Analysis: O’Neale extends in Utah

The trade deadline is upon us, but a different sort of transaction news came down on Sunday morning: Royce O’Neale and the Utah Jazz have agreed to a four-year extension worth $36 million. As of this writing, there are no specific details on how the contract is structured, how much of that $36 million is guaranteed, and whether either side holds any options on the final year of the deal. Regardless, O’Neale will not hit free agency this summer, when he was scheduled to become a restricted free agent and he’s locked in for the next four years at a team-friendly number for what he brings to the table on both ends of the floor.

O’Neale is the quintessential example of a 3-and-D wing, which still has a lot of value despite the league’s overall move toward more versatile perimeter players. He’s not a creator with the ball in his hands for himself or anybody else, but his constantly-rising three-point percentage (36, 39, and 44 percent in his three years in the NBA) on the same per 100 volume each year makes him a significant spot-up threat in Utah’s offense. The Jazz gave him more leeway to work on other parts of his game early in his career, but as he’s settled into his spot-up role, he’s excelled in it.

That lack of offensive versatility severely limits his upside, which is why he’s signing an extension for $9 million a year instead of $19 million. He has the lowest usage in the league among qualifying players, as it’s immensely easy to take away the only thing he does well on that end of the floor. Still, forcing the defense to station a defender right next to O’Neale on the perimeter opens up the rest of the Jazz offense – Utah’s offensive output drops 10 points per 100 possessions when he leaves the floor. Even controlling for when he plays with Utah’s best players, his impact on the Jazz offense is clear: when Donovan Mitchell, Joe Ingles, Bojan Bogdanovic, and Rudy Gobert play with any fifth player other than O’Neale, their offensive rating is a league-average 110.83, in 314 offensive possessions. When O’Neale is that fifth guy, their offense jumps through the roof, all the way to 123.81, in 756 offensive possessions. These samples aren’t massive and severely overrate his actual impact on a 13-point jump in offensive rating with Utah’s core guys on the floor with him, but he’s been a positive throughout his career on offense, even with a very limited skillset.

Defense is where O’Neale provides the vast majority of his value. He’s been a consistent positive on the wing for an elite Jazz defense over the last few years, with the all-in-one defensive metrics grading him out quite favorably. Even without Gobert on the floor, the Jazz have posted a 105.47 defensive rating over the last three years when O’Neale is out there.

The only limiting factor for him on that end is that he’s not quite big enough to be a true forward-stopper – standing 6’6 with a 6’10 wingspan and weighing in at about 220 pounds, he comes up just a little small against the LeBrons, Kawhis, and Giannises of the world. If he were 6’8 and 245 pounds, even with his exact same offensive skillset, I imagine he’d earn somewhere in the $13-15 million range, though there aren’t many examples of players with his limited offense and strong positive defense at the forward spot. OG Anunoby’s restricted free agency in 2021 (if he makes it that far, as he’ll be extension eligible this summer) will be an interesting test case, though Anunoby is both better than O’Neale defensively and has a more versatile offensive skillset as a spot-up driver and decision maker.

Utah was always going to be an over-the-cap team this summer, particularly with the near certainty that Mike Conley will not exercise his early termination option and stay under contract for 2020-21. Before the O’Neale extension, I had projected them at about $33.75 million below the tax for next year, including keeping Georges Niang, Nigel Williams-Goss, and Miye Oni on their non-guaranteed contracts and cutting Juwan Morgan and Rayjon Tucker loose. Depending on where O’Neale’s extension starts (it can be anywhere from $8.04 million to $10.23 million, assuming the total is exactly $36 million) and the non-guarantee decisions they have to make, Utah can have anywhere between $20.82 million and $28.75 million in space below the projected luxury tax threshold for 2020-21. They’ll also have a first-round pick who will cut out somewhere between $2.5 million and $3.0 million of those amounts.

Regardless, they’ll have plenty of spending power to add to their team this summer without triggering the tax, which would lead me to speculate that O’Neale’s contract will descend each year, rather than starting at the lowest possible value and rise from there. Even with O’Neale at his highest possible number, the Jazz will be far enough below the tax to use their full non-taxpayer mid-level exception and perhaps even retain Jordan Clarkson on a free agent deal that is closer to his actual value.

In 2021-22, things might get somewhat difficult for Utah. Both Gobert and Mitchell will be starting new contracts at that point, with Gobert eligible for the full 35 percent max on a Designated Veteran Player Extension that he can sign as early as July 1, 2020. Mitchell can sign his own Rookie Scale Extension this summer as well, which will take effect for the 2021-22 season and could start as high as $37.5 million, if he qualifies for and negotiates a Rose Rule extension for 30 percent of the cap. Add in Joe Ingles on $13.1 million (he added that year to his contract just before the season started), Bogdanovic at $17 million, and O’Neale in the $9 million range and the Jazz have quite a lot of money already accounted for with just those five guys. They still should have room to add their first-round picks and use their mid-levels over the next two years, but it could get close, particularly if both Mitchell and Gobert are fully maxed out by that point.

The 2020 free agent class takes a hit with O’Neale removed from the list of upcoming free agents, but there are still a number of borderline starters available this summer. Kent Bazemore, Kentavious Caldwell-Pope (player option), Justin Holiday, Reggie Bullock (non-guaranteed), Juancho Hernangomez (RFA), Malik Beasley (RFA), Torrey Craig (RFA), Dillon Brooks (RFA), Kenrich Williams (RFA), and Hamidou Diallo (team option) are all players who will be very interested in the details of O’Neale’s contract as they approach their own free agency in a few months.

O’Neale taking slightly less than the full mid-level will certainly affect these players’ mentalities as they approach free agency, but he also avoids the risk that his play severely lessens his value over the next few months, as well as the general theme that restricted free agents can sometimes be left out in the cold, particularly those with poor counting stats.

All in all, O’Neale’s deal is a positive for both sides. He hadn’t made that much money in his career to this point, so locking in $36 million (pending his actual guarantees) will change his life and his family’s lives forever. Utah got really good value for a 3-and-D wing who can be part of their closing five in a playoff game and won’t hurt them on either end of the floor in that spot. Further details might change this assessment somewhat, but even at $36 million fully guaranteed, the Jazz locked up a productive wing who can translate well to the playoffs for the rest of his prime and will continue to build the team with O’Neale locked in place.