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Why second-round NBA draft picks might get paid more than first-rounders this year

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Jordan Mickey had high hopes for the 2015 NBA draft, but his agent warned him: If you fall outside the top half or so of the first round, you’re better off going in the second round. Teams picking high in the second round offer a better fit and more flexibility.

Mickey heard the message.

He just didn’t care.

“The recognition, guys want to say they were a first-round pick,” Mickey said. “That’s something I wanted.”

“I just felt that, the way I play, I deserve it.”

Mickey slipped out of the first round to the Celtics at No. 37. Like many players, he still carries a grudge for the teams that passed on him.

“It’ll probably be with me until I’m done playing the game,” Mickey said.

What separates Mickey from other second-rounders: He received one of the biggest perks usually afforded only to first-rounders  – a higher salary – despite going in the second round.

It’s the product a salary cap increasing higher than ever imagined when this Collective Bargaining Agreement was signed, and this summer’s projected $94 million cap will intensify the effect. Expect several 2016 second-round picks to make more than some of their first-round counterparts next season.

The system

First-round picks are bound by a salary scale negotiated by the league and union into the 2011 CBA. The scale is a set amount for each pick, increasing slightly each year. Teams can pay a player between 80% and 120% of his scale amount, and 120% is so common, it’s practically the set number.

Second-round picks are free to negotiate any contract. Teams must use cap space or an exception – e.g., mid-level or minimum-salary – to sign them.

So, with the salary cap skyrocketing, the proportions for first-round picks have become out of whack. In 2011, the first year of the CBA, the No. 1 pick earned 8.86% of the salary cap ($58,044,000). If the salary cap comes in as projected this year ($94 million), the No. 1 pick will earn 6.28% of the salary cap. That same effect is felt throughout the first round.

Meanwhile, second-round picks are free to partake in the newly available TV money.

There’s an unsaid – sometimes, said – tension behind every contract negotiation between teams and second-round picks. To retain a second-rounder’s rights, a team must extend him a required tender. A required tender is a one-year contract offer, and because that’s the only requirement, it’s always for the minimum and fully unguaranteed.

Teams want to sign players to longer contracts with little to no guaranteed money. That way, if the player pans out, he’s cheap and can’t go anywhere. If he doesn’t pan out, he can be waived for minimal cost.

Second-rounders have varying interests. Some want a long-term deal with more money guaranteed or scheduled if not released. Others want to hit free agency sooner, so they can bargain with all 30 teams rather than just the one that drafted him. For most, both desires apply. Receive enough over a long-term contract, and free agency becomes far less important. Face a cheap long-term deal, and the player can always threaten to sign the required tender.

K.J. McDaniels, the No. 32 in the 2014 draft, famously accepted the required tender rather than sign long-term with the 76ers. He then signed a three-year, $6,523,127 deal with the Rockets last summer. Despite getting just the minimum his first year, McDaniels has already made more than half of the players selected in the first round ahead of him. Next season, he’ll pass a few more in earnings. Plus, he’ll either become a free agent a second time before 2014 first-rounders do so once (if Houston declines his 2017-18 team option to make him restricted) or an unrestricted free agent before scaled 2014 first-rounders (if Houston exercises his team option).

McDaniels’ plan carried risk. If he got cut in his first training camp, he could’ve walked away with nothing.

Still, there’s already a school of thought that players are better off going early in the second round rather than late in the first, that the freedom to negotiate a shorter contract trumps the lower initial salary.

Now, second-round picks can probably have their cake and eat it too – a higher initial salary and more freedom.

Precedent runs deeper than Mickey

Mickey became the first second-round pick under this CBA to sign the year he was drafted and earn more his first year than a first-round pick.

Players that were stashed overseas had done it, but their stock changed from the time of the draft – either because they developed or were ready to jump to the NBA. We’re looking at only players to sign the year they were drafted.

Mickey actually made more than four first-round picks last season: No. 27 pick Larry Nance Jr., No. 28 pickR.J. Hunter (Mickey’s own Celtics teammate), No. 29 pickChris McCullough and No. 30 pickKevon Looney.

Put another way, Mickey received 1.67% of the 2015-16 cap. The No. 20 pick Thursday will receive 1.66% of the projected 2016-17 cap.

Based on that precedent, more than third of the first round could make less next season than a second rounder.

There are deeper ways to evaluate a second-rounder’s contract than first-year salary as a percentage of the salary cap. Future salaries, length, guarantees, options and incentives all matter. But for a quick reference, we’ll go by first-year salary as a percentage of the salary cap.

Several second-round picks under this CBA – Mickey, Richaun Holmes, Chandler Parsons, Draymond Green, Joseph Young, Montrezl Harrell, Allen Crabbe, Jerami Grant, Joe Harris, Roy Devyn Marble, Kyle O'Quinn Tyler Honeycutt and Damien Inglis – have signed the year they were drafted and received a first-year salary relatively higher than what at least one first-rounder projects to make this year.

Here’s everyone on the same scale, the highest paid second-rounders colored by year with 2016 first-round picks interspersed in black:

    • 2015: green
    • 2014: blue
    • 2013: silver
    • 2012: yellow
    • 2011: red

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Previous contracts inform future contracts. If numerous second-rounders previously received starting salaries greater than 1.20% of the cap, agents will demand similar amounts this year. Those amounts will just happen to be worth more than first-rounders can receive.

A couple related factors beyond simply a higher cap conspire to boost second-round salary even further this year:

1. Nearly every team will have cap space. Because teams don’t receive an exception for second-round picks, many teams just didn’t have the ability to pay a second-rounder more even if they wanted to. That will rarely be an excuse now.

2. Many players are locked into contracts signed before the new TV money kicked in. That leaves more money for everyone else.

Well, almost everyone else. The rookie scale prevents first-rounders from enjoying the windfall.

Meanwhile, second-rounders will cash in.

The No. 30 pick will make $1,171,560 next season if he signs in the NBA. How many second-round picks can say “Give me $1.2 million (or more), or I’ll sign the required tender” and have the team acquiesce? I’m betting on several. Plenty of teams will have that much money lying around without a place to spend it, maybe even needing to spend it to reach the floor. Securing their own second-rounders seem as good a use as any.

It’s too late to change the system for this year, but either side can opt out of the CBA after next season by giving notice by Dec. 15, 2016. The rookie scale should be revisited in the next agreement.

A simple solution: Tying the rookie scale, like the cap itself, to revenue rather than ascribing a prefixed amount. Owners avoid the hassle of draft confusion, and players get more money to the players that deserve it.

“There’s no question that the contracts, the salary scale for first first-round picks is outdated,” said agent Mark Bartelstein, who represented two first-round picks who made less than Mickey last year (Larry Nance Jr. and R.J. Hunter).

But what about in the meantime?

Prepare for second-round saga in ’16

The 2016 draft is already hectic with several players having wide draft ranges. The second-round issue only adds uncertainty.

Will agents try to steer their players from the first round to the second round?

“If you’re projected to be a low first-rounder, it would be absolute lunacy not to work out with teams in that range, because you can easily fall,” said agent Keith Kreiter, who represented Richaun Holmes, the second-highest-paid second-rounder last year. “If you don’t work out for teams in the lower first and they pass on you, and some teams in the 30s end up passing on you – there’s no guarantee they’ll take you – then you’re in the 40s and 50s and you could be running the risk of straight minimums with very little guaranteed.”

Though there’s more money to be made in the high second round, there might be big downside to falling further. For players on their first NBA contracts, playing it safe makes some sense.

“A first-round deal isn’t so terrible in this world,” Kreiter said.

But there’s still wiggle room to work the system.

“One of the things I could see happening is you have a wonderful workout for a team in the 30s, high 30s, a team says, ‘Would you be willing to shut it down, and we’ll take you?'” Kreiter said. “There are some people that would maybe take that risk, although it’s a huge risk.”

Until Thursday, the question is which players this affects. Then, with everyone selected, it’ll turn into the magnitude of the effect.

How many second-rounders get more favorable contracts than first-rounders? How much more favorable? Will second-round negotiations become more contentious with more at stake?

It could become chaos, and Mickey is the trendsetter.

“It’s always a great thing to be the first at something,” Mickey said. “Hopefully, other players can do it.”

I suspect plenty will.

Cavaliers reportedly snap up Alfonzo McKinnie off waivers

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Going into training camp, Alfonzo McKinnie was expected to be the starting small forward for the Warriors this season.

However, injuries along the front line — Willie Cauley-Stein is out for weeks still, plus Kevon Looney and rookie Alen Smailagic are banged up — and some strong play from Marquise Chriss meant he was going to make the Warriors roster. With the team being hard capped after signing D'Angelo Russell this summer, the Warriors had no choice but to cut McKinnie.

The Cleveland Cavaliers have snapped him up off waivers.

This is a good move by the Cavaliers, a low-risk pickup — McKinnie is on a minimum contract — that could get them a 3&D wing on a young team. He played in 72 games for the Warriors last regular season plus got playoff minutes, and shot 35.6 percent from three. He’s long and athletic and a player both the Raptors and Warriors liked but had to move on from because of other roster situations.

For the Warriors, they will have Glenn Robinson III starting at the three with Alec Burks behind him. They could have really used McKennie.

Report: Nets signing Taurean Prince to two-year, $29M extension

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The Nets traded two first-round picks to the Hawks to clear double-max(-ish) cap space for Kevin Durant and Kyrie Irving.

And get Taurean Prince.

Prince was an afterthought in his trade to Brooklyn, which signaled the Nets’ big summer. But Brooklyn acquired him for a reason and will pay to secure him longer.

Adrian Wojnarowski of ESPN:

Considering this information came from his agent, this is almost certainly the most favorable framing of terms. Maybe Prince got all $29 million guaranteed. But if there are any incentives, I bet that $29 million counts them as achieved.

The Nets are trying to build a championship contender. This deal gives them multiple avenues for uisng Prince.

His contract could help for salary-matching in a bigger trade. I can’t recall the rookie-scale extension so short, if there ever was one. Two years are not an especially long commitment. That hints at using this deal as a trade chip. So does Brooklyn extending Prince before he played a regular-season game there.

Of course, Prince has a track record from Atlanta. He’s a good outside shooter with the frame to defend well when engaged. Maybe the Nets really believe in his long-term potential. He fell out of favor with the Hawks only after they changed general managers.

The Nets needn’t decide on Prince’s long-term future now. They have paid for team control for the next three seasons (including this season, the final year of his rookie-scale contract). They can monitor how he plays – and what trades become available.

Pacers, Domantas Sabonis agree to four-year, $77 million extension

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Indiana is going all-in on the idea of Domantas Sabonis playing the four next to Myles Turner at the five this season. The Pacers have put up the money, now we’re going to see if it can actually work.

After initial struggles to find common ground on a contract extension — leading to reports of the Pacers testing the trade waters for Sabonis — the two sides have come to terms on a four-year contract extension, a story broken by Adrian Wojnarowski of ESPN and since confirmed by the Pacers.

The exact figures here are still in flux.

How likely those bonuses are remains to be seen.

This is a pretty fair contract number, a little more than $19 million a year average for the man who came in second in the Sixth Man of the Year voting last season seems about right. Plus, if it doesn’t work out with Sabonis starting next to Turner, this is a very tradable contract and there would be interest in his services (he was harder to trade at his $3.5 million current salary and get anything of value to match that smaller number).

The Pacers hope it doesn’t come to that and Sabonis becomes part of one of the better, younger frontcourts in the league.

Sabonis is skilled and versatile on offense, a fantastic pick-and-roll or dribble hand-off guy who sets good screens then he rolls into open space. He’s strong around the basket and plays a crafty, high IQ game.

The concerns with Sabonis, and why some teams are not convinced he’s a starter, are twofold. First, he is not good defensively and is not a rim protector.

The second concern is that he does not space the floor (76.4 percent of his shots came within 10 feet of the basket last season, and he doesn’t make many beyond that range).

Indiana is betting on this core. They have inked big contracts with Turner (four-years, $72 million) and Malcolm Brogdon (four years, $85 million). Victor Oladipo will be coming up for an extension in a couple of years and, if he returns to pre-injury form, is a lock max player. Throw in this Sabonis contract and that is a lot of guaranteed money. Are these guys worth it?

We’ll find out soon enough, the Pacers have gone all-in with them

Report: Spurs signing Dejounte Murray to four-year, $64M extension

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In 2018, a 21-year-old Dejounte Murray became the youngest player ever to make an All-Defensive team. The following fall, he showed progress on his outside shooting and distributing. Everything was coming together for the young Spurs point guard.

Then, disaster struck.

Just before last season, Murray tore his ACL. He missed the entire year.

Yet, he’ll still get a contract extension in San Antonio.

Shams Charania of The Athletic:

Given his injury, it’d be difficult for Murray to reject this deal. It’s life-changing money. What if he lost significant athleticism or fails to hit his stride next season? That’d be a grim way to enter restricted free agency next summer.

But what if Murray picks up where he left off? This could be a major steal for the Spurs.

Given the wide range of potential outcomes, this extension seems fair. However, there’s also a reasonable chance Murray significantly underperforms or overperforms this deal. (That’s why it’s fair.)

Murray is a stout defender and elite rebounder for a guard. He can push the pace and slash to the rim. But it’s tough for lead guards who don’t shoot well from the perimeter. Murray’s playmaking for others must also improve, especially if San Antonio eventually transitions from an isolation-heavy offense around DeMar DeRozan and LaMarcus Aldridge.

Murray is just 23. It’s OK he’s not a finished product. The Spurs should know better than anyone how to feel about his progress since the injury. They probably deserve benefit of the doubt in evaluating his value.

Still, long-term fit questions linger with Derrick White. White stepped up in Murray’s absence last season, especially in the playoffs. But White is another subpar 3-point-shooting guard. Can they play together? White will be eligible for his own rookie-scale extension next offseason.

San Antonio is mainly focused on the present, and Murray and White will factor prominently this season. They’re still just supporting players for now, though.

Long term, Murray’s extension is a key step toward whatever comes next for the Spurs.