set to conclude with this year’s $15 million salary, but after spending nearly two full seasons with the Bucks, both player and team were able to come to terms on the extension. The No. 18 pick in the 2010 NBA Draft has enjoyed the best year of his career in Milwaukee in 2018-19 as the team has soared to new heights under the continued development of MVP front-runner Giannis Antetokounmpo and the stewardship of head coach Mike Budenholzer.

As of this writing, there are no specific terms on the extension, though his 2019-20 salary will have to be between $15.6 million, the minimum allowable amount for him to still get the full $70 million over four years, and $18 million, his maximum allowable first-year salary in an extension. How the Bucks and Bledsoe decide to structure his salary will be very interesting – is the team willing to front-load the deal as much as possible in order to give themselves less below-the-tax flexibility but make the deal more tradeable in the later years, or will they maximize his annual raises and maximize their upcoming summer? For now, the assumption is that the contract will be a flat $17.5 million each season, though there are significant luxury tax incentives for Milwaukee to back-load his salary onto future years.

Assuming Bledsoe’s salary does come out flat, the Bucks will have $74.4 million in salary on their books going into the 2019 offseason, which includes Giannis Antetokounmpo, Bledsoe, Tony Snell, Ersan Ilyasova, DJ Wilson, Donte DiVincenzo, their 2019 first-round pick (#30), and dead money for George Hill, Spencer Hawes, and Larry Sanders. Given a projected luxury tax line of $132 million, that puts them $57.6 million below the tax with a quartet of key free agents unsigned: Khris Middleton, Nikola Mirotic, Brook Lopez, and Malcolm Brogdon.

Middleton’s max starts out at $32.7 million, cutting a significant chunk out of that $57.6 million below-tax number. That full max would leave them roughly $25 million to split between Mirotic, Brogdon, and Lopez, with the added restriction that Lopez can’t make more than the $9.2 million non-taxpayer mid-level exception in Milwaukee, assuming the Bucks stay over the cap throughout the summer, which isn’t a foregone conclusion at this point but is more likely after this extension. Since they signed him for just $3.4 million last summer, his Non-Bird rights are essentially useless, as they can only retain him for up to $4.06 million on the Non-Bird Exception. He’s far outplayed that paltry sum this season and it’s not even clear that a starting salary of $9.2 million would be enough to keep him around. A high-volume, deep-range three-point shooter who can also protect the rim at an elite level from the center position is a very valuable commodity in today’s NBA and Lopez should have significant interest throughout the league this summer.

As for Mirotic and Brogdon, Milwaukee will retain their full Bird rights, allowing them to bring those guys back for any number upon which they can agree (up to their respective maxes, of course). Brogdon will also be a restricted free agent this summer, and with Bledsoe clearly ahead of him on the point guard depth chart for the foreseeable future, his contract might get squeezed even tighter than it would have been otherwise. There was a line of thinking that Brogdon could be elevated into the starting point guard role if Bledsoe were to leave in free agency this summer, but now that door has been slammed shut.

There are a lot of moving parts for the Bucks this summer, who will likely do their best to stay under the luxury tax this summer in advance of some very expensive seasons to follow – Antetokounmpo’s supermax will begin in 2021-22, should he stick around, Middleton’s new max (or close to it) contract this summer will have only increased by then, and Bledsoe will still be on the books for somewhere in the neighborhood of $17.5 million. The good news for Milwaukee is that they’re clean outside of that – Snell’s contract ends just as Antetokounmpo’s supermax begins, and Ilyasova will come off the books before then as well. They don’t necessarily have to remain under the tax next season if they don’t want to, but it would put pressure on them to get under the tax twice in the next three years in order to evade the punitive repeater tax as early as 2022-23.

From Bledsoe’s perspective, this is a hedge against any injury risk throughout the rest of this season as well as the inherent risk of going into the summer without a contract. The allure of free agency can be strong, but Bledsoe’s found a place where he’s happy to continue playing and can lock in a second consecutive $70 million contract. It’s unlikely that he would have been able to find the same combination of happiness and money with another organization and given his particular history, it’s not hard to imagine that he was willing to take some of his potential earnings off the table in order to remain with the Bucks. There’s a lot of money out there in free agency this summer and fewer elite free agents than slots available, so there’s a risk that he left significant money on the table, but at a certain point, his own non-financial priorities take precedent.

Something else that’s interesting to watch with this extension: Bledsoe is represented by Rich Paul and Klutch Sports, and it was reported before the deadline that Milwaukee was interested in Anthony Davis, another Paul client who will almost certainly be moved this summer. Bledsoe’s happiness in Milwaukee certainly won’t go unseen by Davis. Should the Bucks retain Mirotic this summer, that would give Davis another friend in Milwaukee (the two were close during their time together in New Orleans). Add in the fact that they would be immediate contenders for a championship – title favorites if things break right with respect to the Golden State Warriors – and perhaps Milwaukee would be bullish on their chances of re-signing Davis in 2020.