NBA executives discuss extension talks: 'There is fear on both sides'

https://hoopshype.com/2019/10/08/nba-executives-extension-talks-negotiations-sign-free-agency-restricted-agents-rumors/



NBA executives discuss extension talks: 'There is fear on both sides'



By: Alex Kennedy | October 8, 2019



Former first-round picks who are entering their third season in the NBA are eligible to sign a rookie-scale extension, but they must do so before the league’s Oct. 21 deadline. So far, Ben Simmons (five years, $170 million), Jamal Murray (five years, $170 million) and Caris LeVert (three years, $52.5 million) are the only players from the 2016 draft class who have received a rookie-scale extension.

In order to get a better understanding of the tough decisions that front offices must make when it comes time to potentially extend a player, HoopsHype talked to a handful of NBA executives about what happens behind-the-scenes during extension talks.

The executives spoke on the condition of anonymity because they shared sensitive information (and many of the executives aren’t allowed to give on-the-record interviews).


HOW TEAMS DECIDE WHETHER TO EXTEND

Eastern Conference GM: “Extensions are usually team-friendly – or it’s a great player who is just a no-brainer to extend – whereas in restricted free agency, players can sometimes get a deal above market value or get more than they’re worth and then the team has to make a tough decision about whether to match the offer or not. If you’re worried a guy will get overpaid in restricted free agency, you really want to get an extension done.”

Former Western Conference GM: “I consider a number of factors. Does the player have an impact on winning? Is he a great fit for our team’s culture? Does he still have room for growth? And could he be the best player on a championship-caliber team? Those things are very important.”

Eastern Conference executive: “If I was running my own team, I would force players to play it out and not extend most players. In some situations, keeping their cap holds is so much more beneficial. You should only extend if you get a below-market-value deal or if it’s a no-brainer extension.”

Former Western Conference GM: “If I know I’m going to max the player, why not see how he plays this year and then just give him the max next summer? He’d have a small cap hold instead of the max salary, giving us more flexibility moving forward too. That’s my view on it.”

Western Conference executive: “Some teams would rather have their player hit restricted free agency, but that comes with its own set of issues sometimes. Restricted free agency is a blessing and a curse. While you won’t lose your guy (because you can match the offer sheet), it can create bad feelings. There can be tension between the team and the player.”

Eastern Conference executive: “You have to consider the market and free-agent class when making these decisions. For example, if you look at the market next summer, there are a few teams that will have cap space and there isn’t much of a free-agent class. There’s a big incentive for a lot of these guys [who are up for extensions] like Pascal Siakam, Jaylen Brown and Buddy Hield to wait because the 2020 free-agent class is pretty weak, so it’s possible that they could play their way into a max contract or near-max contract. If Siakam waits and plays well, he could potentially be the top free agent available next summer. Brown is about to have an increased role in Boston, so the same thing applies for him; he could play his way into a max contract. They’d only need to win over one team with a lot of cap space. And, historically, when teams have cap space, they’ll spend it – even if the free-agent class is weak.”


There are some things that are out of the player’s control that can impact the extension talks.

Eastern Conference GM: “When a player is new to a team, an extension is unlikely. For example, I’d be surprised if Brandon Ingram gets an extension before the deadline in October. Out of all these guys we’re discussing like Pascal Siakam, Jaylen Brown, Buddy Hield and Brandon Ingram, I’d be the most surprised if Ingram gets something done, just because he’s new there. Unless you’re talking about James Harden and you know the player is great so you give him an extension as soon as you trade for him, typically guys who just got acquired don’t get extended. It’s easy for the team to say, ‘Listen, it’s not that we don’t think you’re great, it’s just that we don’t know you yet.’”

Eastern Conference executive: “New players typically don’t get extended because the front office and coaching staff are still learning who he is as a player and as a person. You don’t really know how the player fits yet. Sure, you’ve been evaluating the player and watched a ton of his film, but that’s different from really knowing a player. You can learn a lot throughout the course of that first season with him. Unless you can get the player at a great number, you usually don’t extend a player who’s new to the team. You just wait until restricted free agency to figure out a deal.”

Western Conference coach: “The teammates who are around a player do play a big part when it comes time for teams to make that kind of investment. They may be worried about being able to pay other core players down the road if they do this extension now. That’s what Boston is going through because they have to make a decision about Jaylen Brown now, with Jayson Tatum eligible for the same extension next summer. Or the front office may be thinking, ‘We shouldn’t give this much money to our third-best player.’ But the player’s value is relative. He may be the ‘third-best player’ on your team, but he’d be the top player on another team and they’re willing to pay him.”

Eastern Conference executive: “If a player has had some health issues, that can complicate things a bit. That’s one of those things that a lot of fans don’t understand. They’ll wonder why a team made a certain move or passed on a player. Oftentimes, we have health information that the fans and reporters don’t know about. Your team doctor might even say, ‘I just can’t recommend you do this.’ We all keep that stuff private, but it does factor into decisions.”

Western Conference executive: “When a player has had health problems, they may be more willing to sign an extension. Some players want that certainty and don’t want to risk getting hurt or having a down year because then who knows what happens? If you look at Caris LeVert, for example, he’d get more than that three-year, $52.5 million deal if he was a free agent right now or if he waited until next summer. But he’s a guy who’s had some health concerns, so that certainty was probably important to him. And, look, he’s still getting $52.5 million and he’ll never have to worry about money again for the rest of his life. It’s hard passing on that certainty, especially when it’s that first life-changing payday.”

Western Conference coach: “A lot of times, teams will give the player that big extension as long as they know they can move the contract later, if necessary. They have to consider: How easy would it be to move this deal down the road? Because if it’s a very tough deal to move, what happens if the player’s production dips or he gets hurt or his role decreases for any reason? You’re stuck with that contract on your books and that limits what you can do as a team.”


Ben Simmons with agent Rich Paul. (Bill Streicher-USA TODAY Sports)


THE AGENT’S ROLE IN EXTENSION TALKS

Eastern Conference GM: “Agents like to say if you make their client wait it out and go through restricted free agency, the player isn’t going to be happy. They’ll also say that they’ll get another team to put a trade kicker or a lot of upfront money in their offer sheet. I don’t want to say they ‘threaten’ you, but they certainly use those things as negotiating tactics to try to get the extension they want.”

Eastern Conference GM: “If the team wants to [keep the player’s cap hold small to preserve their cap space], they could come to an agreement where they say, ‘Hey, we’ll take care of you next summer and here’s why…’ That’s obviously illegal, but it certainly happens. Most of these NBA agents are reasonable people, so they’ll understand what the team is trying to do and get on board. There are some who will raise hell and say something like, ‘No, we need to do this now or you’re going to lose him!’ But most agents understand.”

Interestingly, a player can be moved immediately after inking an extension, according to several executives. This hasn’t happened in recent memory, as James Harden was traded and then subsequently extended. But it is allowed. The deal would become a poison pill, with the player’s incoming salary being the average of the total salary and years.

For instance, if the Nuggets wanted to trade Jamal Murray right now, they could. And because of the poison pill, the team that adds Murray would have to pay him the total salary ($170 million) in his contract averaged out over the length of the deal (five years), so he’d earn $34 million per year instead of having his deal start at $29 million and increasing a bit each season (like it will in Denver).

For instance, if the Nuggets wanted to trade Jamal Murray right now, they could. And because of the poison pill, the team that adds Murray would have to pay him the total salary ($170 million) in his contract averaged out over the length of the deal (five years). So he’d earn $34 million per year instead of having his deal start at $29 million and increasing a bit each season (like it will in Denver).

This is something to keep to mind as teams weigh their extension options. As one Eastern Conference executive pointed out: “Because you can trade a rookie-scale extension immediately, a player’s trade value could actually increase after getting extended since he’s locked up long-term.”

Several executives and coaches mentioned that agents typically put a certain number in the player’s head and, rather than thinking about how much they could lose, they listen to their representative.

Western Conference coach: “Jusuf Nurkic turned down an $84 million extension and signed for around $48 million. He’s still making a lot of money, but you turned down $84 million! For what? Because you thought you were going to get $90 million? And that extra $6 million was over the course of the contract, which would have been maybe an extra $2 million per year? I don’t know if these guys sit down and actually think that through. I think a lot of these guys just take their agent’s advice. It’s not until later, when they’ve signed for almost half of that original offer, that they realize they should’ve been more involved.”

Eastern Conference executive: “We always talk about guys betting on themselves and playing their way into a bigger contract, but guys can struggle and lose a lot of money too. Everyone knows about the big, $70 million extension that Nerlens Noel turned down. There were rumors that Shabazz Muhammad was offered an extension that would have paid him over $10 million per year, but he turned it down. Minnesota also did the $64 million Gorgui Dieng deal that they’ve come to regret. A lot of teams see things like that and think, ‘We should just wait until restricted free agency and we can always match an offer sheet.’ There is fear on both sides, honestly. Teams are afraid to give out a big number and have that become a bad contract, especially when there was no fear of losing the guy because he would’ve been restricted. Players are afraid that they’ll make the wrong decision because no one wants to be the next Nerlens Noel or Shabazz Muhammad. That’s why you see a lot of guys taking a discount compared to what they might get on the open market because a lot can happen in a year.”

Western Conference coach (and former player): “When I’m close to a player who is going through extension talks, I always try to ask them, ‘Two or three years ago, if you knew that you’d be in this situation, how would you react to that?’ They’ll usually say something like, ‘Oh, shoot, I would be so happy and I wouldn’t have believed you.’ Exactly! So just keep playing basketball. You got to this point because you were just playing basketball – not because you had this on the line or that on the line. When guys step back and look at the reality of their situation and how blessed they are, it really becomes minuscule. We’re talking about such first-world problems. ‘Am I going to get $50 million or $45 million?’ ‘Should I take $70 million or wait for $80 million?’ [Laughs] You want to stress over that?! You shouldn’t even be thinking about that.”

Sometimes, players will have their heart set on a certain salary because they feel like they’re better than specific players who are earning that amount. One NBA agent told HoopsHype that he had a 2017 free agent who wanted to turn down $15 million per year because he was looking at what players like Luol Deng and Timofey Mozgov made in the summer of 2016, which was an outlier since that’s when the NBA’s new television deal kicked in and teams spent recklessly. The agent tried to explain how unique the 2016 market was and urged the player to take the deal because this was by far his best offer. Several agents said that they advise their players: “Don’t count another man’s money.”

The deadline for players and teams to reach an extension is Oct. 21, 2019.



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