Accounting for Klay Thompson choosing a contract extension over new-TV-deal money

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As the age-old saying goes, $89,138,886 in the hand is better than $121,667,219 in the bush.

The Warriors and Klay Thompson are negotiating a contract extension, and the shooting guard said he’d prefer to reach a deal now rather than waiting to sign a new deal under a higher salary cap created by the new national TV contracts.

Is Thompson right to push for an extension now?

He’ll make $3,075,880 this season, the final year of his rookie contact. It’s his salaries for future seasons that are in flux.

An extension would begin in 2015-16, and if he doesn’t sign one, he’d become a restricted free agent next summer. However – unless the NBA enacts more-drastic cap smoothing – the salary cap won’t rise drastically until the 2016-17 season, the first of the new TV deals. That means Thompson, if he dares to wait for a long-term contract until the cap skyrockets, is basically committing to two more seasons – including this one – of a low salary.

Let’s start with the simple solution: Thompson signs an extension before the Oct. 31 deadline. A max extension, based on the NBA’s projected 2015-16 salary cap, would pay $89,138,886 over five years.

I don’t know whether Thompson can command the max, but the Warriors kept him rather than trading for Kevin Love. Thompson should at least ask – and considering how much more he could earn by delaying a long-term deal, they might say yes.

If Thompson doesn’t accept an extension, he could always re-sign next summer for up to the same amount a max extension would pay. If Thompson plans to do that, he might as well just push for the extension now.

But becoming a free agent next summer could bring more-lucrative opportunities.

In order to make Thompson a restricted free agent, Golden State would have to extend him a qualifying offer, a standing one-year contract offer. Thompson’s qualifying offer is slated to to be $4,210,880. But if he starts one game or plays 1,132 minutes – both of which would be, by far, career lows – he’ll meet the starter criteria and would be eligible for a larger qualifying offer of $4,433,683. Obviously, I project he’ll do that.

The Warriors play the Kings on Oct. 29, so Thompson could start that game and know he’d know he’s met the starter criteria before the extension deadline of Oct. 31. I doubt that would mean much to him, but it ever-so-slightly minimizes his risk.

As for the upside? That would come in 2016 after his year on the qualifying offer. With the cap projected to rise as the new TV deals kick in, many teams will have cap room, and salaries will soar.

Here’s the max amount Thompson could earn – using my cap projection for 2016-17 – by:

  • Signing an extension (black)
  • Signing a qualifying offer in 2015 and then signing elsewhere in 2016 (blue)
  • Signing a qualifying offer in 2015 and then re-signing in 2016 (yellow)

image

Year Extension Qualifying offer
and sign elsewhere
Qualifying offer and re-sign
2015-16 $15,502,415 $4,433,683 $4,433,683
2016-17 $16,665,096 $20,388,441 $20,388,441
2017-18 $17,827,777 $21,295,332 $21,917,574
2018-19 $18,990,458 $22,202,224 $23,446,707
2019-20 $20,153,139 $23,109,115 $24,975,840
2020-21 $26,504,973
Total $89,138,886 $91,428,795 $121,667,219

If Thompson can get a max offer in 2016, he should reject an extension and sign the qualifying offer to become a free agent then. He doesn’t even need a max deal from the Warriors – who can provide a fifth season and larger annual raises (7.5 percent vs. 4.5 percent) than other teams – to come out ahead. If Thompson leverages any teams into a max offer, he fares better than he would have on a max extension now.

Of course, nobody knows whether Thompson can get a max contract in 2016.

Only Thompson can decide for himself which course is best. An extension is the only way to secure huge money now, but waiting could bring a bigger payout.

This probably won’t affect his decision, but the higher Thompson’s salary in the final year of his deal, the higher his max salary could be in his following contract. That’s because free agents can always sign for 105 percent of their previous salary. So, holding off on a long-term deal could mean Thompson is eligible for even more money on his second long-term deal.

Is Thompson a star worthy of a max contract, let alone a megastar worthy of two in his career?

It’s rare a player turns down his first big guaranteed payday in order to chase a bigger deal later, but a national TV deal of this size is unprecedented. The game has changed, and as a result, even a max contract extension is no longer guaranteed to be the optimal financial path.

I understand Thompson’s inclination to take the money now, but if he does that, he should make sure the Warriors give him all of it. Max extension or bust.

Michael Jordan, Denny Hamlin form NASCAR racing team with Bubba Wallace driving

Michael Jordan NASCAR
Brian Lawdermilk - Pool/Getty Images for NASCAR
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Michael Jordan is getting into the NASCAR game.

The North Carolina native has teamed up with three-time Daytona 500 winner Denny Hamlin to form a new NASCAR Cup Series race team — and they’ve signed Bubba Wallace to drive.

Wallace is the only Black man driving full-time in NASCAR’s top series (the previous three seasons he raced for Richard Petty Motorsports). Wallace has been at the forefront of bringing social changes to NASCARincluding the banning of the Confederate flags at NASCAR events and tracks.

“Growing up in North Carolina, my parents would take my brothers, sisters and me to races, and I’ve been a NASCAR fan my whole life,” Jordan said in a statement. “The opportunity to own my own racing team in partnership with my friend, Denny Hamlin, and to have Bubba Wallace driving for us, is very exciting for me.

“Historically, NASCAR has struggled with diversity and there have been few Black owners. The timing seemed perfect as NASCAR is evolving and embracing social change more and more. In addition to the recent commitment and donations I have made to combat systemic racism, I see this as a chance to educate a new audience and open more opportunities for Black people in racing.”

Michael Jordan becomes the first Black owner of a full-time race team in NASCAR top series since NASCAR Hall of Famer Wendell Scott in the 1960s and early 1970s (he owned the team and drove the car). Bubba Wallace is the first Black full-time driver in the top NASCAR series since Scott.

Hamlin will be a minority partner in the new team and continue to drive for Joe Gibbs Racing.

“This is a unique, once-in-a-lifetime opportunity that I believe is a great fit for me at this point in my career,” said Wallace in a statement. “Both Michael and Denny are great competitors and are focused on building the best team they possibly can to go out and compete for race wins. I’m grateful and humbled that Michael and Denny believe in me and I’m super pumped to begin this adventure with them.”

The car manufacturer, number, sponsors and more will be announced at a later date.

Jordan is the primary owner of the NBA’s Charlotte Hornets.

NBA executives pick Luka Doncic as best player under 25 to build around

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Luka Doncic, in his second season, made the leap into the NBA’s elite — fourth in MVP voting and First Team All-NBA. All at age 21.

Not surprisingly, he’s the player under 21 NBA teams would want to build around.

Michael Scotto of Hoopshype polled 15 league executives (including four general managers) and players under 25 they want to build around and Doncic was the unanimous choice.

“To me, Luka is the clear No. 1,” one scout told HoopsHype. “He’s a guy who can be a lead ballhandler. He’s good enough to score and create at a high level, has the right mental makeup and is incredibly smart. He’s been a winner everywhere and will probably be a winner in the league.”

It’s hard to argue when Luka Doncic is already doing this in the playoffs:

Boston’s Jayson Tatum came in second, Phoenix Devin Booker was third, followed by Ja Morant (Memphis) fourth and a tie at fifth between Donovan Mitchell (Utah) and Bam Adebayo (Miami).

An interesting note about that top five: None of them was a No. 1 pick.

Zion Williamson had been on top of this poll a year ago, but after a season where he played just 19 games then looked a step slow in the bubble there are concerns about his long-term health.

“He’s just a special player inside the arc who’s an elite finisher,” one executive told HoopsHype. “Offensively, he can finish at an elite rate. He’s one of the best finishers behind Giannis (Antetokounmpo) and LeBron (James). He can hit the open man. He’s so physically dominant. His shooting shouldn’t be a problem, but we’ll see. I think he’s always going to be hurt, though.”

One healthy dominant season from Williamson and those opinions could shift, but even then Doncic will be an MVP level player the Mavericks can build a contender around. He’s the guy under 25.

Report: Raptors coach Nick Nurse earning $8M salary on extension

Raptors coach Nick Nurse
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Spurs president-coach Gregg Popovich reportedly had an $11 million salary in 2015 then signed a contract extension in 2019 that keeps him the NBA’s highest-paid coach. Doc Rivers was earning $10 million annually with the Clippers before his latest extension. Warriors coach Steve Kerr, Mavericks coach Rick Carlisle and Heat coach Erik Spoelstra also signed extensions in recent years.

What about Nick Nurse, who just signed an extension with the Raptors?

Shams Charania of The Athletic:

Raptors coach Nick Nurse signed a new multiyear contract extension on Tuesday — a deal that pays him around $8 million per year, sources say.

That’s a lot for a coach, especially in these times.

But Nurse has proven his value. He might even be the NBA’s best coach right now. He checks so many key boxes.

He has shown the ability to prepare his team for the playoffs then adapt through a long playoff run. His players have developed under his watch. He has dealt with roster upheaval and kept everything humming.

After just two seasons as head coach, Nurse still must prove himself in more situations, especially as opposing teams become more familiar with his strategies. But Toronto should want to keep him.

Credit Raptors ownership for paying to make it happen.

Now onto Raptors president Masai Ujiri

Dwight Howard is talking a lot of trash

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The Lakers put Dwight Howard on final warning BEFORE even signing him.

And for most of the season, Howard kept a low profile.

But he has been breaking out of his shell in the bubble. Related to basketball, too.

Howard has played excellent defense on Nuggets star Nikola Jokic in the Western Conference finals. The day after Game 1, Howard told Jamal Murray about it.

Sam Amick of The Athletic:

The Nuggets were wrapping up their practice, which took place not far from the Lakers’, with Murray about to begin his media session in the convention center hallway. Howard, as it so happened, walked by right then and the banter restarted.

“Don’t do that, fam,” Murray said to Howard, with both men smiling.

“What?” Howard said.

“Don’t do that, fam,” Murray said again.

“Where’s Joker at?” Howard replied. “Where’s his room?”

As was the case in the series opener, there was no answer.

Then, Howard (and JaVale McGee) pointed out Jokic’s defensive deficiencies against Anthony Davis in Game 2.

Chris Haynes of Yahoo Sports:

Once the Lakers’ bench saw it was Jokic tasked with guarding Davis, it brought the noise with JaVale McGee and Dwight Howard screaming, “Thanksgiving, steak dinner, appetizers, filet mignon and potatoes, a glass of champagne!”

Davis, who faced up Jokic and maneuvered his way around the big man for a bucket in the paint. McGee shouted, “Told you it was a feast out there!”

Howard didn’t let up after Davis’ game-winner.

Amick:

As the Lakers mobbed Davis on the court after his shot, big man Dwight Howard broke off from the group and decided to taunt the Nuggets as they exited the basketball stage. If you somehow haven’t noticed, Howard is leaning hard into this tough-guy approach.

“Go home!” he yelled over and over while laughing, jumping, pumping his fist and getting closer to the Nuggets’ side of the floor with every second. “Go home!”

A small group of Nuggets staffers, including one of Jokic’s biggest supporters in assistant strength and conditioning coach Felipe Eichenberger, did not take kindly to the mocking that had taken place all game long and returned to the court to shout back. The two sides exchanged words, and eventually retreated to their corners that came with conflicting emotions.

This works because Howard is playing well – in his role.

Howard was slow to recognize he’s no longer a superstar. Yet, he still has the energy for being the center of attention. That used to mean doing things like posting up too much,

Now, Howard is focused on defending, screening and sometimes finishing at the rim while playing all-out in limited minutes. It’s what the Lakers need and what Howard can provide at age 34.

If he wants to talk trash along the way, more power to him. It’s a lot of fun.

But there’s also a fine line between the endearing villain and loathed jerk. Outside Denver, Howard appears to be the former. For now.